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ABHYUDAYA CO -OPERATIVE BANK : BOARD SUPERSEEDED
No restrictions on the business
Dated 25. 11. 2023 : Reserve Bank of India ( RBI ) superseeded the board of directors of the multistate co-operative bank M/S Abhyudaya co -operative Bank Limited headquartered in Mumbai .
The Bank was conferred with Scheduled Bank Status by Reserve Bank of India in September 1988. Over a span of 51 years, it had become one of the leading Urban Co-op. Bank in the country with branches in Metropolitan Mumbai, Navi Mumbai, Pune, Thane, Raigad, Nagpur, Nashik, Nanded, Kankavali, Aurangabad, Ahmednagar & Pen in Maharashtra State, Vadodara and Ahmedabad in Gujarat State, Udupi and Mangalore in Karnataka State. On 11th January, 2007 the Bank was registered as a MultiState Co-op. Bank by the Central Registrar, New Delhi. The area of operation of the bank is confined to 3 States - Maharashtra, Gujarat and Karnataka.
As per the website of the bank , " As on 31st March 2020, the bank has more than 2.23 lakh members and more than 17.30 lakh Depositors. As on 31st March 2020, total business mix of the bank has reached over Rs. 17,492 Crore. As on 31st March 2020, Bank’s Deposits have reached upto Rs. 10,838 Crore while Advances have reached upto Rs. 6,654 Crore. The Bank has maintained a ratio of CASA Deposits to Total Deposits as high as 37.55%. The strength of the Bank is reflected in the fact that it’s Paid up Capital and Reserves & provisions have amounted to Rs. 1380 Crore and Investments are to the tune of Rs. 3,508 Crore. The Capital Adequacy Ratio maintained by our bank is as high as 12.60%. "
After superseeding the board , the Reserve Bank has appointed Shri Satya Prakash Pathak, former Chief General Manager of State Bank of India as “Administrator” to manage the affairs of the bank during this period. The Reserve Bank has also appointed a “Committee of Advisors” to assist the Administrator to discharge his duties. The members of the “Committee of Advisors” are Shri Venkatesh Hegde (former General Manager, SBI); Shri Mahendra Chhajed (Chartered Accountant); and Shri Suhas Gokhale (former MD, COSMOS Co-operative Bank Limited).
RBI has taken above action as it found certain material concerns emanating from poor governance standards observed in the bank. No business restrictions have been placed by RBI and the bank shall continue to carry on its normal banking activities as is hitherto, under the guidance of the Administrator.
To read RBI Press release on the matter , CLICK HERE
No restrictions on the business
Dated 25. 11. 2023 : Reserve Bank of India ( RBI ) superseeded the board of directors of the multistate co-operative bank M/S Abhyudaya co -operative Bank Limited headquartered in Mumbai .
The Bank was conferred with Scheduled Bank Status by Reserve Bank of India in September 1988. Over a span of 51 years, it had become one of the leading Urban Co-op. Bank in the country with branches in Metropolitan Mumbai, Navi Mumbai, Pune, Thane, Raigad, Nagpur, Nashik, Nanded, Kankavali, Aurangabad, Ahmednagar & Pen in Maharashtra State, Vadodara and Ahmedabad in Gujarat State, Udupi and Mangalore in Karnataka State. On 11th January, 2007 the Bank was registered as a MultiState Co-op. Bank by the Central Registrar, New Delhi. The area of operation of the bank is confined to 3 States - Maharashtra, Gujarat and Karnataka.
As per the website of the bank , " As on 31st March 2020, the bank has more than 2.23 lakh members and more than 17.30 lakh Depositors. As on 31st March 2020, total business mix of the bank has reached over Rs. 17,492 Crore. As on 31st March 2020, Bank’s Deposits have reached upto Rs. 10,838 Crore while Advances have reached upto Rs. 6,654 Crore. The Bank has maintained a ratio of CASA Deposits to Total Deposits as high as 37.55%. The strength of the Bank is reflected in the fact that it’s Paid up Capital and Reserves & provisions have amounted to Rs. 1380 Crore and Investments are to the tune of Rs. 3,508 Crore. The Capital Adequacy Ratio maintained by our bank is as high as 12.60%. "
After superseeding the board , the Reserve Bank has appointed Shri Satya Prakash Pathak, former Chief General Manager of State Bank of India as “Administrator” to manage the affairs of the bank during this period. The Reserve Bank has also appointed a “Committee of Advisors” to assist the Administrator to discharge his duties. The members of the “Committee of Advisors” are Shri Venkatesh Hegde (former General Manager, SBI); Shri Mahendra Chhajed (Chartered Accountant); and Shri Suhas Gokhale (former MD, COSMOS Co-operative Bank Limited).
RBI has taken above action as it found certain material concerns emanating from poor governance standards observed in the bank. No business restrictions have been placed by RBI and the bank shall continue to carry on its normal banking activities as is hitherto, under the guidance of the Administrator.
To read RBI Press release on the matter , CLICK HERE
NON-CALLABLE DEPOSIT - MINIMUM DEPOSIT AMOUNT RAISED
Dated 27.10.2023 : So far banks could take non-callable deposits from the public on a deposit amount of Rs 15 lakhs or more . Non-callable deposits fetch higher rate of interest while premature closure is not allowed .
Now , as per notification issued by Reserve Bank of India ( RBI ) . banks will not be able to receive such deposits for an amount less than Rupees one crore . The minimum amount for offering non-callable TDs is increased from Rupees fifteen lakh to Rupees one crore i.e., all domestic term deposits accepted from individuals for amount of Rupees one crore and below shall have premature-withdrawal-facility . The instruction is also applicable for Non-Resident (External) Rupee (NRE) Deposit / Ordinary Non-Resident (NRO) Deposits. .
To read RBI NOTIFICATION DATED 26.10.2023 , CLICK HERE
Dated 27.10.2023 : So far banks could take non-callable deposits from the public on a deposit amount of Rs 15 lakhs or more . Non-callable deposits fetch higher rate of interest while premature closure is not allowed .
Now , as per notification issued by Reserve Bank of India ( RBI ) . banks will not be able to receive such deposits for an amount less than Rupees one crore . The minimum amount for offering non-callable TDs is increased from Rupees fifteen lakh to Rupees one crore i.e., all domestic term deposits accepted from individuals for amount of Rupees one crore and below shall have premature-withdrawal-facility . The instruction is also applicable for Non-Resident (External) Rupee (NRE) Deposit / Ordinary Non-Resident (NRO) Deposits. .
To read RBI NOTIFICATION DATED 26.10.2023 , CLICK HERE
RBI PUTS RESTRICTION ON BENGALURU BASED CO-OP BANK
Dated 26.07.2023 : Reserve Bank of India ( RBI ) has put restrictions on operations of Bangalore based The National Co-operative Bank under section 35A of Banking Regulations Act .
As per Press release dated 24.07.2023 , customers of the bank will not be able to draw more than Rs 50,000 from their all accounts including savings Bank , Current A/C or any other deposit account . Further the Bank will not be not be able to grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits,. It will also not permitted to disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI directions dated July 24, 2023. The restrictions will remain operative for next six months .
The bank's deposits are covered with DICGC guarantee for Rs 5.00 lakhs per customer . The bank has 13 branches out which 12 are in Bengaluru and one in Mysuru
Dated 26.07.2023 : Reserve Bank of India ( RBI ) has put restrictions on operations of Bangalore based The National Co-operative Bank under section 35A of Banking Regulations Act .
As per Press release dated 24.07.2023 , customers of the bank will not be able to draw more than Rs 50,000 from their all accounts including savings Bank , Current A/C or any other deposit account . Further the Bank will not be not be able to grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits,. It will also not permitted to disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI directions dated July 24, 2023. The restrictions will remain operative for next six months .
The bank's deposits are covered with DICGC guarantee for Rs 5.00 lakhs per customer . The bank has 13 branches out which 12 are in Bengaluru and one in Mysuru
MAKE NOMINATIONS FOR BANK DEPOSITS MANDATORY : RBI COMMITTEE
Dated 06.06.2023 : The Reserve Bank of India had set up the Committee for Review of Customer Service Standards in RBI Regulated Entities (REs) on May 23, 2022 under the Chairmanship of Shri B.P. Kanungo, former Deputy Governor, RBI.
Now the committee has submitted its report and has given exhaustive recommendations on various aspects of customer service in banks and and other regulated entities ( RE ) . With regard to hassles faced by the legal heirs of the deceased depositors , , the committee has recommended that the Obtaining nomination in deposit accounts may be made mandatory to facilitate hassle-free settlement of claims in case of death of the account holder. Several existing accounts do not have nominations at present. The REs should be asked to obtain nominations in all such cases within a reasonable time period, say three years . To obviate the need for visits to the branches / RE premises, by the nominee / heirs, the process for settling deceased claims may also be made available on-line. The on-line facility may provide for submission of all the required documents and their verification.
Indian Banks’ Association (IBA) may update its Model Operating Procedure (MOP), in line with regulation, for hassle-free settlement of claims in accounts of the deceased account holders, in various scenarios. The MOP may provide for the documents required to be submitted by the claimant. In case nomination exists, the proceeds may be released immediately, upon submission of the required documents.
The other recommendations with regard to the services to be rendered to the customers include
1. The RE should maintain a centralised database of KYC documents of all customers, linked to a unique customer identifier, say the Customer Information File (CIF), obviating the need for submitting KYC documents repeatedly for availing multiple facilities from the same RE. Whenever KYC documents are updated by the customer, the same should be reflected for all other facilities availed by the customer from the RE.
2. REs should mandatorily send monthly statement of account/s to the registered email ID of the customer. They may continue to provide physical copies when desired by the account holder.
3. The REs may adopt a nuanced approach for risk categorisation of the customers. For example, salary earners with inflows and outflows consistent with the customer’s profile need not necessarily be categorised as high risk, even though they may be “high net worth” individuals. Similarly, students can also be categorized as low - risk.
4. The Reserve Bank may consider stipulating a time limit for the REs to return the property documents to the borrower from the date of closure of the loan account, failing which a penalty / compensation linked to the extent of delay should automatically be paid by the RE to the borrower .
5. The Reserve Bank may examine whether Deposit Insurance and Credit Guarantee Corporation (DICGC) cover can be extended to bank PPIs and later to non-bank PPIs based on experience gained.
6. Common portal for lodging complaints may be set up by the Reserve Bank so that the customers of any RE can lodge complaints on a single platform
One can go through the report submitted by the committee by clicking here . They can also send their comments to RBI by email [email protected] <[email protected]>; before 7th , July 2023 before RBI takes its final decision on the recommendations .
Dated 06.06.2023 : The Reserve Bank of India had set up the Committee for Review of Customer Service Standards in RBI Regulated Entities (REs) on May 23, 2022 under the Chairmanship of Shri B.P. Kanungo, former Deputy Governor, RBI.
Now the committee has submitted its report and has given exhaustive recommendations on various aspects of customer service in banks and and other regulated entities ( RE ) . With regard to hassles faced by the legal heirs of the deceased depositors , , the committee has recommended that the Obtaining nomination in deposit accounts may be made mandatory to facilitate hassle-free settlement of claims in case of death of the account holder. Several existing accounts do not have nominations at present. The REs should be asked to obtain nominations in all such cases within a reasonable time period, say three years . To obviate the need for visits to the branches / RE premises, by the nominee / heirs, the process for settling deceased claims may also be made available on-line. The on-line facility may provide for submission of all the required documents and their verification.
Indian Banks’ Association (IBA) may update its Model Operating Procedure (MOP), in line with regulation, for hassle-free settlement of claims in accounts of the deceased account holders, in various scenarios. The MOP may provide for the documents required to be submitted by the claimant. In case nomination exists, the proceeds may be released immediately, upon submission of the required documents.
The other recommendations with regard to the services to be rendered to the customers include
1. The RE should maintain a centralised database of KYC documents of all customers, linked to a unique customer identifier, say the Customer Information File (CIF), obviating the need for submitting KYC documents repeatedly for availing multiple facilities from the same RE. Whenever KYC documents are updated by the customer, the same should be reflected for all other facilities availed by the customer from the RE.
2. REs should mandatorily send monthly statement of account/s to the registered email ID of the customer. They may continue to provide physical copies when desired by the account holder.
3. The REs may adopt a nuanced approach for risk categorisation of the customers. For example, salary earners with inflows and outflows consistent with the customer’s profile need not necessarily be categorised as high risk, even though they may be “high net worth” individuals. Similarly, students can also be categorized as low - risk.
4. The Reserve Bank may consider stipulating a time limit for the REs to return the property documents to the borrower from the date of closure of the loan account, failing which a penalty / compensation linked to the extent of delay should automatically be paid by the RE to the borrower .
5. The Reserve Bank may examine whether Deposit Insurance and Credit Guarantee Corporation (DICGC) cover can be extended to bank PPIs and later to non-bank PPIs based on experience gained.
6. Common portal for lodging complaints may be set up by the Reserve Bank so that the customers of any RE can lodge complaints on a single platform
One can go through the report submitted by the committee by clicking here . They can also send their comments to RBI by email [email protected] <[email protected]>; before 7th , July 2023 before RBI takes its final decision on the recommendations .
IOB LAUNCHES REVAMPED WEBSITE :
Dated 17.05.2023 : Public sector Lender Indian Overseas Bank has recently launched its new revamped website .
It has got new features like Internet banking log in option in the top of the home page, ready access to all customer care requirements, Apply for loans options, open SB account option , EMI calculator option, key words for instant search and many other important features in the home page itself.
It's expected that the new website will be useful for easy navigation to both the existing customers and would be customers
Dated 17.05.2023 : Public sector Lender Indian Overseas Bank has recently launched its new revamped website .
It has got new features like Internet banking log in option in the top of the home page, ready access to all customer care requirements, Apply for loans options, open SB account option , EMI calculator option, key words for instant search and many other important features in the home page itself.
It's expected that the new website will be useful for easy navigation to both the existing customers and would be customers
CAMPAIGN TO RETURN UNCLAIMED BALANCES TO THE DEPOSITORS
1OO DAYS 100 PAYS
Dated 14.05.2023 : Balances in savings / current accounts which are not operated for 10 years, or term deposits not claimed within 10 years from date of maturity are classified as “Unclaimed Deposits”. These amounts are transferred by banks to “Depositor Education and Awareness” (DEA) Fund maintained by the Reserve Bank of India. The Reserve Bank, from time to time, through its public awareness initiatives, has been encouraging members of public to identify and approach the bank concerned for claiming such deposits. Recently, the Reserve Bank has also announced the setting up of a Centralised Web portal for public to search unclaimed deposits across multiple banks.
It is reported that the total amount of unclaimed deposits transferred to RBI by Public Sector Banks (PSBs) in respect of deposits which have not been operated for 10 years or more, was Rs 35,012 crore up to the month of February 2023 .
The Reserve Bank of India has now announced a ‘100 Days 100 Pays’ campaign for banks to trace and settle the top 100 unclaimed deposits of every bank in every district of the country within 100 days. This measure will complement the ongoing efforts and initiatives by the Reserve Bank to reduce the quantum of unclaimed deposits in the banking system and return such deposits to their rightful owners/ claimants.
On the second aspect, RBI has asked the banks to display the list of unclaimed deposits on their website. In order to improve and widen the access of depositors / beneficiaries to such data, RBI has decided to develop a web portal to enable search across multiple banks for possible unclaimed deposits based on user inputs. The search results will be enhanced by use of certain AI tools.
The banks are expected to commence the campaign for returning the deposits from June 01, 2023.
Source : RBI PRESS RELEASE DATED 12.05.2023
1OO DAYS 100 PAYS
Dated 14.05.2023 : Balances in savings / current accounts which are not operated for 10 years, or term deposits not claimed within 10 years from date of maturity are classified as “Unclaimed Deposits”. These amounts are transferred by banks to “Depositor Education and Awareness” (DEA) Fund maintained by the Reserve Bank of India. The Reserve Bank, from time to time, through its public awareness initiatives, has been encouraging members of public to identify and approach the bank concerned for claiming such deposits. Recently, the Reserve Bank has also announced the setting up of a Centralised Web portal for public to search unclaimed deposits across multiple banks.
It is reported that the total amount of unclaimed deposits transferred to RBI by Public Sector Banks (PSBs) in respect of deposits which have not been operated for 10 years or more, was Rs 35,012 crore up to the month of February 2023 .
The Reserve Bank of India has now announced a ‘100 Days 100 Pays’ campaign for banks to trace and settle the top 100 unclaimed deposits of every bank in every district of the country within 100 days. This measure will complement the ongoing efforts and initiatives by the Reserve Bank to reduce the quantum of unclaimed deposits in the banking system and return such deposits to their rightful owners/ claimants.
On the second aspect, RBI has asked the banks to display the list of unclaimed deposits on their website. In order to improve and widen the access of depositors / beneficiaries to such data, RBI has decided to develop a web portal to enable search across multiple banks for possible unclaimed deposits based on user inputs. The search results will be enhanced by use of certain AI tools.
The banks are expected to commence the campaign for returning the deposits from June 01, 2023.
Source : RBI PRESS RELEASE DATED 12.05.2023
AXIS BANK TO ACQUIRE CITI RETAIL BUSINESS :
Dated 27.02.2023 : As reported earlier Citi Bank had reached an agreement with Axis Bank for the sale of Citi’s consumer business in India, on March 30, 2022. Now it is reported that Citi and Axis Bank will be completing the sale on March 1, 2023 .
From March 01, 2023, while the Citi Bank branches will be re-branded as Axis Bank branches & ATMs timings may change. The locations of Citi branches and ATMs will be the same.
However the retail accounts and services including credit cards will remain Citi-branded till around the second-half of 2024 or until further notification from Axis Bank. Your Citi Bank account number, Credit / Debit Card numbers, cheque books, IFSC, MICR codes remain the same for the present. Customers can continue to use the Citi Mobile® App or Citibank Online for all their banking needs . There is no change, for the present to the earning ratio and redemption process of your reward points, across both Citi Credit and Debit Cards.
Dated 27.02.2023 : As reported earlier Citi Bank had reached an agreement with Axis Bank for the sale of Citi’s consumer business in India, on March 30, 2022. Now it is reported that Citi and Axis Bank will be completing the sale on March 1, 2023 .
From March 01, 2023, while the Citi Bank branches will be re-branded as Axis Bank branches & ATMs timings may change. The locations of Citi branches and ATMs will be the same.
However the retail accounts and services including credit cards will remain Citi-branded till around the second-half of 2024 or until further notification from Axis Bank. Your Citi Bank account number, Credit / Debit Card numbers, cheque books, IFSC, MICR codes remain the same for the present. Customers can continue to use the Citi Mobile® App or Citibank Online for all their banking needs . There is no change, for the present to the earning ratio and redemption process of your reward points, across both Citi Credit and Debit Cards.
QR BASED COIN VENDING MACHINES :
Dated 09.02.2023 : Presently if you or your business needs coins , you have to get them from your banker . Banker may oblige you with the required change or not depends up on coins a chashier holds on behalf of the bank .
To mitigate the problem , RBI is coming out with a plan of installing QR based coin vending machines in collaboration of few banks .
QR-based coin vending machines ( QCVM ) are automated machines that dispense coins in exchange for a QR code displayed on your mobile . These machines typically use a QR code scanning system to process the transaction, which can include the exchange of digital currency for physical coins or the transfer of coins between accounts. The RBI proposed QCVM is a cashless coin dispensation machine which would dispense coins against a debit to the customer’s bank account using Unified Payments Interface (UPI).
QR code-based vending machines are becoming increasingly popular because they offer a fast, secure, and convenient way for people to obtain coins using digital transactions . They also offer a more streamlined and efficient alternative to traditional bank transactions and manual coin counting methods. Presently QCVM machines are in vogue in China , Japan , Korea , Europe and USA .
The pilot project planned by RBI is to be initially rolled out at 19 locations in 12 cities across the country. These vending machines are intended to be installed at public places such as railway stations, shopping malls, marketplaces to enhance ease and accessibility. Based on the learnings from the pilot tests, guidelines would be issued to banks to promote better distribution of coins using QCVMs.
HOW QCVMs WORK ?
QR-based coin vending machines typically work as follows:
Dated 09.02.2023 : Presently if you or your business needs coins , you have to get them from your banker . Banker may oblige you with the required change or not depends up on coins a chashier holds on behalf of the bank .
To mitigate the problem , RBI is coming out with a plan of installing QR based coin vending machines in collaboration of few banks .
QR-based coin vending machines ( QCVM ) are automated machines that dispense coins in exchange for a QR code displayed on your mobile . These machines typically use a QR code scanning system to process the transaction, which can include the exchange of digital currency for physical coins or the transfer of coins between accounts. The RBI proposed QCVM is a cashless coin dispensation machine which would dispense coins against a debit to the customer’s bank account using Unified Payments Interface (UPI).
QR code-based vending machines are becoming increasingly popular because they offer a fast, secure, and convenient way for people to obtain coins using digital transactions . They also offer a more streamlined and efficient alternative to traditional bank transactions and manual coin counting methods. Presently QCVM machines are in vogue in China , Japan , Korea , Europe and USA .
The pilot project planned by RBI is to be initially rolled out at 19 locations in 12 cities across the country. These vending machines are intended to be installed at public places such as railway stations, shopping malls, marketplaces to enhance ease and accessibility. Based on the learnings from the pilot tests, guidelines would be issued to banks to promote better distribution of coins using QCVMs.
HOW QCVMs WORK ?
QR-based coin vending machines typically work as follows:
- Scanning the QR code: The user scans the QR code displayed on their mobile device or printed on a piece of paper. This QR code contains information about the transaction, including the type of digital currency being used and the amount being exchanged.
- Processing the transaction: The machine reads the information contained in the QR code and processes the transaction. This may involve the exchange of digital currency for physical coins, the transfer of coins between accounts, or some other type of transaction.
- Dispensing coins: If the transaction involves the exchange of digital currency for physical coins, the machine will dispense the appropriate number of coins to the user.
- Confirming the transaction: Once the transaction is complete, the machine will typically display a confirmation message on its screen, indicating that the transaction has been processed successfully.
Central Bank is out of PCA
CENTRAL BANK OF INDIA IS OUT OF PCA FRAMEWORK
Dated 20.09.2022 : Reserve Bank of India ( RBI ) today announced through a press release , that it has been decided to take out Central Bank of India from the PCA framework ( Prompt Corrective Action Framework ) , subject to certain conditions and continuous monitoring.
The performance of the Central Bank of India, which was under the Prompt Corrective Action Framework (PCAF) of RBI, was reviewed by the Board for Financial Supervision. It was noted that as per the assessed figures of the bank for the year ended March 31, 2022, the bank is not in the breach of the PCA parameters. The bank has also provided a written commitment that it would comply with the norms of Minimum Regulatory Capital, Net NPA and Leverage ratio on an ongoing basis and has apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments
Indian overseas Bank was last taken out of PCA Framework in September 2021 and now no bank is under PCA Framework .
To read the press release of RBI , CLICK HERE
What is PCA Framework ?
The Reserve Bank has specified certain regulatory trigger points, as a part of prompt corrective action (PCA) Framework, in terms of three parameters, i.e. capital to risk weighted assets ratio (CRAR), net non-performing assets (NPA) and Return on Assets (RoA), for initiation of certain structured and discretionary actions in respect of banks hitting such trigger points. The PCA framework is applicable only to commercial banks and not extended to co-operative banks, non-banking financial companies (NBFCs) and FMIs .
Trigger Points :
1. CRAR : CRAR less than 9%, but equal or more than 6% - bank to submit capital restoration plan; restrictions on RWA expansion, entering into new lines of business, accessing/renewing costly deposits and CDs, and making dividend payments; order recapitalisation; restrictions on borrowing from inter-bank market, reduction of stake in subsidiaries, reducing its exposure to sensitive sectors like capital market, real
estate or investment in non-SLR securities, etc.
(ii) CRAR less than 6%, but equal or more than 3% - in addition to actions in hitting the first trigger point, RBI could take steps to bring in new Management/ Board, appoint consultants for business/ organizational restructuring, take steps to change ownership, and also take steps to merge the bank if it fails to submit recapitalization plan.
(iii) CRAR less than 3% - in addition to actions in hitting the first and second trigger points, more close monitoring; steps to merge/amalgamate/liquidate the bank or impose moratorium on the bank if its CRAR does not improve beyond 3% within one
year or within such extended period as agreed to
2. NET NPA : (i) Net NPAs over 10% but less than 15% - special drive to reduce NPAs and contain generation of fresh NPAs; review loan policy and take steps to strengthen credit appraisal skills, follow-up of advances and suit-filed/decreed debts, put in place proper credit-risk management policies; reduce loan concentration; restrictions in entering new lines of business, making dividend payments and
increasing its stake in subsidiaries.
(ii) Net NPAs 15% and above – In addition to actions on hitting the above trigger point, bank’s Board is called for discussion on corrective plan of action
3. ROA less than 0.25% - restrictions on accessing/renewing costly deposits and CDs, entering into new lines of business, bank’s borrowings from inter-bank market, making dividend payments and expanding its staff; steps to increase fee-based income; contain administrative expenses; special drive to reduce NPAs and contain generation of fresh NPAs; and restrictions on incurring any capital expenditure other
than for technological upgradation and for some emergency situations.
RESTRICTIONS UNDER PCA :
On bank reaching the levels of undercapitalized, or significantly undercapitalized, or critically undercapitalized, automatic restrictions, as per provisions of Section 38 of FDI Act, are placed on the concerned bank in respect of (i) payment of capital distributions and
management fees, (ii) the growth of assets, (iii) requiring prior approval of certain expansion proposals, (iv) requiring that the FDIC monitor the condition of the bank, and (v) requiring submission of a capital restoration plan .
In addition to the above restrictions and close monitoring, the significantly undercapitalized and critically undercapitalized banks are restricted to pay compensation to senior executive officers of the institution. The critically undercapitalized bank is, in addition to above, required to take prior approval from FDIC in respect of – entering into any material transaction other than in the usual course of business, such as any investment, expansion, acquisition, sale of assets, or other similar action; extending credit for any highly leveraged transaction; amending the institution’s charter or bylaws; making any material change in accounting methods; paying excessive compensation or bonuses; paying significantly high interest on new or renewed liabilities; making any principal or interest payment on subordinated debt beginning 60 days after becoming critically undercapitalized; and engaging in any covered transaction. In addition, FDIC may further restrict the activities of the critically undercapitalized bank.
Which Banks are undercapitalized ?
Undercapitalized Banks - (a) Fails to maintain the pledge of assets as per FDIC Rules and Regulations; OR (b) Fails to maintain eligible assets at 108% or more of the preceding quarter’s average book value of the branch’s third party liabilities. (iv) Significantly undercapitalized - (a) Fails to maintain eligible assets at 104% or more of the preceding quarter’s average book value of the branch’s third party liabilities. (v) Critically undercapitalized - (a) Fails to maintain eligible assets at 102% or more of the preceding quarter’s average book value of the branch’s third party liabilities.
For RBI Document on PCA Framework , click here
Dated 20.09.2022 : Reserve Bank of India ( RBI ) today announced through a press release , that it has been decided to take out Central Bank of India from the PCA framework ( Prompt Corrective Action Framework ) , subject to certain conditions and continuous monitoring.
The performance of the Central Bank of India, which was under the Prompt Corrective Action Framework (PCAF) of RBI, was reviewed by the Board for Financial Supervision. It was noted that as per the assessed figures of the bank for the year ended March 31, 2022, the bank is not in the breach of the PCA parameters. The bank has also provided a written commitment that it would comply with the norms of Minimum Regulatory Capital, Net NPA and Leverage ratio on an ongoing basis and has apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments
Indian overseas Bank was last taken out of PCA Framework in September 2021 and now no bank is under PCA Framework .
To read the press release of RBI , CLICK HERE
What is PCA Framework ?
The Reserve Bank has specified certain regulatory trigger points, as a part of prompt corrective action (PCA) Framework, in terms of three parameters, i.e. capital to risk weighted assets ratio (CRAR), net non-performing assets (NPA) and Return on Assets (RoA), for initiation of certain structured and discretionary actions in respect of banks hitting such trigger points. The PCA framework is applicable only to commercial banks and not extended to co-operative banks, non-banking financial companies (NBFCs) and FMIs .
Trigger Points :
1. CRAR : CRAR less than 9%, but equal or more than 6% - bank to submit capital restoration plan; restrictions on RWA expansion, entering into new lines of business, accessing/renewing costly deposits and CDs, and making dividend payments; order recapitalisation; restrictions on borrowing from inter-bank market, reduction of stake in subsidiaries, reducing its exposure to sensitive sectors like capital market, real
estate or investment in non-SLR securities, etc.
(ii) CRAR less than 6%, but equal or more than 3% - in addition to actions in hitting the first trigger point, RBI could take steps to bring in new Management/ Board, appoint consultants for business/ organizational restructuring, take steps to change ownership, and also take steps to merge the bank if it fails to submit recapitalization plan.
(iii) CRAR less than 3% - in addition to actions in hitting the first and second trigger points, more close monitoring; steps to merge/amalgamate/liquidate the bank or impose moratorium on the bank if its CRAR does not improve beyond 3% within one
year or within such extended period as agreed to
2. NET NPA : (i) Net NPAs over 10% but less than 15% - special drive to reduce NPAs and contain generation of fresh NPAs; review loan policy and take steps to strengthen credit appraisal skills, follow-up of advances and suit-filed/decreed debts, put in place proper credit-risk management policies; reduce loan concentration; restrictions in entering new lines of business, making dividend payments and
increasing its stake in subsidiaries.
(ii) Net NPAs 15% and above – In addition to actions on hitting the above trigger point, bank’s Board is called for discussion on corrective plan of action
3. ROA less than 0.25% - restrictions on accessing/renewing costly deposits and CDs, entering into new lines of business, bank’s borrowings from inter-bank market, making dividend payments and expanding its staff; steps to increase fee-based income; contain administrative expenses; special drive to reduce NPAs and contain generation of fresh NPAs; and restrictions on incurring any capital expenditure other
than for technological upgradation and for some emergency situations.
RESTRICTIONS UNDER PCA :
On bank reaching the levels of undercapitalized, or significantly undercapitalized, or critically undercapitalized, automatic restrictions, as per provisions of Section 38 of FDI Act, are placed on the concerned bank in respect of (i) payment of capital distributions and
management fees, (ii) the growth of assets, (iii) requiring prior approval of certain expansion proposals, (iv) requiring that the FDIC monitor the condition of the bank, and (v) requiring submission of a capital restoration plan .
In addition to the above restrictions and close monitoring, the significantly undercapitalized and critically undercapitalized banks are restricted to pay compensation to senior executive officers of the institution. The critically undercapitalized bank is, in addition to above, required to take prior approval from FDIC in respect of – entering into any material transaction other than in the usual course of business, such as any investment, expansion, acquisition, sale of assets, or other similar action; extending credit for any highly leveraged transaction; amending the institution’s charter or bylaws; making any material change in accounting methods; paying excessive compensation or bonuses; paying significantly high interest on new or renewed liabilities; making any principal or interest payment on subordinated debt beginning 60 days after becoming critically undercapitalized; and engaging in any covered transaction. In addition, FDIC may further restrict the activities of the critically undercapitalized bank.
Which Banks are undercapitalized ?
Undercapitalized Banks - (a) Fails to maintain the pledge of assets as per FDIC Rules and Regulations; OR (b) Fails to maintain eligible assets at 108% or more of the preceding quarter’s average book value of the branch’s third party liabilities. (iv) Significantly undercapitalized - (a) Fails to maintain eligible assets at 104% or more of the preceding quarter’s average book value of the branch’s third party liabilities. (v) Critically undercapitalized - (a) Fails to maintain eligible assets at 102% or more of the preceding quarter’s average book value of the branch’s third party liabilities.
For RBI Document on PCA Framework , click here
GUIDELINES TO DIGITA LENDING
GUIDELINES TO DIGITAL LENDING :
Dated 06.09.2022 : In recent times , many tales of harassment by Digital lenders through usurping charges and interest rates and unfair recovery process are under circulation in media . This has also lead to suicides of borrowers in some cases . In all the cases , loans are disbursed in minutes without informing the terms and conditions properly and high hand methods are used to recover the loans along with unbearable charges . Many of us also would have received calls offering hassle free loans in crores with a promise to credit the loan proceeds in minutes .
With this background of happenings , Reserve Bank of India ( RBI ) has brought out detailed guidelines for Digital lending by banks and other financial entities to streamline the process . The guidelines cover Disclosures to be made by the lenders before disbursal like interest rates, penal interest , total charges , repayment schedule and other terms and conditions . Details of recovery agents should be intimated to the borrower in advance . Borrower is also to be provided with a cooling period , during which borrower can return entire loan disbursed already .
The guideline also details the duties and responsibilities of banks while appointing LSP ( LENDING SERVICE PROVIDER ) for assisting them in disbursal and recovery of loans .
Some of the Guidelines :
1. Loan Disbursal, Servicing and Repayment - Lenders shall ensure that all loan servicing, repayment, etc., shall be executed by the borrower directly in the RE’s bank account without any pass-through account/ pool account of any third party. The disbursements shall always be made into the bank account of the borrower except for disbursals covered exclusively under statutory or regulatory mandate (of RBI or of any other regulator), flow of money between lenders for co-lending transactions and disbursals for specific end use, provided the loan is disbursed directly into the bank account of the end-beneficiary. REs shall ensure that in no case, disbursal is made to a third-party account, including the accounts of LSPs and their DLAs, except as provided for in these guidelines.
2. Payment of Fees/Charges: Lenders shall ensure that any fees, charges, etc., payable to LSPs are paid directly by them (REs) and are not charged by LSP to the borrower directly.
3. Penal Interest/ Charges: The penal interest/charges levied, if any, on the borrowers shall be based on the outstanding amount of the loan. Further, rate of such penal charges shall be disclosed upfront on an annualized basis to the borrower in the Key Fact Statement (KFS).
4. Annual Percentage Rate (APR) - APR as all-inclusive cost of digital loans for the borrower shall be disclosed upfront by REs and shall also be a part of the Key Fact Statement.
5. Details of recovery agent – Lenders shall communicate to the borrower, at the time of sanctioning of the loan and also at the time of passing on the recovery responsibilities to an LSP or change in the LSP responsible for recovery, the details of the LSP acting as recovery agent who is authorised to approach the borrower for recovery.
6. Lenders shall ensure that LSPs/DLAs engaged by them do not store personal information of borrowers except some basic minimal data (viz., name, address, contact details of the customer, etc.) that may be required to carry out their operations. Responsibility regarding data privacy and security of the customer’s personal information will be that of the lenders
To read RBI Notification in this regard , CLICK HERE
Dated 06.09.2022 : In recent times , many tales of harassment by Digital lenders through usurping charges and interest rates and unfair recovery process are under circulation in media . This has also lead to suicides of borrowers in some cases . In all the cases , loans are disbursed in minutes without informing the terms and conditions properly and high hand methods are used to recover the loans along with unbearable charges . Many of us also would have received calls offering hassle free loans in crores with a promise to credit the loan proceeds in minutes .
With this background of happenings , Reserve Bank of India ( RBI ) has brought out detailed guidelines for Digital lending by banks and other financial entities to streamline the process . The guidelines cover Disclosures to be made by the lenders before disbursal like interest rates, penal interest , total charges , repayment schedule and other terms and conditions . Details of recovery agents should be intimated to the borrower in advance . Borrower is also to be provided with a cooling period , during which borrower can return entire loan disbursed already .
The guideline also details the duties and responsibilities of banks while appointing LSP ( LENDING SERVICE PROVIDER ) for assisting them in disbursal and recovery of loans .
Some of the Guidelines :
1. Loan Disbursal, Servicing and Repayment - Lenders shall ensure that all loan servicing, repayment, etc., shall be executed by the borrower directly in the RE’s bank account without any pass-through account/ pool account of any third party. The disbursements shall always be made into the bank account of the borrower except for disbursals covered exclusively under statutory or regulatory mandate (of RBI or of any other regulator), flow of money between lenders for co-lending transactions and disbursals for specific end use, provided the loan is disbursed directly into the bank account of the end-beneficiary. REs shall ensure that in no case, disbursal is made to a third-party account, including the accounts of LSPs and their DLAs, except as provided for in these guidelines.
2. Payment of Fees/Charges: Lenders shall ensure that any fees, charges, etc., payable to LSPs are paid directly by them (REs) and are not charged by LSP to the borrower directly.
3. Penal Interest/ Charges: The penal interest/charges levied, if any, on the borrowers shall be based on the outstanding amount of the loan. Further, rate of such penal charges shall be disclosed upfront on an annualized basis to the borrower in the Key Fact Statement (KFS).
4. Annual Percentage Rate (APR) - APR as all-inclusive cost of digital loans for the borrower shall be disclosed upfront by REs and shall also be a part of the Key Fact Statement.
5. Details of recovery agent – Lenders shall communicate to the borrower, at the time of sanctioning of the loan and also at the time of passing on the recovery responsibilities to an LSP or change in the LSP responsible for recovery, the details of the LSP acting as recovery agent who is authorised to approach the borrower for recovery.
6. Lenders shall ensure that LSPs/DLAs engaged by them do not store personal information of borrowers except some basic minimal data (viz., name, address, contact details of the customer, etc.) that may be required to carry out their operations. Responsibility regarding data privacy and security of the customer’s personal information will be that of the lenders
To read RBI Notification in this regard , CLICK HERE
FCNR / NRE DEPOSITS INTEREST RATES LIBERALIZED
RBI RELAXES INTEREST RATE RESTRICTIONS ON NRE / FCNR :
SLR / CRR Rules modified :
Dated 07.07.2022 : India is now facing outflow of foreign investments due to fear of recession and consequently Rupee value has touched all time Low . In a bid to bolster the inflow of Foreign Exchange in to the country , Reserve Bank of India ( RBI ) has relaxed present ceiling on Interest rates that can be offered by Indian Banks to the non resident Indian customers . It has also given Exemption from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) on Incremental FCNR(B) and NRE Term Deposits . Both concessions are being offered for a limited period only .
1. Interest Rates on FCNR(B) and NRE Deposits
At present, interest rates on Foreign Currency Non-Resident Bank [FCNR(B)] deposits are subject to ceilings of Overnight Alternative Reference Rate (ARR) for the respective currency/swap plus 250 basis points for deposits of 1 year to less than 3 years maturity and overnight ARR plus 350 basis points for deposits of 3 years and above and up to 5 years maturity. In case of NRE deposits, as per extant instructions, interest rates cannot be offered higher than those offered to comparable domestic rupee term deposits. Now RBI has decided to temporarily permit banks to raise fresh FCNR(B) and NRE deposits without reference to the extant regulations on interest rates, with effect from July 7, 2022. This relaxation will be available for the period up to October 31, 2022.
1. Exemption from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) on Incremental FCNR(B) and NRE Term Deposits
At present, banks are required to include all Foreign Currency Non-Resident (Bank) [FCNR(B)] and Non-Resident (External) Rupee (NRE) deposit liabilities for computation of Net Demand and Time Liabilities (NDTL) for maintenance of CRR and SLR. RBI has now decided that with effect from the reporting fortnight beginning July 30, 2022 incremental FCNR(B) and NRE deposits with reference base date of July 1, 2022 will be exempt from the maintenance of CRR and SLR. This relaxation will be available for deposits mobilised up to November 4, 2022. Transfers from Non-Resident (Ordinary) (NRO) accounts to NRE accounts shall not qualify for the relaxation.
Further RBI has extended concessions on Foreign Portfolio Investors , Foreign Currency Lending by Authorised Dealer Category I (AD Cat-I) Banks and on . External Commercial Borrowings (ECBs)
To know various measures taken by RBI to facilitate higher inflow of Foreign Exchange , CLICK HERE
With these measures of RBI , non-resident Indians can expect higher rates of interest rates from Indian Banks for their fresh NRE Deposits as well as for FCNR Deposits , for a limited period of time .
SLR / CRR Rules modified :
Dated 07.07.2022 : India is now facing outflow of foreign investments due to fear of recession and consequently Rupee value has touched all time Low . In a bid to bolster the inflow of Foreign Exchange in to the country , Reserve Bank of India ( RBI ) has relaxed present ceiling on Interest rates that can be offered by Indian Banks to the non resident Indian customers . It has also given Exemption from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) on Incremental FCNR(B) and NRE Term Deposits . Both concessions are being offered for a limited period only .
1. Interest Rates on FCNR(B) and NRE Deposits
At present, interest rates on Foreign Currency Non-Resident Bank [FCNR(B)] deposits are subject to ceilings of Overnight Alternative Reference Rate (ARR) for the respective currency/swap plus 250 basis points for deposits of 1 year to less than 3 years maturity and overnight ARR plus 350 basis points for deposits of 3 years and above and up to 5 years maturity. In case of NRE deposits, as per extant instructions, interest rates cannot be offered higher than those offered to comparable domestic rupee term deposits. Now RBI has decided to temporarily permit banks to raise fresh FCNR(B) and NRE deposits without reference to the extant regulations on interest rates, with effect from July 7, 2022. This relaxation will be available for the period up to October 31, 2022.
1. Exemption from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) on Incremental FCNR(B) and NRE Term Deposits
At present, banks are required to include all Foreign Currency Non-Resident (Bank) [FCNR(B)] and Non-Resident (External) Rupee (NRE) deposit liabilities for computation of Net Demand and Time Liabilities (NDTL) for maintenance of CRR and SLR. RBI has now decided that with effect from the reporting fortnight beginning July 30, 2022 incremental FCNR(B) and NRE deposits with reference base date of July 1, 2022 will be exempt from the maintenance of CRR and SLR. This relaxation will be available for deposits mobilised up to November 4, 2022. Transfers from Non-Resident (Ordinary) (NRO) accounts to NRE accounts shall not qualify for the relaxation.
Further RBI has extended concessions on Foreign Portfolio Investors , Foreign Currency Lending by Authorised Dealer Category I (AD Cat-I) Banks and on . External Commercial Borrowings (ECBs)
To know various measures taken by RBI to facilitate higher inflow of Foreign Exchange , CLICK HERE
With these measures of RBI , non-resident Indians can expect higher rates of interest rates from Indian Banks for their fresh NRE Deposits as well as for FCNR Deposits , for a limited period of time .
CENTRAL BANK OF INDIA TO CLOSE 600 BRANCHES
CENTRAL BANK OF INDIA TO CLOSE / MERGE BRANCHES BY MARCH 2023 : REUTERS
Dated 06.05.2022 : Reuters News agency ,quoting a document seen / reviewed by them , has reported that the Public Sector bank Central Bank of India , headquartered in Mumbai ,is planning to close / merge around 13 % of its branches before March 2023 .
The 110 year old bank has 4,594 branches spread in 28 states and 7 Union Territories in India . It is expected that 600 loss making branches will be candidates for merger / closure as per the plan .
In the last year June month , it was widely reported that Indian Overseas Bank and Central Bank of India as the two banks recommended by Niti Ayog for privatization and the reports were not disputed by the government . Central bank of India was placed under PCA Framework ( Prompt Corrective Action Framework ) in 2017 by RBI and various constraints in doing its normal business . Banks put under PCA framework are regulated in respect of (i) payment of capital distributions and management fees, (ii) the growth of assets, (iii) requiring prior approval of certain expansion proposals, (iv) requiring that the FDIC monitor the condition of the bank, and (v) requiring submission of a capital restoration plan . The bank is yet to come out of it , even when other PSBS put under similar constraints have come out of the framework .
Reserve Bank of India or the Central Bank of India management have not responded so far on the report .
Dated 06.05.2022 : Reuters News agency ,quoting a document seen / reviewed by them , has reported that the Public Sector bank Central Bank of India , headquartered in Mumbai ,is planning to close / merge around 13 % of its branches before March 2023 .
The 110 year old bank has 4,594 branches spread in 28 states and 7 Union Territories in India . It is expected that 600 loss making branches will be candidates for merger / closure as per the plan .
In the last year June month , it was widely reported that Indian Overseas Bank and Central Bank of India as the two banks recommended by Niti Ayog for privatization and the reports were not disputed by the government . Central bank of India was placed under PCA Framework ( Prompt Corrective Action Framework ) in 2017 by RBI and various constraints in doing its normal business . Banks put under PCA framework are regulated in respect of (i) payment of capital distributions and management fees, (ii) the growth of assets, (iii) requiring prior approval of certain expansion proposals, (iv) requiring that the FDIC monitor the condition of the bank, and (v) requiring submission of a capital restoration plan . The bank is yet to come out of it , even when other PSBS put under similar constraints have come out of the framework .
Reserve Bank of India or the Central Bank of India management have not responded so far on the report .
AXIS BANK TO ACQUIRE CITI BANK INDIAN RETAIL BUSINESS :
Dated 31.03.2022 : Citi bank , headquartered in New York USA , announced that it has reached an agreement with Axis Bank Limited (Axis) for the sale of Citi’s consumer businesses in India. Axis was selected by Citi following an extensive and competitive auction process.
Consumer banking businesses of Citibank India includes credit cards, retail banking, wealth management and consumer loans. The transaction also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio. It excludes Citi’s institutional client businesses in India .
3,600 Citi employees supporting the consumer businesses in India will be employees of Axis Bank upon completion of the proposed transaction. Axis will pay to Citi cash consideration of approximately US$1.6 billion for the acquisition of the consumer business .
Citibank India has a history of more than 100 years in India . It was established in 1902 in Calcutta (Kolkata ). Currently, Citigroup, the owner of Citi India, is one of the largest foreign direct investors in financial services in the country. Citi bank has taken initiatives to bring to India many new products and services such as the ATM, credit card, 24-hour phone banking, internet banking, and instant SMS alerts. Citi bank is presently has branches in more than 12 cities and prominent foreign bank serving India .
Sources : Citibank announcement
Dated 31.03.2022 : Citi bank , headquartered in New York USA , announced that it has reached an agreement with Axis Bank Limited (Axis) for the sale of Citi’s consumer businesses in India. Axis was selected by Citi following an extensive and competitive auction process.
Consumer banking businesses of Citibank India includes credit cards, retail banking, wealth management and consumer loans. The transaction also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio. It excludes Citi’s institutional client businesses in India .
3,600 Citi employees supporting the consumer businesses in India will be employees of Axis Bank upon completion of the proposed transaction. Axis will pay to Citi cash consideration of approximately US$1.6 billion for the acquisition of the consumer business .
Citibank India has a history of more than 100 years in India . It was established in 1902 in Calcutta (Kolkata ). Currently, Citigroup, the owner of Citi India, is one of the largest foreign direct investors in financial services in the country. Citi bank has taken initiatives to bring to India many new products and services such as the ATM, credit card, 24-hour phone banking, internet banking, and instant SMS alerts. Citi bank is presently has branches in more than 12 cities and prominent foreign bank serving India .
Sources : Citibank announcement
SPECIAL CLEARING ON 31ST , MARCH , 2022 : RBI
Dated 29.03.2022 : To facilitate accounting of all the Government transactions for the current financial year (2021-22) by March 31, 2022, Reserve Bank of India ( RBI )has decided to conduct Special Clearing exclusively for Government Cheques across the three CTS grids on March 31, 2022 as detailed below:
Locations : CTS Grids (New Delhi, Chennai and Mumbai)
Presentation Timing : Between 17:00 and 17:30 Hours
Return clearing Timings : Between 19:00 and 19:30 Hours
As per RBI Notification , it is mandatory for all banks to participate in the special clearing operations on March 31, 2022. All the member banks under the respective CTS Grids are required to keep their inward clearing processing infrastructure open during the Special Clearing hours and maintain sufficient balance in their clearing settlement account to meet settlement obligations arising out of the Special Clearing.
To read RBI Notification dated 28.03.2022 , CLICK HERE
Dated 29.03.2022 : To facilitate accounting of all the Government transactions for the current financial year (2021-22) by March 31, 2022, Reserve Bank of India ( RBI )has decided to conduct Special Clearing exclusively for Government Cheques across the three CTS grids on March 31, 2022 as detailed below:
Locations : CTS Grids (New Delhi, Chennai and Mumbai)
Presentation Timing : Between 17:00 and 17:30 Hours
Return clearing Timings : Between 19:00 and 19:30 Hours
As per RBI Notification , it is mandatory for all banks to participate in the special clearing operations on March 31, 2022. All the member banks under the respective CTS Grids are required to keep their inward clearing processing infrastructure open during the Special Clearing hours and maintain sufficient balance in their clearing settlement account to meet settlement obligations arising out of the Special Clearing.
To read RBI Notification dated 28.03.2022 , CLICK HERE
SMALL VALUE OFFLINE PAYMENTS CAN BE MADE WITHOUT OTP NOW :
Dated 04.01.2022 : Reserve Bank of India ( RBI ) has permitted banks and non-banks to carry out off-line payments under cards , wallets or mobile payments without OTP only for small value transaction . Transaction limit is just Rs 200 and it should be only in face to face mode .
In this regard , RBI has following guidelines to the financial entities desirous of providing such facilities to their customers
1. Offline payments may be made using any channel or instrument like cards, wallets, mobile devices, etc.
2. Offline payments shall be made in proximity (face to face) mode only.
3. Offline payment transactions may be offered without Additional Factor of Authentication (AFA).
4. Payment instruments shall be enabled for offline transactions based on explicit consent of the customer. Such transactions using cards shall be allowed without a requirement to switch on the contactless transaction channel, in relaxation of earlier guidelines issued in January 2020 .
5. The upper limit of an offline payment transaction shall be ₹200. The total limit for offline transactions on a payment instrument shall be ₹2,000 at any point in time. Replenishment of used limit shall be allowed only in online mode with AFA.
6. The issuer shall send transaction alerts to users as soon as transaction details are received. There is no compulsion to send alert for each transaction . However, details of each transaction shall be adequately conveyed.
7. The acquirer shall incur all liabilities arising out of technical or transaction security issues at merchant’s end.
8 . Offline payments shall be covered under the provisions of RBI’s limited customer liability circulars
9.The customers shall have recourse to the Reserve Bank – Integrated Ombudsman Scheme, as applicable, for grievance redressal.
To read RBI notification in this regard , CLICK HERE
Dated 04.01.2022 : Reserve Bank of India ( RBI ) has permitted banks and non-banks to carry out off-line payments under cards , wallets or mobile payments without OTP only for small value transaction . Transaction limit is just Rs 200 and it should be only in face to face mode .
In this regard , RBI has following guidelines to the financial entities desirous of providing such facilities to their customers
1. Offline payments may be made using any channel or instrument like cards, wallets, mobile devices, etc.
2. Offline payments shall be made in proximity (face to face) mode only.
3. Offline payment transactions may be offered without Additional Factor of Authentication (AFA).
4. Payment instruments shall be enabled for offline transactions based on explicit consent of the customer. Such transactions using cards shall be allowed without a requirement to switch on the contactless transaction channel, in relaxation of earlier guidelines issued in January 2020 .
5. The upper limit of an offline payment transaction shall be ₹200. The total limit for offline transactions on a payment instrument shall be ₹2,000 at any point in time. Replenishment of used limit shall be allowed only in online mode with AFA.
6. The issuer shall send transaction alerts to users as soon as transaction details are received. There is no compulsion to send alert for each transaction . However, details of each transaction shall be adequately conveyed.
7. The acquirer shall incur all liabilities arising out of technical or transaction security issues at merchant’s end.
8 . Offline payments shall be covered under the provisions of RBI’s limited customer liability circulars
9.The customers shall have recourse to the Reserve Bank – Integrated Ombudsman Scheme, as applicable, for grievance redressal.
To read RBI notification in this regard , CLICK HERE
RBL MANAGEMENT SHAKE UP :
RBI ASSURES RBL BANK CUSTOMERS : The Bank in Today's News
Dated 27.12.2021 : The private sector Bank RBL Limited , a Kolhapur , Maharashtra based lender , is in news today . Its Chief Executive Officer Mr Vishwavir Ahuja has gone on medical leave for 3 months and the board of the bank has appointed Mr Rahul Ahuja as its Interim Managing director and CEO . Meantime Reserve Bank of India ( RBI ) has appointed Mr Yogesh Dayal as an additional Director for the bank . Further RBI has clarified that appointment of Additional Director/s in private banks is undertaken under Section 36AB of the Banking Regulation Act, 1949 as and when it is felt that the board needs closer support in regulatory / supervisory matters.
Amid the speculation on the financial health of the bank in some quarters , RBI has assured the depositors and other stake holders that the bank is well capitalised and the financial position of the bank remains satisfactory. RBI further states that , as per half yearly audited results as on September 30, 2021, the bank has maintained a comfortable Capital Adequacy Ratio of 16.33 per cent and Provision Coverage Ratio of 76.6 per cent. The Liquidity Coverage Ratio (LCR) of the bank is 153 per cent as on December 24, 2021 as against regulatory requirement of 100 per cent.
As per RBL s press release dated yesterday ,
" 1. Financial position of RBL Bank remains robust Capital adequacy was 16.3% and will be in a similar range this quarter
2. Liquidity Coverage ratios have been well above regulatory requirements – it was 155% for the
September quarter
3. On asset quality, our slippages peaked in Q2 and will be improving this quarter and next as we
had guided previously. The NPA position of the Bank will also be on an improving trend. We
want to point out here that we have been upfront and transparent on any challenges that we
have faced in our various business segments in the past.
4. To reiterate there is no change from what we have been communicating all along
o On Growth, traction on advances is picking up while we continue to keep improving granularity
on both advances and deposits "
Amid the news of changes in high echelons of the bank & speculation on the health of the bank , the bank's share price has crashed about 17 % from the opening price of Rs 155.65 to Rs 142 per share ( at the time of publishing the news ) .
ABOUT RBL BANK :
RBL Bank, formerly known as Ratnakar Bank, is an Indian private sector bank founded in 1943. It offers banking services such as corporate and institutional banking, commercial banking, branch and business banking, retail assets, development banking and financial inclusion, treasury and financial market operations . In 1959, the bank was categorized as a scheduled commercial bank as per the Reserve Bank of India Act, 1934. In July 2010, Vishwavir Ahuja became managing director and CEO of the bank. In August 2014 the name of the bank was changed to RBL Bank Limited .
The bank has over 9.83 million customers through a network of 435 branches; 1,422 business correspondent branches (of which 271 banking outlets) and 380 ATMs spread across 28 Indian states and Union Territories.
RBI ASSURES RBL BANK CUSTOMERS : The Bank in Today's News
Dated 27.12.2021 : The private sector Bank RBL Limited , a Kolhapur , Maharashtra based lender , is in news today . Its Chief Executive Officer Mr Vishwavir Ahuja has gone on medical leave for 3 months and the board of the bank has appointed Mr Rahul Ahuja as its Interim Managing director and CEO . Meantime Reserve Bank of India ( RBI ) has appointed Mr Yogesh Dayal as an additional Director for the bank . Further RBI has clarified that appointment of Additional Director/s in private banks is undertaken under Section 36AB of the Banking Regulation Act, 1949 as and when it is felt that the board needs closer support in regulatory / supervisory matters.
Amid the speculation on the financial health of the bank in some quarters , RBI has assured the depositors and other stake holders that the bank is well capitalised and the financial position of the bank remains satisfactory. RBI further states that , as per half yearly audited results as on September 30, 2021, the bank has maintained a comfortable Capital Adequacy Ratio of 16.33 per cent and Provision Coverage Ratio of 76.6 per cent. The Liquidity Coverage Ratio (LCR) of the bank is 153 per cent as on December 24, 2021 as against regulatory requirement of 100 per cent.
As per RBL s press release dated yesterday ,
" 1. Financial position of RBL Bank remains robust Capital adequacy was 16.3% and will be in a similar range this quarter
2. Liquidity Coverage ratios have been well above regulatory requirements – it was 155% for the
September quarter
3. On asset quality, our slippages peaked in Q2 and will be improving this quarter and next as we
had guided previously. The NPA position of the Bank will also be on an improving trend. We
want to point out here that we have been upfront and transparent on any challenges that we
have faced in our various business segments in the past.
4. To reiterate there is no change from what we have been communicating all along
o On Growth, traction on advances is picking up while we continue to keep improving granularity
on both advances and deposits "
Amid the news of changes in high echelons of the bank & speculation on the health of the bank , the bank's share price has crashed about 17 % from the opening price of Rs 155.65 to Rs 142 per share ( at the time of publishing the news ) .
ABOUT RBL BANK :
RBL Bank, formerly known as Ratnakar Bank, is an Indian private sector bank founded in 1943. It offers banking services such as corporate and institutional banking, commercial banking, branch and business banking, retail assets, development banking and financial inclusion, treasury and financial market operations . In 1959, the bank was categorized as a scheduled commercial bank as per the Reserve Bank of India Act, 1934. In July 2010, Vishwavir Ahuja became managing director and CEO of the bank. In August 2014 the name of the bank was changed to RBL Bank Limited .
The bank has over 9.83 million customers through a network of 435 branches; 1,422 business correspondent branches (of which 271 banking outlets) and 380 ATMs spread across 28 Indian states and Union Territories.
NOW PAYMENT BANKS AND SFBS CAN DO GOVERNMENT AGENCY BUSINESS :
Dated 16.12.2021 : Now Reserve Bank of India ( RBI ) has decided to make scheduled payments banks and scheduled small finance banks eligible to conduct Government agency business. Any payment bank or small finance bank that intends to undertake Government agency business may be appointed as an agent of RBI upon execution of an agreement with RBI, provided that the overarching regulatory framework prescribed for these banks is complied with. RBI has taken the decision after consulting the Ministry of Finance of the central government . Already private sector banks have been permitted to apply for government agency business .
The procedure to be followed to accredit an agency bank will be as under:
For Central Government/Union Territory business: For Central Government/Union Territory business, the concerned Civil/Non-Civil Ministry/Department may work out the arrangement with the agency bank and send the proposal of accreditation of the agency bank/providing new/additional government agency business to the O/o CGA for examination. The O/o CGA will forward their recommendation on the proposal to DGBA CO and on consideration, RBI will formally authorise the agency bank as accredited bank/ for providing the new/additional government agency business to the concerned Civil/ Non-civil Ministry/Department.
For State Government business: The concerned Department of the State Government may work out the arrangement and approach the Finance Department of the State Government which will recommend the proposal for accreditation of the agency bank/providing new/additional government agency business to the concerned Regional Director of RBI, who will forward the case with his/her comments to the DGBA, CO for approval and further action. On consideration, RBI will formally authorise the agency bank as accredited bank/for providing the new/additional government agency business to the concerned State Government.
To read RBI Notification in thi regard , CLICK HERE
Dated 16.12.2021 : Now Reserve Bank of India ( RBI ) has decided to make scheduled payments banks and scheduled small finance banks eligible to conduct Government agency business. Any payment bank or small finance bank that intends to undertake Government agency business may be appointed as an agent of RBI upon execution of an agreement with RBI, provided that the overarching regulatory framework prescribed for these banks is complied with. RBI has taken the decision after consulting the Ministry of Finance of the central government . Already private sector banks have been permitted to apply for government agency business .
The procedure to be followed to accredit an agency bank will be as under:
For Central Government/Union Territory business: For Central Government/Union Territory business, the concerned Civil/Non-Civil Ministry/Department may work out the arrangement with the agency bank and send the proposal of accreditation of the agency bank/providing new/additional government agency business to the O/o CGA for examination. The O/o CGA will forward their recommendation on the proposal to DGBA CO and on consideration, RBI will formally authorise the agency bank as accredited bank/ for providing the new/additional government agency business to the concerned Civil/ Non-civil Ministry/Department.
For State Government business: The concerned Department of the State Government may work out the arrangement and approach the Finance Department of the State Government which will recommend the proposal for accreditation of the agency bank/providing new/additional government agency business to the concerned Regional Director of RBI, who will forward the case with his/her comments to the DGBA, CO for approval and further action. On consideration, RBI will formally authorise the agency bank as accredited bank/for providing the new/additional government agency business to the concerned State Government.
To read RBI Notification in thi regard , CLICK HERE
INTEGRATED OMBUDSMAN SCHEME 2021 :
Dated 15.11.2021 : The Reserve Bank - Integrated Ombudsman Scheme, 2021 (the Scheme) was launched in virtual mode by Hon’ble Prime Minister Shri Narendra Modi.
2. The Scheme integrates the existing three Ombudsman schemes of RBI namely, (i) the Banking Ombudsman Scheme, 2006; (ii) the Ombudsman Scheme for Non-Banking Financial Companies, 2018; and (iii) the Ombudsman Scheme for Digital Transactions, 2019. The Scheme will provide cost-free redress of customer complaints involving deficiency in services rendered by Banks and other entities regulated by RBI, if not resolved to the satisfaction of the customers or not replied within a period of 30 days by the regulated financial institution .
3. In addition to integrating the three existing schemes, the Scheme also includes under its ambit Non-Scheduled Primary Co-operative Banks with a deposit size of ₹50 crore and above. The Scheme adopts ‘One Nation One Ombudsman’ approach by making the RBI Ombudsman mechanism jurisdiction neutral.
4. Some of the salient features of the Scheme are:
6. Complaints can continue to be filed online on https://cms.rbi.org.in. Complaints can also be filed through the dedicated e-mail or sent in physical mode to the ‘Centralised Receipt and Processing Centre’ set up at Reserve Bank of India, 4th Floor, Sector 17, Chandigarh - 160017 in the format. Additionally, a Contact Centre with a toll-free number – 14448 (9:30 am to 5:15 pm) – is also being operationalised in Hindi, English and in eight regional languages to begin with and will be expanded to cover other Indian languages in due course. The Contact Centre will provide information/clarifications regarding the alternate grievance redress mechanism of RBI and to guide complainants in filing of a complaint.
7. A copy of the Scheme is available on the RBI website and on the CMS portal (https://cms.rbi.org.in). The Scheme will be effective from today.
Dated 15.11.2021 : The Reserve Bank - Integrated Ombudsman Scheme, 2021 (the Scheme) was launched in virtual mode by Hon’ble Prime Minister Shri Narendra Modi.
2. The Scheme integrates the existing three Ombudsman schemes of RBI namely, (i) the Banking Ombudsman Scheme, 2006; (ii) the Ombudsman Scheme for Non-Banking Financial Companies, 2018; and (iii) the Ombudsman Scheme for Digital Transactions, 2019. The Scheme will provide cost-free redress of customer complaints involving deficiency in services rendered by Banks and other entities regulated by RBI, if not resolved to the satisfaction of the customers or not replied within a period of 30 days by the regulated financial institution .
3. In addition to integrating the three existing schemes, the Scheme also includes under its ambit Non-Scheduled Primary Co-operative Banks with a deposit size of ₹50 crore and above. The Scheme adopts ‘One Nation One Ombudsman’ approach by making the RBI Ombudsman mechanism jurisdiction neutral.
4. Some of the salient features of the Scheme are:
- It will no longer be necessary for a complainant to identify under which scheme he/she should file complaint with the Ombudsman.
- The Scheme defines ‘deficiency in service’ as the ground for filing a complaint, with a specified list of exclusions. Therefore, the complaints would no longer be rejected simply on account of “not covered under the grounds listed in the scheme”.
- The Scheme has done away with the jurisdiction of each ombudsman office.
- A Centralised Receipt and Processing Centre has been set up at RBI, Chandigarh for receipt and initial processing of physical and email complaints in any language.
- The responsibility of representing the Regulated Entity and furnishing information in respect of complaints filed by customers against the Regulated Entity would be that of the Principal Nodal Officer in the rank of a General Manager in a Public Sector Bank or equivalent.
- The Regulated Entity will not have the right to appeal in cases where an Award is issued by the ombudsman against it for not furnishing satisfactory and timely information/documents.
6. Complaints can continue to be filed online on https://cms.rbi.org.in. Complaints can also be filed through the dedicated e-mail or sent in physical mode to the ‘Centralised Receipt and Processing Centre’ set up at Reserve Bank of India, 4th Floor, Sector 17, Chandigarh - 160017 in the format. Additionally, a Contact Centre with a toll-free number – 14448 (9:30 am to 5:15 pm) – is also being operationalised in Hindi, English and in eight regional languages to begin with and will be expanded to cover other Indian languages in due course. The Contact Centre will provide information/clarifications regarding the alternate grievance redress mechanism of RBI and to guide complainants in filing of a complaint.
7. A copy of the Scheme is available on the RBI website and on the CMS portal (https://cms.rbi.org.in). The Scheme will be effective from today.
LIMIT ON IMPS SERVICE ENHANCED :
Dated 08.10.2021 : Today Reserve Bank of India ( RBI ) announced that per-transaction limit for IMPS transactions will be enhanced from present Rs 2 lakhs to Rs 5.00 lakhs
Immediate Payment Service (IMPS) of National Payments Corporation of India (NPCI) is an important payment system providing 24x7 instant domestic funds transfer facility and is accessible through various channels like internet banking, mobile banking apps, bank branches, ATMs, SMS and IVRS. The per-transaction limit in IMPS, effective from January 2014, is currently capped at ₹2 lakh for channels other than SMS and IVRS. The per-transaction limit for SMS and IVRS channels is ₹5000. With RTGS now operational round the clock, there has been a corresponding increase in settlement cycles of IMPS, thereby reducing the credit and settlement risks. In view of the importance of the IMPS system in processing of domestic payment transactions, RBI has proposed to increase the per-transaction limit from ₹2 lakh to ₹5 lakh for channels other than SMS and IVRS. This will lead to further increase in digital payments and will provide an additional facility to customers for making digital payments beyond ₹2 lakh. Necessary instructions in this regard would be issued separately.
We may wait for the announcement of effective date for the change .
To read Press Release of RBI in this regard , CLICK HERE
Dated 08.10.2021 : Today Reserve Bank of India ( RBI ) announced that per-transaction limit for IMPS transactions will be enhanced from present Rs 2 lakhs to Rs 5.00 lakhs
Immediate Payment Service (IMPS) of National Payments Corporation of India (NPCI) is an important payment system providing 24x7 instant domestic funds transfer facility and is accessible through various channels like internet banking, mobile banking apps, bank branches, ATMs, SMS and IVRS. The per-transaction limit in IMPS, effective from January 2014, is currently capped at ₹2 lakh for channels other than SMS and IVRS. The per-transaction limit for SMS and IVRS channels is ₹5000. With RTGS now operational round the clock, there has been a corresponding increase in settlement cycles of IMPS, thereby reducing the credit and settlement risks. In view of the importance of the IMPS system in processing of domestic payment transactions, RBI has proposed to increase the per-transaction limit from ₹2 lakh to ₹5 lakh for channels other than SMS and IVRS. This will lead to further increase in digital payments and will provide an additional facility to customers for making digital payments beyond ₹2 lakh. Necessary instructions in this regard would be issued separately.
We may wait for the announcement of effective date for the change .
To read Press Release of RBI in this regard , CLICK HERE
AUTO DEBIT FACILITY REQUIRES ADDITIONAL AUTHENTICATION FROM TODAY
Dated 01.10.2021 : If you have given auto debit authorization towards your monthly bills for utilities , phones , mobiles or TV subscription or any other service and the bill amount exceeds Rs 5,000 to your bank or credit card company or your UPI account , the concerned payers have to seek your confirmation for such payments . The concerned payer may send you an OTP to your mobile for your confirmation . Only on your authentication , the paying companies or banks will effect the payments to the billers from tomorrow . Hence your authorization will not be automatic without your additional consent .
The instruction to this effect was given by Reserve Bank of India way back in August 2019 and initial cut off amount proposed was just Rs 2,000 . Subsequently RBI raised the cut off amount to Rs 5,000 in December 2020 . The implementation of the rule has earlier been postponed many times and it is being implemented from tomorrow finally . The rule applies to all types of instruments whether credit cards , debit cards , pre-paid cards or UPI . The following procedure is to be performed for regisreing and operation of auto debit facilities :
1. A cardholder desirous of opting for e-mandate facility on card shall undertake a one-time registration process which may involve confirmation of mandate through OTP .
2. During the registration process, the cardholder shall be given an option to provide the e-mandate for either a pre-specified fixed value of recurring transaction or for a variable value of the recurring transaction; in the case of the latter, the cardholder shall clearly specify the maximum value of recurring transactions, subject to the overall cap of ₹ 5,000/- per transaction. Registration shall be completed only after all requisite information is obtained by the issuer, including the validity period of the e-mandate .
3. The card issuer will send a pre-transaction notification to the cardholder, at least 24 hours prior to the actual charge / debit to the card.
On receipt of the pre-transaction notification, the cardholder will have the option to decline the transaction . For transactions above Rs 5,000 , card issuer has to get confirmation for payment through an OTP before effecting payment .
4. The issuer will send a post-transaction alert / notification to the cardholder , informing him / her full details of the transaction .
5. Card holders will get on-line facility , in case they want to withdraw the mandate given to any biller .
Dated 01.10.2021 : If you have given auto debit authorization towards your monthly bills for utilities , phones , mobiles or TV subscription or any other service and the bill amount exceeds Rs 5,000 to your bank or credit card company or your UPI account , the concerned payers have to seek your confirmation for such payments . The concerned payer may send you an OTP to your mobile for your confirmation . Only on your authentication , the paying companies or banks will effect the payments to the billers from tomorrow . Hence your authorization will not be automatic without your additional consent .
The instruction to this effect was given by Reserve Bank of India way back in August 2019 and initial cut off amount proposed was just Rs 2,000 . Subsequently RBI raised the cut off amount to Rs 5,000 in December 2020 . The implementation of the rule has earlier been postponed many times and it is being implemented from tomorrow finally . The rule applies to all types of instruments whether credit cards , debit cards , pre-paid cards or UPI . The following procedure is to be performed for regisreing and operation of auto debit facilities :
1. A cardholder desirous of opting for e-mandate facility on card shall undertake a one-time registration process which may involve confirmation of mandate through OTP .
2. During the registration process, the cardholder shall be given an option to provide the e-mandate for either a pre-specified fixed value of recurring transaction or for a variable value of the recurring transaction; in the case of the latter, the cardholder shall clearly specify the maximum value of recurring transactions, subject to the overall cap of ₹ 5,000/- per transaction. Registration shall be completed only after all requisite information is obtained by the issuer, including the validity period of the e-mandate .
3. The card issuer will send a pre-transaction notification to the cardholder, at least 24 hours prior to the actual charge / debit to the card.
On receipt of the pre-transaction notification, the cardholder will have the option to decline the transaction . For transactions above Rs 5,000 , card issuer has to get confirmation for payment through an OTP before effecting payment .
4. The issuer will send a post-transaction alert / notification to the cardholder , informing him / her full details of the transaction .
5. Card holders will get on-line facility , in case they want to withdraw the mandate given to any biller .
INDIAN OVERSEAS BANK IS OUT OF PCA FRAMEWORK
Dated 30.09.2021 : Reserve Bank of India ( RBI ) yesterday announced through a press release , that it has been decided to take out Indian Overseas Bank from the PCA framework ( Prompt Corrective Action Framework ) , subject to certain conditions and continuous monitoring.
Matter was reviewed by the Board for Financial Supervision (BFS) in its meeting . It was noted that as per its published results for the year ended March 31, 2021, the bank is not in the breach of the PCA parameters. The bank has provided a written commitment that it would comply with the norms of Minimum Regulatory Capital, Net NPA and Leverage ratio on an ongoing basis and has apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments.
Now only Central Bank of India is under PCA Framework .
To read the press release of RBI , CLICK HERE
Dated 30.09.2021 : Reserve Bank of India ( RBI ) yesterday announced through a press release , that it has been decided to take out Indian Overseas Bank from the PCA framework ( Prompt Corrective Action Framework ) , subject to certain conditions and continuous monitoring.
Matter was reviewed by the Board for Financial Supervision (BFS) in its meeting . It was noted that as per its published results for the year ended March 31, 2021, the bank is not in the breach of the PCA parameters. The bank has provided a written commitment that it would comply with the norms of Minimum Regulatory Capital, Net NPA and Leverage ratio on an ongoing basis and has apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments.
Now only Central Bank of India is under PCA Framework .
To read the press release of RBI , CLICK HERE
UCO BANK IS OUT OF PCA FRAMEWORK
Dated 09.09.2021 : Reserve Bank of India ( RBI ) yesterday announced through a press release , that it has been decided to take out UCO Bank from the PCA framework ( Prompt Corrective Action Framework ) , subject to certain conditions and continuous monitoring.
Matter was reviewed by the Board for Financial Supervision (BFS) in its meeting and it was noted that as per published results for the year ended March 31, 2021 the bank is not in breach of the PCA parameters on regulatory capital, Net NPA and Leverage ratio. The bank has also provided a written commitment to RBI that it would comply with the norms of minimum regulatory capital, Net NPA and Leverage ratio on an ongoing basis . UCO Bank has also apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments.
Presently Indian Overseas Bank and Central Bank of India are still under PCA Framework .
To read the press release of RBI , CLICK HERE
Dated 09.09.2021 : Reserve Bank of India ( RBI ) yesterday announced through a press release , that it has been decided to take out UCO Bank from the PCA framework ( Prompt Corrective Action Framework ) , subject to certain conditions and continuous monitoring.
Matter was reviewed by the Board for Financial Supervision (BFS) in its meeting and it was noted that as per published results for the year ended March 31, 2021 the bank is not in breach of the PCA parameters on regulatory capital, Net NPA and Leverage ratio. The bank has also provided a written commitment to RBI that it would comply with the norms of minimum regulatory capital, Net NPA and Leverage ratio on an ongoing basis . UCO Bank has also apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments.
Presently Indian Overseas Bank and Central Bank of India are still under PCA Framework .
To read the press release of RBI , CLICK HERE
RBI RECEIVES APPLICATIONS FOR OPENING NEW PRIVATE BANKS :
Dated 02.09.2021 : Reserve Bank of India has received applications under the Guidelines for ‘on tap’ Licensing of Universal Banks in Private sector dated August 1, 2016 from the following applicants –
(ii) Entities/groups in the private sector that are ‘owned and controlled by residents’ [as defined in FEMA Regulations, as amended from time to time] and have a successful track record for at least 10 years, provided that if such entity/group has total assets of ₹ 50 billion or more, the non-financial business of the group does not account for 40 per cent or more in terms of total assets/in terms of gross income.
(iii) Existing non-banking financial companies (NBFCs) that are ‘controlled by residents’ and have a successful track record for at least 10 years. For the sake of clarity, it is added here that any NBFC, which is a part of the group that has total assets of ₹ 50 billion or more and that the non-financial business of the group accounts for 40 per cent or more in terms of total assets/in terms of gross income, is not eligible.
We have to wait and see who will get the Licence from RBI .
Dated 02.09.2021 : Reserve Bank of India has received applications under the Guidelines for ‘on tap’ Licensing of Universal Banks in Private sector dated August 1, 2016 from the following applicants –
- UAE Exchange and Financial Services Limited
- The Repatriates Cooperative Finance and Development Bank Limited (REPCO Bank)
- Chaitanya India Fin Credit Private Limited
- Shri Pankaj Vaish and others
- The licensing window will be open on-tap, and the applications in the prescribed form along with requisite information could be submitted to the Reserve Bank at any point of time.
- The applications will be referred to a Standing External Advisory Committee (SEAC) to be set up by the Reserve Bank.
- The Committee will submit its recommendations to the Reserve Bank for consideration. The Internal Screening Committee (ISC), consisting of the Governor and the Deputy Governors, will examine all the applications and then submit its recommendations to the Committee of the Central Board of the Reserve Bank for the final decision to issue in-principle approval.
- The validity of the in-principle approval issued by the Reserve Bank will be 18 months from the date of granting in-principle approval and would thereafter lapse automatically.
- Applicants aggrieved by the decision of the Committee of the Central Board can prefer an appeal against the decision to the Central Board of Directors, within one month from the date of receipt of communication from the Reserve Bank relating to the application not being considered.
- In order to ensure transparency, the names of the applicants for bank licences and the names of applicants that are found suitable for grant of in-principle approval will be placed on the Reserve Bank’s website periodically.
- Who can apply for Bank Licence ?
(i) Individuals/professionals who are ‘residents’ and have 10 years of experience in banking and finance at a senior level.
(ii) Entities/groups in the private sector that are ‘owned and controlled by residents’ [as defined in FEMA Regulations, as amended from time to time] and have a successful track record for at least 10 years, provided that if such entity/group has total assets of ₹ 50 billion or more, the non-financial business of the group does not account for 40 per cent or more in terms of total assets/in terms of gross income.
(iii) Existing non-banking financial companies (NBFCs) that are ‘controlled by residents’ and have a successful track record for at least 10 years. For the sake of clarity, it is added here that any NBFC, which is a part of the group that has total assets of ₹ 50 billion or more and that the non-financial business of the group accounts for 40 per cent or more in terms of total assets/in terms of gross income, is not eligible.
- NOTE : Large industrial houses are excluded as eligible entities but are permitted to invest in the banks up to 10 per cent
- Minimum Capital required : The minimum paid-up voting equity capital for small finance banks shall be Rs.500 crore,
(ii) Entities/groups in the private sector that are ‘owned and controlled by residents’ [as defined in FEMA Regulations, as amended from time to time] and have a successful track record for at least 10 years, provided that if such entity/group has total assets of ₹ 50 billion or more, the non-financial business of the group does not account for 40 per cent or more in terms of total assets/in terms of gross income.
(iii) Existing non-banking financial companies (NBFCs) that are ‘controlled by residents’ and have a successful track record for at least 10 years. For the sake of clarity, it is added here that any NBFC, which is a part of the group that has total assets of ₹ 50 billion or more and that the non-financial business of the group accounts for 40 per cent or more in terms of total assets/in terms of gross income, is not eligible.
We have to wait and see who will get the Licence from RBI .
BANKS HAVE TO PAY PENALTY FOR NON-MAINTENENCE OF CASH IN ATMS :
Dated 13.08.2021 : As per RBI Notification dated 10.08.2021 , banks have to make arrangements for availability of cash in their ATMs continuously . If they fail to maintain cash in ATMS , they have to pay penalty to RBI from 01.10.2021 . The details of penalty scheme of RBI is as follows :
When the customer is not able to withdraw cash due to non-availability of cash in a particular ATM and Cash-out at any ATM of more than ten hours in a month will attract a flat penalty of ₹ 10,000/- per ATM. In case of White Label ATMs (WLAs), the penalty would be charged to the bank which is meeting the cash requirement of that particular WLA. The bank, may, at its discretion, recover the penalty from the WLA operator.
Banks shall submit system generated statement to RBI on downtime of ATMs due to non- replenishment of cash to the Issue Department of RBI under whose jurisdiction these ATMs are located. In case of WLAOs, the banks which are meeting their cash requirement shall furnish a separate statement on behalf of WLAOs on cash-out of such ATMs due to non-replenishment of cash. Such statements shall be submitted for every month within five days of the following month i.e., first such statement for the month of October 2021 shall be submitted on or before November 05, 2021 to the Issue Department concerned.
To read the RBI Notification , CLICK HERE
Dated 13.08.2021 : As per RBI Notification dated 10.08.2021 , banks have to make arrangements for availability of cash in their ATMs continuously . If they fail to maintain cash in ATMS , they have to pay penalty to RBI from 01.10.2021 . The details of penalty scheme of RBI is as follows :
When the customer is not able to withdraw cash due to non-availability of cash in a particular ATM and Cash-out at any ATM of more than ten hours in a month will attract a flat penalty of ₹ 10,000/- per ATM. In case of White Label ATMs (WLAs), the penalty would be charged to the bank which is meeting the cash requirement of that particular WLA. The bank, may, at its discretion, recover the penalty from the WLA operator.
Banks shall submit system generated statement to RBI on downtime of ATMs due to non- replenishment of cash to the Issue Department of RBI under whose jurisdiction these ATMs are located. In case of WLAOs, the banks which are meeting their cash requirement shall furnish a separate statement on behalf of WLAOs on cash-out of such ATMs due to non-replenishment of cash. Such statements shall be submitted for every month within five days of the following month i.e., first such statement for the month of October 2021 shall be submitted on or before November 05, 2021 to the Issue Department concerned.
To read the RBI Notification , CLICK HERE
BANK DEPOSITORS TO BE PAID DICGC INSURANCE IN 90 DAYS : CABINET DECISION
Customers of PMC and other banks in Moratorium are to be benefited
Dated 29.07.2021 : Last year Government had increased the coverage of Deposit insurance to the bank customers from Rs 1.00 lakh to Rs 5.00 lakhs . Yesterday Cabinet headed by Sri Narendra Modi , the Prime Minister has approved an amendment bill and the bill calls for resolution of entire process of insurance claim from DICGC within 90 days from the date which mortarium is declared by RBI .
The government expects that DICGC would need 45 days to collect information of the depositors and deposits of the bank in distress and another 45 days to verify the data and settle the claim .
The insurance covers all types of deposits including Fixed Deposits , Recurring Deposits , Savings Banks and Current accounts with interest accrued all banks including commercial banks , co-operative banks and Rural Banks for a maximum of Rs 5.00 lakhs per customer per bank . Banks have to pay a higher premium of Rs 0.12 per Rs 100 from Rs.10 per Rs 100 . However as premium is to be paid by the banks , customers need not worry .
Once the bill is presented and passed in the parliament , the amendment will help all such depositors with banks that are presently under mortarium and they may get their insurance cover early . Presently there are many co-operative banks including multistate PMC Bank which are under moratorium and they can hope for the early resolution .
Customers of PMC and other banks in Moratorium are to be benefited
Dated 29.07.2021 : Last year Government had increased the coverage of Deposit insurance to the bank customers from Rs 1.00 lakh to Rs 5.00 lakhs . Yesterday Cabinet headed by Sri Narendra Modi , the Prime Minister has approved an amendment bill and the bill calls for resolution of entire process of insurance claim from DICGC within 90 days from the date which mortarium is declared by RBI .
The government expects that DICGC would need 45 days to collect information of the depositors and deposits of the bank in distress and another 45 days to verify the data and settle the claim .
The insurance covers all types of deposits including Fixed Deposits , Recurring Deposits , Savings Banks and Current accounts with interest accrued all banks including commercial banks , co-operative banks and Rural Banks for a maximum of Rs 5.00 lakhs per customer per bank . Banks have to pay a higher premium of Rs 0.12 per Rs 100 from Rs.10 per Rs 100 . However as premium is to be paid by the banks , customers need not worry .
Once the bill is presented and passed in the parliament , the amendment will help all such depositors with banks that are presently under mortarium and they may get their insurance cover early . Presently there are many co-operative banks including multistate PMC Bank which are under moratorium and they can hope for the early resolution .
LIBOR TO EXTINGUISH : BANKS HAVE TO ADOPT ARR
Dated 09.07.2021 : The Financial Conduct Authority (FCA), UK has announced on March 05, 2021 that LIBOR ( London Interbank Offered Rate ) will either cease to be provided by any administrator or no longer be a representative rate as per schedule below :
(a) Immediately after December 31, 2021, in the case of all Pound sterling, Euro, Swiss franc and Japanese yen settings, and the 1-week and 2-month US dollar settings; and
(b) Immediately after June 30, 2023, in the case of the remaining US dollar settings.
Hence Reserve Bank of India ( RBI ) has asked Indian banks to be prepared for the transition from LIBOR to any other benchmark rate and to use any widely accepted ARR, as soon as practicable and in any case by December 31, 2021. While certain US dollar LIBOR settings will continue to be published till June 30, 2023, the extension of the timeline for cessation is primarily aimed at ensuring roll-off of USD LIBOR-linked legacy contracts, and not to encourage continued reliance on LIBOR.
RBI has also asked banks cease using the Mumbai Interbank Forward Outright Rate (MIFOR), published by the Financial Benchmarks India Pvt Ltd (FBIL), which references the LIBOR as soon as practicable and in any event by December 31, 2021. FBIL has started publishing daily adjusted MIFOR rates from June 15, 2021 and modified MIFOR rates from June 30, 2021 which can be used for legacy contracts and fresh contracts respectively. Banks may trade in MIFOR after December 31, 2021 only for certain specific purposes such as transactions executed to support risk management activities such as hedging, required participation in central counterparty procedures (including transactions for hedging the consequent MIFOR exposure), market-making in support of client activities or novation of MIFOR transactions in respect of transactions executed on or before December 31, 2021.
Further RBI has asked Banks/financial institutions to incorporate robust fallback clauses, preferably well before the respective cessation dates, in all financial contracts that reference LIBOR and the maturity of which is after the announced cessation date of the respective LIBOR settings. Banks/financial institutions are encouraged to ensure that new contracts entered into before December 31, 2021 that reference LIBOR and maturity of which is after the date on which LIBOR ceases or become non-representative include fallback clauses. Banks/financial institutions may refer to the standard fallback clauses developed for this purpose by various agencies such as International Swaps and Derivatives Association, Indian Banks’ Association, Loan Markets’ Association, Asia Pacific Loan Markets Association and Bankers Association for Finance & Trade.
Now onward banks have to fallback on ARR ( Alternative Reference rate ) instead of LIBOR
To read RBI press release on the subject , CLICK HERE
Dated 09.07.2021 : The Financial Conduct Authority (FCA), UK has announced on March 05, 2021 that LIBOR ( London Interbank Offered Rate ) will either cease to be provided by any administrator or no longer be a representative rate as per schedule below :
(a) Immediately after December 31, 2021, in the case of all Pound sterling, Euro, Swiss franc and Japanese yen settings, and the 1-week and 2-month US dollar settings; and
(b) Immediately after June 30, 2023, in the case of the remaining US dollar settings.
Hence Reserve Bank of India ( RBI ) has asked Indian banks to be prepared for the transition from LIBOR to any other benchmark rate and to use any widely accepted ARR, as soon as practicable and in any case by December 31, 2021. While certain US dollar LIBOR settings will continue to be published till June 30, 2023, the extension of the timeline for cessation is primarily aimed at ensuring roll-off of USD LIBOR-linked legacy contracts, and not to encourage continued reliance on LIBOR.
RBI has also asked banks cease using the Mumbai Interbank Forward Outright Rate (MIFOR), published by the Financial Benchmarks India Pvt Ltd (FBIL), which references the LIBOR as soon as practicable and in any event by December 31, 2021. FBIL has started publishing daily adjusted MIFOR rates from June 15, 2021 and modified MIFOR rates from June 30, 2021 which can be used for legacy contracts and fresh contracts respectively. Banks may trade in MIFOR after December 31, 2021 only for certain specific purposes such as transactions executed to support risk management activities such as hedging, required participation in central counterparty procedures (including transactions for hedging the consequent MIFOR exposure), market-making in support of client activities or novation of MIFOR transactions in respect of transactions executed on or before December 31, 2021.
Further RBI has asked Banks/financial institutions to incorporate robust fallback clauses, preferably well before the respective cessation dates, in all financial contracts that reference LIBOR and the maturity of which is after the announced cessation date of the respective LIBOR settings. Banks/financial institutions are encouraged to ensure that new contracts entered into before December 31, 2021 that reference LIBOR and maturity of which is after the date on which LIBOR ceases or become non-representative include fallback clauses. Banks/financial institutions may refer to the standard fallback clauses developed for this purpose by various agencies such as International Swaps and Derivatives Association, Indian Banks’ Association, Loan Markets’ Association, Asia Pacific Loan Markets Association and Bankers Association for Finance & Trade.
Now onward banks have to fallback on ARR ( Alternative Reference rate ) instead of LIBOR
To read RBI press release on the subject , CLICK HERE
WHAT IS ARR ( ALTERNATIVE REFERENCE RATE ) ?
As LIBOR will no longer continue to be a reference rate for financial contracts in coming days , various other alternative reference rates are being thought of to replace LIBOR in the future .
In this direction , Federal Reserve of US has formed an Alternative Reference Rate Committee ( ARRC ) with private- market participants as members to help USD contracts for transition away from LIBOR . The ARRC’s initial objectives were to identify risk-free alternative reference rates for USD LIBOR, identify best practices for contract robustness, and create an implementation plan with metrics of success and a timeline to support an orderly adoption . The ARRC accomplished its first set of objectives, and in 2017, identified Secured Overnight Financing Rate (SOFR ) as the rate that represents best practice for use in certain new USD derivatives and other financial contracts.
SOFR will be based on treasury transactions . SOFR will not based on expert judgement like LIBOR but on actual transactions. SOFR will be based on actual transaction data provided by BNYM (Bank of New York Melon). However we have yet to see how markets will adopt or accept SOFR .
In similar way as ARRC , other governments , governing bodies have identified a need for reforming major interest rate benchmarks, and committees similar to the ARRC have been formed in the other currencies for which LIBOR is quoted. Some of the suggested ARRs in other currency markets are SONIA (Sterling Overnight Interbank Average Rate, UK), TONAR (Tokyo Overnight Average Rate, Japan), SARON (Swiss Average Rate Overnight, Switzerland). However USD being the major currency wherein international financial contracts are drawn , SOFR rate appears to have a larger acceptance in the banking community.
We have to wait how ARRs develop in coming days .
In this direction , Federal Reserve of US has formed an Alternative Reference Rate Committee ( ARRC ) with private- market participants as members to help USD contracts for transition away from LIBOR . The ARRC’s initial objectives were to identify risk-free alternative reference rates for USD LIBOR, identify best practices for contract robustness, and create an implementation plan with metrics of success and a timeline to support an orderly adoption . The ARRC accomplished its first set of objectives, and in 2017, identified Secured Overnight Financing Rate (SOFR ) as the rate that represents best practice for use in certain new USD derivatives and other financial contracts.
SOFR will be based on treasury transactions . SOFR will not based on expert judgement like LIBOR but on actual transactions. SOFR will be based on actual transaction data provided by BNYM (Bank of New York Melon). However we have yet to see how markets will adopt or accept SOFR .
In similar way as ARRC , other governments , governing bodies have identified a need for reforming major interest rate benchmarks, and committees similar to the ARRC have been formed in the other currencies for which LIBOR is quoted. Some of the suggested ARRs in other currency markets are SONIA (Sterling Overnight Interbank Average Rate, UK), TONAR (Tokyo Overnight Average Rate, Japan), SARON (Swiss Average Rate Overnight, Switzerland). However USD being the major currency wherein international financial contracts are drawn , SOFR rate appears to have a larger acceptance in the banking community.
We have to wait how ARRs develop in coming days .
RBI TWEAKS RULES ON OVERDUE DEPOSITS :
Dated 03.07.2021 : Reserve Bank of India ( RBI ) has issued a notification tweaking the existing rules on payment of interest to matured term deposits for the resident Indians .
Hitherto banks were expected to pay a rate of interest as applicable to savings deposits for a Term Deposit matured and proceeds unpaid . Now as per new rules , banks have to pay savings bank rate or contracted rate for the term deposit matured , whichever is lower .
The new rule is also applicable for co-operative banks .
For RBI Notification on the subject , CLICK HERE
Dated 03.07.2021 : Reserve Bank of India ( RBI ) has issued a notification tweaking the existing rules on payment of interest to matured term deposits for the resident Indians .
Hitherto banks were expected to pay a rate of interest as applicable to savings deposits for a Term Deposit matured and proceeds unpaid . Now as per new rules , banks have to pay savings bank rate or contracted rate for the term deposit matured , whichever is lower .
The new rule is also applicable for co-operative banks .
For RBI Notification on the subject , CLICK HERE
PAY MORE FOR ATM TRANSACTIONS :
Dated 11.06.2021 : Reserve Bank of India ( RBI ) has decided to allow increase in interchange fee per ATM transaction from ₹15 to ₹17 for financial transactions and from ₹5 to ₹6 for non-financial ATM transactions in all centres effective from August 1, 2021.
Presently customers of the banks are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs. They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs viz. three transactions in metro centres and five transactions in non-metro centres. Beyond the free transactions, banks can now charge a maximum fee of ₹20 per transaction . Now to compensate the banks for the higher interchange fee and given the general escalation in costs, RBI has allowed the banks to increase the customer charges to ₹21 per transaction. This increase shall be effective from January 1, 2022.
Dated 11.06.2021 : Reserve Bank of India ( RBI ) has decided to allow increase in interchange fee per ATM transaction from ₹15 to ₹17 for financial transactions and from ₹5 to ₹6 for non-financial ATM transactions in all centres effective from August 1, 2021.
Presently customers of the banks are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs. They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs viz. three transactions in metro centres and five transactions in non-metro centres. Beyond the free transactions, banks can now charge a maximum fee of ₹20 per transaction . Now to compensate the banks for the higher interchange fee and given the general escalation in costs, RBI has allowed the banks to increase the customer charges to ₹21 per transaction. This increase shall be effective from January 1, 2022.
YOUR SALARY CAN BE CREDITED TO YOUR ACCOUNT ON ALL DAYS :
Dated 05.06.2021 :
From August 1st , 2021 , Your salary or pension can be credited to your account on any day including Sundays and holidays . Reserve bank will make available bulk payment system operated by NPCI called NACH on all days of the week through out the year . It is being used for credit of salary , dividend and such other bulk payments .
NACH payment system facilitates one-to-many credit transfers, such as payment of dividend, interest, salary, pension, as also collection of payments pertaining to electricity, gas, telephone, water, periodic instalments towards loans, investments in mutual funds, insurance premium, etc. It is a popular and prominent digital mode of direct benefit transfer (DBT) to large number of beneficiaries.
It also has helped transfer of government subsidies during the present COVID-19 in a timely and transparent manner. Presently it is available only on the days when banks are functional. In the interest of customer convenience, and to take advantage of the availability of RTGS on all days of the year, RBI has proposed to make available NACH on all days of the week throughout the year, effective August 1, 2021.
To read the RBI press release , CLICK HERE
Dated 05.06.2021 :
From August 1st , 2021 , Your salary or pension can be credited to your account on any day including Sundays and holidays . Reserve bank will make available bulk payment system operated by NPCI called NACH on all days of the week through out the year . It is being used for credit of salary , dividend and such other bulk payments .
NACH payment system facilitates one-to-many credit transfers, such as payment of dividend, interest, salary, pension, as also collection of payments pertaining to electricity, gas, telephone, water, periodic instalments towards loans, investments in mutual funds, insurance premium, etc. It is a popular and prominent digital mode of direct benefit transfer (DBT) to large number of beneficiaries.
It also has helped transfer of government subsidies during the present COVID-19 in a timely and transparent manner. Presently it is available only on the days when banks are functional. In the interest of customer convenience, and to take advantage of the availability of RTGS on all days of the year, RBI has proposed to make available NACH on all days of the week throughout the year, effective August 1, 2021.
To read the RBI press release , CLICK HERE
BANKS TO LIMIT BUSINESS HOURS AND CURTAIL BUSINESS TO CORE BANKING :
Dated 23.04.2021 : It's reported that Indian Banks Association ( IBA ) has advised State Level bankers Committees ( SLBC ) of various statesand Union Territories ( UTs ) to offer the following mandatory services in all the branches , in view of present situation of 2nd wave of Covid 19 .
1. Cash Deposits & withdrawals
2. Clearing of cheques
3. Remittances
4. Government transactions
However SLBCs can consider offering of any other services depending up on the local conditions . Further it has advised banks to curtail business hours between 10.00 am to 2.00 pm and to follow all covid protocols in the premises of the banks . It's reported that it has advised SLBC to consider 50 % of working staff to be present at a time in the branch premises .It said banks may call employees on a rotational basis or allow them to work from home as the case may be, depending on the nature of job, staff position and size of the establishment. However SLBCs have been asked to adhere to instructions issued by the local authorities . IBA has also advised the banks to take necessary steps to protect the staff from the pandemic including arranging vaccine at bank premises and arranging help to the individual staff in case of him / her contacting the pandemic .
In view of the above advisory offered by the bankers body , it's now for individual state level bankers committees to decide up on the course of action to protect the staff within the instructions issued by the state governments . SLBCs are expected to issue guidelines to all bank branches operating in the area of the jurisdiction .
In view of the health risks bank customers may face , they are advised to avoid personal visit of bank branches as far as posible and conduct on-line transactions . Customers may utilize on-line services and Mobile APPS and save themselves from personal visits and safeguard themselves . Customers can also utilize Doorstep Banking Services offered by many banks .
Dated 23.04.2021 : It's reported that Indian Banks Association ( IBA ) has advised State Level bankers Committees ( SLBC ) of various statesand Union Territories ( UTs ) to offer the following mandatory services in all the branches , in view of present situation of 2nd wave of Covid 19 .
1. Cash Deposits & withdrawals
2. Clearing of cheques
3. Remittances
4. Government transactions
However SLBCs can consider offering of any other services depending up on the local conditions . Further it has advised banks to curtail business hours between 10.00 am to 2.00 pm and to follow all covid protocols in the premises of the banks . It's reported that it has advised SLBC to consider 50 % of working staff to be present at a time in the branch premises .It said banks may call employees on a rotational basis or allow them to work from home as the case may be, depending on the nature of job, staff position and size of the establishment. However SLBCs have been asked to adhere to instructions issued by the local authorities . IBA has also advised the banks to take necessary steps to protect the staff from the pandemic including arranging vaccine at bank premises and arranging help to the individual staff in case of him / her contacting the pandemic .
In view of the above advisory offered by the bankers body , it's now for individual state level bankers committees to decide up on the course of action to protect the staff within the instructions issued by the state governments . SLBCs are expected to issue guidelines to all bank branches operating in the area of the jurisdiction .
In view of the health risks bank customers may face , they are advised to avoid personal visit of bank branches as far as posible and conduct on-line transactions . Customers may utilize on-line services and Mobile APPS and save themselves from personal visits and safeguard themselves . Customers can also utilize Doorstep Banking Services offered by many banks .
CITI BANK TO EXIT INDIAN RETAIL BUSINESS :
Dated 15.04.2021 : Citi bank , headquartered in New York USA , is planning to exit from the retail business in India , as well as in another 12 countries , as per announcement made today in New York . The other markets that are to be shut are Australia, Bahrain, China, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam. However the bank will continue to offer services to institutional clients group, which houses the private bank, cash-management arm and investment-banking and trading businesses.
The reason for exit is said to be lack of scale of operations in the retail segments in these countries .
Citibank India has a history of more than 100 years in India . It was established in 1902 in Calcutta (Kolkata ). Currently, Citigroup, the owner of Citi India, is one of the largest foreign direct investors in financial services in the country. Citi bank has taken initiatives to bring to India many new products and services such as the ATM, credit card, 24-hour phone banking, internet banking, and instant SMS alerts. Citi bank is presently has branches in more than 12 cities and prominent foreign bank serving India .
Sources : Citibank announcement of date
Dated 15.04.2021 : Citi bank , headquartered in New York USA , is planning to exit from the retail business in India , as well as in another 12 countries , as per announcement made today in New York . The other markets that are to be shut are Australia, Bahrain, China, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam. However the bank will continue to offer services to institutional clients group, which houses the private bank, cash-management arm and investment-banking and trading businesses.
The reason for exit is said to be lack of scale of operations in the retail segments in these countries .
Citibank India has a history of more than 100 years in India . It was established in 1902 in Calcutta (Kolkata ). Currently, Citigroup, the owner of Citi India, is one of the largest foreign direct investors in financial services in the country. Citi bank has taken initiatives to bring to India many new products and services such as the ATM, credit card, 24-hour phone banking, internet banking, and instant SMS alerts. Citi bank is presently has branches in more than 12 cities and prominent foreign bank serving India .
Sources : Citibank announcement of date
BANKS TO REFUND INTEREST ON INTEREST : Who will bear the cost ?
Dated 08.04.2021 : Reserve Bank of India has asked all banks to immediately put in place a Board-approved policy to refund/adjust the ‘interest on interest’ charged to the borrowers during the moratorium period, i.e. March 1, 2020 to August 31, 2020 .
Further RBI has asked Indian Banks Association (IBA) to suitably prepare methodology for calculation of the amount to be refunded/adjusted for different facilities in consultation with other industry participants/bodies, which shall be adopted by all lending institutions.
The instruction for refunding will be applicable to all borrowers, including those who had availed of working capital facilities during the moratorium period, irrespective of whether moratorium had been fully or partially availed, or not availed .
The RBI instructions have come in the wake of Supreme Court's judgement in the matter of Small Scale Industrial Manufacturers Association vs UOI & Ors. and other connected matters on March 23, 2021.
Government of India has announced a Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020) . State Bank of India is designated as nodal agency for implementing the scheme . Details of the scheme are as follows :
In this regard we may remember here that the following categories of borrowers , who had limits of less than Rs 2 crores have already been reimbursed through a Government scheme announced in October 2020.
a. MSME Loans
b. Education loans
c . Housing Loans
d. Consumer durable loans
e. Credit card dues
f. Automobile loans
g. Personal loans to professionals
h. Consumption loans
The government scheme reimbursed the banks for the refunds effected earlier . However present RBI notification is silent on any relief from the government and hence banks themselves may have to bear the burden of refund .
To go through RBI Notification dated 07.04.2021 in this regard , CLICK HERE
Dated 08.04.2021 : Reserve Bank of India has asked all banks to immediately put in place a Board-approved policy to refund/adjust the ‘interest on interest’ charged to the borrowers during the moratorium period, i.e. March 1, 2020 to August 31, 2020 .
Further RBI has asked Indian Banks Association (IBA) to suitably prepare methodology for calculation of the amount to be refunded/adjusted for different facilities in consultation with other industry participants/bodies, which shall be adopted by all lending institutions.
The instruction for refunding will be applicable to all borrowers, including those who had availed of working capital facilities during the moratorium period, irrespective of whether moratorium had been fully or partially availed, or not availed .
The RBI instructions have come in the wake of Supreme Court's judgement in the matter of Small Scale Industrial Manufacturers Association vs UOI & Ors. and other connected matters on March 23, 2021.
Government of India has announced a Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020) . State Bank of India is designated as nodal agency for implementing the scheme . Details of the scheme are as follows :
In this regard we may remember here that the following categories of borrowers , who had limits of less than Rs 2 crores have already been reimbursed through a Government scheme announced in October 2020.
a. MSME Loans
b. Education loans
c . Housing Loans
d. Consumer durable loans
e. Credit card dues
f. Automobile loans
g. Personal loans to professionals
h. Consumption loans
The government scheme reimbursed the banks for the refunds effected earlier . However present RBI notification is silent on any relief from the government and hence banks themselves may have to bear the burden of refund .
To go through RBI Notification dated 07.04.2021 in this regard , CLICK HERE
NOW RTGS & NEFT MEMBERSHIP IS WIDENED :
Dated 07.04.2021 : So far only banks and few financial institutions are the members of Centralised Payment System run by RBI which operates both NEFT & RTGS platforms . Now RBI has decided to extend the membership to other non-bank entities in payment space like Prepaid Payment Instrument (PPI) issuers, Card Networks, White Label ATM (WLA) operators, Trade Receivables and Discounting System (TReDS) platforms . However these institutions will not be eligible for liquidity support from the central bank .
RBI is expected to issue notification in this regard shortly .
To read RBI announcement in this regard , CLICK HERE
Dated 07.04.2021 : So far only banks and few financial institutions are the members of Centralised Payment System run by RBI which operates both NEFT & RTGS platforms . Now RBI has decided to extend the membership to other non-bank entities in payment space like Prepaid Payment Instrument (PPI) issuers, Card Networks, White Label ATM (WLA) operators, Trade Receivables and Discounting System (TReDS) platforms . However these institutions will not be eligible for liquidity support from the central bank .
RBI is expected to issue notification in this regard shortly .
To read RBI announcement in this regard , CLICK HERE
: AUTO DEBIT FACILITY REQUIRES ADDITIONAL AUTHENTICATION FROM TOMORROW
Breaking News : RBI has today extended the deadline by another six months up to 30.09.2021 .
To read the press release on this regard , CLICK HERE
Dated 31.03.2021 : If you have given auto debit authorization towards your monthly bills for utilities , phones , mobiles or TV subscription or any other service and the bill amount exceeds Rs 5,000 to your bank or credit card company or your UPI account , the concerned payers have to seek your confirmation for such payments . The concerned payer may send you an OTP to your mobile for your confirmation . Only on your authentication , the paying companies or banks will effect the payments to the billers from tomorrow . Hence your authorization will not be automatic without your additional consent .
The instruction to this effect was given by Reserve Bank of India way back in August 2019 and initial cut off amount proposed was just Rs 2,000 . Subsequently RBI raised the cut off amount to Rs 5,000 in December 2020 . The implementation of the rule has earlier been postponed many times and it is being implemented from tomorrow finally . The rule applies to all types of instruments whether credit cards , debit cards , pre-paid cards or UPI . The following procedure is to be performed for regisreing and operation of auto debit facilities :
1. A cardholder desirous of opting for e-mandate facility on card shall undertake a one-time registration process which may involve confirmation of mandate through OTP .
2. During the registration process, the cardholder shall be given an option to provide the e-mandate for either a pre-specified fixed value of recurring transaction or for a variable value of the recurring transaction; in the case of the latter, the cardholder shall clearly specify the maximum value of recurring transactions, subject to the overall cap of ₹ 5,000/- per transaction. Registration shall be completed only after all requisite information is obtained by the issuer, including the validity period of the e-mandate .
3. The card issuer will send a pre-transaction notification to the cardholder, at least 24 hours prior to the actual charge / debit to the card.
On receipt of the pre-transaction notification, the cardholder will have the option to decline the transaction . For transactions above Rs 5,000 , card issuer has to get confirmation for payment through an OTP before effecting payment .
4. The issuer will send a post-transaction alert / notification to the cardholder , informing him / her full details of the transaction .
5. Card holders will get on-line facility , in case they want to withdraw the mandate given to any biller .
Breaking News : RBI has today extended the deadline by another six months up to 30.09.2021 .
To read the press release on this regard , CLICK HERE
Dated 31.03.2021 : If you have given auto debit authorization towards your monthly bills for utilities , phones , mobiles or TV subscription or any other service and the bill amount exceeds Rs 5,000 to your bank or credit card company or your UPI account , the concerned payers have to seek your confirmation for such payments . The concerned payer may send you an OTP to your mobile for your confirmation . Only on your authentication , the paying companies or banks will effect the payments to the billers from tomorrow . Hence your authorization will not be automatic without your additional consent .
The instruction to this effect was given by Reserve Bank of India way back in August 2019 and initial cut off amount proposed was just Rs 2,000 . Subsequently RBI raised the cut off amount to Rs 5,000 in December 2020 . The implementation of the rule has earlier been postponed many times and it is being implemented from tomorrow finally . The rule applies to all types of instruments whether credit cards , debit cards , pre-paid cards or UPI . The following procedure is to be performed for regisreing and operation of auto debit facilities :
1. A cardholder desirous of opting for e-mandate facility on card shall undertake a one-time registration process which may involve confirmation of mandate through OTP .
2. During the registration process, the cardholder shall be given an option to provide the e-mandate for either a pre-specified fixed value of recurring transaction or for a variable value of the recurring transaction; in the case of the latter, the cardholder shall clearly specify the maximum value of recurring transactions, subject to the overall cap of ₹ 5,000/- per transaction. Registration shall be completed only after all requisite information is obtained by the issuer, including the validity period of the e-mandate .
3. The card issuer will send a pre-transaction notification to the cardholder, at least 24 hours prior to the actual charge / debit to the card.
On receipt of the pre-transaction notification, the cardholder will have the option to decline the transaction . For transactions above Rs 5,000 , card issuer has to get confirmation for payment through an OTP before effecting payment .
4. The issuer will send a post-transaction alert / notification to the cardholder , informing him / her full details of the transaction .
5. Card holders will get on-line facility , in case they want to withdraw the mandate given to any biller .
CTS WILL BE AVAILABLE IN ALL BANK BRANCHES IN INDIA : RBI
Dated 16.03.2021 : Cheque Truncation System ( CTS) for the purpose of clearing , is in use since 2010 . Now around 1,50,000 bank branches are using the system . However, there are branches of banks that are outside formal clearing arrangement of CTS and their customers face hardships due to longer time taken and cost involved in collection of cheques presented by them. Most of such branches are said to be in remote rural India and the RBI move now will help the customers of such branches .
To leverage the availability of CTS and provide uniform customer experience irrespective of location of her/his bank branch, Reserve Bank of India ( RBI ) has decided to extend CTS across all bank branches in the country. To facilitate this, banks will have to ensure , as per RBI Notification dated 15.03.2021 , that all their branches participate in image-based CTS under respective grids by September 30, 2021. They are free to adopt a model of their choice, like deploying suitable infrastructure in every branch or following a hub & spoke model, etc. and concerned banks are asked to coordinate with the respective Regional Offices of RBI to operationalise the system .
What is Cheque Truncation System ( CTS ) ? : Cheque Transaction System (CTS) in India, is a cheque clearing system promoted by RBI, for faster clearing of cheques . In CTS system , cheque images and magnetic ink character recognition (MICR) data are captured at the collecting bank branch and transmitted electronically to the bank on which cheque is drawn . The physical cheques issued by a drawer to the drawee branch is processed at the collecting branch , the physical instrument is truncated and an electronic image of the cheque is sent to the drawee branch along with the relevant information like the MICR fields, date of presentation, presenting banks etc. This would eliminate the need to move the physical instruments across branches, except in exceptional circumstances, resulting in an effective reduction in the time required for payment of cheques, the associated cost of transit and delays in processing, etc. . This system thus speeds up the process of collection or realization of cheques.
To read the RBI notification dated 15.03.2021 in this regard , CLICK HERE
Dated 16.03.2021 : Cheque Truncation System ( CTS) for the purpose of clearing , is in use since 2010 . Now around 1,50,000 bank branches are using the system . However, there are branches of banks that are outside formal clearing arrangement of CTS and their customers face hardships due to longer time taken and cost involved in collection of cheques presented by them. Most of such branches are said to be in remote rural India and the RBI move now will help the customers of such branches .
To leverage the availability of CTS and provide uniform customer experience irrespective of location of her/his bank branch, Reserve Bank of India ( RBI ) has decided to extend CTS across all bank branches in the country. To facilitate this, banks will have to ensure , as per RBI Notification dated 15.03.2021 , that all their branches participate in image-based CTS under respective grids by September 30, 2021. They are free to adopt a model of their choice, like deploying suitable infrastructure in every branch or following a hub & spoke model, etc. and concerned banks are asked to coordinate with the respective Regional Offices of RBI to operationalise the system .
What is Cheque Truncation System ( CTS ) ? : Cheque Transaction System (CTS) in India, is a cheque clearing system promoted by RBI, for faster clearing of cheques . In CTS system , cheque images and magnetic ink character recognition (MICR) data are captured at the collecting bank branch and transmitted electronically to the bank on which cheque is drawn . The physical cheques issued by a drawer to the drawee branch is processed at the collecting branch , the physical instrument is truncated and an electronic image of the cheque is sent to the drawee branch along with the relevant information like the MICR fields, date of presentation, presenting banks etc. This would eliminate the need to move the physical instruments across branches, except in exceptional circumstances, resulting in an effective reduction in the time required for payment of cheques, the associated cost of transit and delays in processing, etc. . This system thus speeds up the process of collection or realization of cheques.
To read the RBI notification dated 15.03.2021 in this regard , CLICK HERE
BANKING SERVICES IN BANKS COME TO A HALT TODAY
15.03.2021 : United Forum of Bank Unions ( UFBU ) had announced, in February 2021 , of their agitation plan including strike call to their members against the privatization of public sector banks and other measures taken by the Central government . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . The unions had announced that bank staff would go ahead with their earlier announced strike call on 15th & 16th , March 2021 , as they do not see any positive response from the government .
Today the bank employees and officers of all public sector banks totaling around 10 lakh went on strike as per the call of their unions . Banking services such as cash withdrawals, deposits, cheque clearing and business transactions were impacted across the country today , the first day of the PSU bank union's strike, against the proposed privatisation of two of their banks . However private sector banks like ICICI Bank , Kotak bank & Axis bank offered their usual services today .
The strike will continue tomorrow also as per the schedule announced . The strike call of bank unions and their agitation programme against privatization has got wider support from other trade unions like Samyukta Kisan Morcha (SKM) and Central trade Unions (CTU) . They have extended their support and Will Observe Anti - Privatisation Day on 15th March.
After the bank employees strike today and tomorrow , employees of public sector general insurance companies will go on strike on 17th, March 2021 & Life Insurance corporation of India's employees on 18th, March 2021 .
We may recall here that Finance Minister Ms Nirmala Sitharaman had announced , in her budget speech , about various measures that would be taken with regard to government owned financial institutions including privatisation of two public sector banks , IDBI and one General insurance company . She had also announced taking up of shares sales of Life Insurance Corporation of India , another public sector undertaking . She had also announced setting up of a bad loan bank to take over NPAs of the public sector bank . However these moves have not gone well with the bank employees and their unions .
15.03.2021 : United Forum of Bank Unions ( UFBU ) had announced, in February 2021 , of their agitation plan including strike call to their members against the privatization of public sector banks and other measures taken by the Central government . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . The unions had announced that bank staff would go ahead with their earlier announced strike call on 15th & 16th , March 2021 , as they do not see any positive response from the government .
Today the bank employees and officers of all public sector banks totaling around 10 lakh went on strike as per the call of their unions . Banking services such as cash withdrawals, deposits, cheque clearing and business transactions were impacted across the country today , the first day of the PSU bank union's strike, against the proposed privatisation of two of their banks . However private sector banks like ICICI Bank , Kotak bank & Axis bank offered their usual services today .
The strike will continue tomorrow also as per the schedule announced . The strike call of bank unions and their agitation programme against privatization has got wider support from other trade unions like Samyukta Kisan Morcha (SKM) and Central trade Unions (CTU) . They have extended their support and Will Observe Anti - Privatisation Day on 15th March.
After the bank employees strike today and tomorrow , employees of public sector general insurance companies will go on strike on 17th, March 2021 & Life Insurance corporation of India's employees on 18th, March 2021 .
We may recall here that Finance Minister Ms Nirmala Sitharaman had announced , in her budget speech , about various measures that would be taken with regard to government owned financial institutions including privatisation of two public sector banks , IDBI and one General insurance company . She had also announced taking up of shares sales of Life Insurance Corporation of India , another public sector undertaking . She had also announced setting up of a bad loan bank to take over NPAs of the public sector bank . However these moves have not gone well with the bank employees and their unions .
TO KNOW BEST YIELDING FIXED DEPOSITS , CLICK HERE
IDBI BANK IS OUT OF PCA FRAMEWORK
Dated 10.03.2021 : Reserve Bank of India ( RBI ) toady announced through a press release , that it has been decided to take out IDBI Bank Limited be taken out of the PCA framework ( Prompt Corrective Action Framework ) , subject to certain conditions and continuous monitoring.
Matter was reviewed by the Board for Financial Supervision (BFS) in its meeting held on February 18, 2021 and it was noted that as per published results for the quarter ending December 31, 2020 the bank is not in breach of the PCA parameters on regulatory capital, Net NPA and Leverage ratio. The bank has also provided a written commitment to RBI that it would comply with the norms of minimum regulatory capital, Net NPA and Leverage ratio on an ongoing basis . IDBI Bank has also apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments.
Presently along with IDBI Bank , Indian Overseas Bank , Central Bank of India and UCO Bank are under PCA Framework .
To read the press release of RBI , CLICK HERE
Dated 10.03.2021 : Reserve Bank of India ( RBI ) toady announced through a press release , that it has been decided to take out IDBI Bank Limited be taken out of the PCA framework ( Prompt Corrective Action Framework ) , subject to certain conditions and continuous monitoring.
Matter was reviewed by the Board for Financial Supervision (BFS) in its meeting held on February 18, 2021 and it was noted that as per published results for the quarter ending December 31, 2020 the bank is not in breach of the PCA parameters on regulatory capital, Net NPA and Leverage ratio. The bank has also provided a written commitment to RBI that it would comply with the norms of minimum regulatory capital, Net NPA and Leverage ratio on an ongoing basis . IDBI Bank has also apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments.
Presently along with IDBI Bank , Indian Overseas Bank , Central Bank of India and UCO Bank are under PCA Framework .
To read the press release of RBI , CLICK HERE
PRIVATE BANKS CAN DO GOVERNMENT BANKING TRANSACTIONS NOW :
Dated 25.02.2021 : Government of India has removed embargo on private sectors banks in doing government related banking services like pension disbursement , tax collection or other government agency business . They can also conduct small savings business on behalf of the government .
Now Reserve Bank of India can authorize Private sector banks along with their public sector counterparts to do any government related business on equal footing .
Source : Twitter account of Ministry of Finance
Dated 25.02.2021 : Government of India has removed embargo on private sectors banks in doing government related banking services like pension disbursement , tax collection or other government agency business . They can also conduct small savings business on behalf of the government .
Now Reserve Bank of India can authorize Private sector banks along with their public sector counterparts to do any government related business on equal footing .
Source : Twitter account of Ministry of Finance
Positive Pay System for Cheque Truncation System
AVOID PAYMENT OF ALTERED CHEQUES
02.01.2021 : Positive Pay system has been introduced by banks in India from from January 01, 2021 as per RBI instructions . As per the system , if you issue a cheque for Rs 50,000 or more , you have to provide details of the cheque issued to the drawee bank in advance .
To participate in the system , customer is expected to provide his option to participate or not in the system . If you give your option , you are required to provide the cheque details issued by you (viz. cheque date, 6-digit cheque number, amount, beneficiary name) by visiting your nearest bank branch on the same day as issued by you or before it is handed over to the beneficiary.
If you participate in the system and provide the details of the Cheques which are compliant with the process, such cheques will be accepted under dispute resolution mechanism at the CTS grids . In case the cheque issuance details are not shared with drawee (issuing) bank, the right to raise a complaint under Dispute Redressal Mechanism where an altered cheque is paid from the account will be forfeited . Hence it is prudent to participate in the system to avoid payment of altered cheques and resultant financial consequences .
Banks are yet to make available the facility in their websites and internet banking applications .
What is Positive Pay System for Cheque Truncation System ?
02.01.2021 : Positive Pay system has been introduced by banks in India from from January 01, 2021 as per RBI instructions . As per the system , if you issue a cheque for Rs 50,000 or more , you have to provide details of the cheque issued to the drawee bank in advance .
To participate in the system , customer is expected to provide his option to participate or not in the system . If you give your option , you are required to provide the cheque details issued by you (viz. cheque date, 6-digit cheque number, amount, beneficiary name) by visiting your nearest bank branch on the same day as issued by you or before it is handed over to the beneficiary.
If you participate in the system and provide the details of the Cheques which are compliant with the process, such cheques will be accepted under dispute resolution mechanism at the CTS grids . In case the cheque issuance details are not shared with drawee (issuing) bank, the right to raise a complaint under Dispute Redressal Mechanism where an altered cheque is paid from the account will be forfeited . Hence it is prudent to participate in the system to avoid payment of altered cheques and resultant financial consequences .
Banks are yet to make available the facility in their websites and internet banking applications .
What is Positive Pay System for Cheque Truncation System ?
Positive Pay System for Cheque Truncation System
27.09.2020 : Reserve Bank of India ( RBI ) is going to implement Positive Pay system from from January 01, 2021.
As per the system , if you issue a cheque for Rs 50,000 or more , you have to provide details of the cheque issued to the drawee bank in advance .
What is Positive Pay System for Cheque Truncation System ?
The concept of Positive Pay involves a process of reconfirming key details of large value cheques. Under this process, the issuer of the cheque submits electronically, through channels like SMS, mobile app, internet banking, ATM, etc., certain minimum details of that cheque (like date, name of the beneficiary / payee, amount, etc.) to the drawee bank, details of which are cross checked with the presented cheque by CTS. Any discrepancy is flagged by CTS to the drawee bank and presenting bank, who would take redressal measures.
3. National Payments Corporation of India (NPCI) shall develop the facility of Positive Pay in CTS and make it available to participant banks. Banks, in turn, shall enable it for all account holders issuing cheques for amounts of ₹50,000 and above. While availing of this facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheques for amounts of ₹5,00,000 and above.
4. Only those cheques which are compliant with above instructions will be accepted under dispute resolution mechanism at the CTS grids. Member banks may implement similar arrangements for cheques cleared / collected outside CTS as well.
5. Banks are advised to create adequate awareness among their customers on features of Positive Pay System through SMS alerts, display in branches, ATMs as well as through their web-site and internet banking.
To go through the RBI Notification , CLICK HERE
IPPB LAUNCHES DIGITAL PAYMENT APP - DAK PAY
Dated 17.12.2020 : Department of posts & India Posts Payment Bank unveiled a new mobile App DAK PAY . The App is launched as part of its ongoing efforts to provide Digital Financial inclusion at the last mile across India.
DakPay is a digital payment app and the which has features of digital financial services and also assisted banking services provided by India Post & IPPB through the trusted Postal network across the nation to cater to the financial needs of its customers for sending money (Domestic Money Transfers – DMT), Scan QR code and make merchant payment (Virtual debit card & with UPI), enabling cashless ecosystem through biometrics, providing interoperable banking services to the customers of ANY BANK (AePS) and Utility Bill Payment services.
The launch event Minister was attended by Ravi Shankar Prasad , who appreciated India Post Payments Bank’s efforts during fight against Covid-19 by providing doorstep financial assistance through AePS leading to financial empowerment of the unbanked and the underbanked .
DAKPAY for Android can be downloaded at Google Play Stores OR WITH LINK However many users have complained about the quality of the App .
Dated 17.12.2020 : Department of posts & India Posts Payment Bank unveiled a new mobile App DAK PAY . The App is launched as part of its ongoing efforts to provide Digital Financial inclusion at the last mile across India.
DakPay is a digital payment app and the which has features of digital financial services and also assisted banking services provided by India Post & IPPB through the trusted Postal network across the nation to cater to the financial needs of its customers for sending money (Domestic Money Transfers – DMT), Scan QR code and make merchant payment (Virtual debit card & with UPI), enabling cashless ecosystem through biometrics, providing interoperable banking services to the customers of ANY BANK (AePS) and Utility Bill Payment services.
The launch event Minister was attended by Ravi Shankar Prasad , who appreciated India Post Payments Bank’s efforts during fight against Covid-19 by providing doorstep financial assistance through AePS leading to financial empowerment of the unbanked and the underbanked .
DAKPAY for Android can be downloaded at Google Play Stores OR WITH LINK However many users have complained about the quality of the App .
RTGS WILL BE AVAILABLE 24 X 7 FROM MONDAY
Dated 12.12.2020 : National Electronic Fund Transfer ( NEFT ) was made available round the clock , 7 days a week from 15th , December 2019 . Real Time Gross Settlement ( RTGS ) will also be available round the clock from early morning 3.30 am of the Monday 14th, December 2020 . The large-value RTGS system is currently available for customers from 7.00 am to 6.00 pm on all working days of a week (except 2nd and 4th Saturdays of the month). Funds transfers above Rs 2,00,000 can be made using RTGS facility .
RTGS thus will be available every day from early morning 00.30 hrs ( Start of the Day ) to 11.50 pm in the night ( End of the Day ) . However RTGS will not be available for customer and inter-bank transactions during the interval between ‘end-of-day’ and ‘start-of-day’ processes, whose timings would be duly broadcasted through the RTGS system.
RBI is undertaking the above facility to support the ongoing efforts aimed at global integration of Indian financial markets, facilitate India’s efforts to develop international financial centers and to provide wider payment flexibility to domestic corporates and institutions .
To read complete regulation of RTGS as amended now , CLICK HERE
Dated 12.12.2020 : National Electronic Fund Transfer ( NEFT ) was made available round the clock , 7 days a week from 15th , December 2019 . Real Time Gross Settlement ( RTGS ) will also be available round the clock from early morning 3.30 am of the Monday 14th, December 2020 . The large-value RTGS system is currently available for customers from 7.00 am to 6.00 pm on all working days of a week (except 2nd and 4th Saturdays of the month). Funds transfers above Rs 2,00,000 can be made using RTGS facility .
RTGS thus will be available every day from early morning 00.30 hrs ( Start of the Day ) to 11.50 pm in the night ( End of the Day ) . However RTGS will not be available for customer and inter-bank transactions during the interval between ‘end-of-day’ and ‘start-of-day’ processes, whose timings would be duly broadcasted through the RTGS system.
RBI is undertaking the above facility to support the ongoing efforts aimed at global integration of Indian financial markets, facilitate India’s efforts to develop international financial centers and to provide wider payment flexibility to domestic corporates and institutions .
To read complete regulation of RTGS as amended now , CLICK HERE
LIMIT FOR CONTACTLESS PAYMENT ON CARDS TO BE ENHANCED
Dated 04.12.2020 : Presently you can make payment up to Rs 2,000 in contactless mode on the cards ( Debit / Credit cards ) . Now Reserve Bank of India is proposing to increase the limit to Rs 5,000 from 01st, January 2021 . In the contactless mode , you can make payment without swiping your card , but by just waving at the POS machine . You need not enter the PIN also and hence you need not touch the POS machine which makes transaction safer in the times of spread of pandemic corona .
However the discretion to use the enhanced limit lies with you and you may not avail the facility also . Further you have to be careful not to take your card to nearby POS machine when you have not done any transaction , especially if the merchant has mobile POS machine .
To read the policy statement dated 04.12.2020 of RBI , CLICK HERE
Dated 04.12.2020 : Presently you can make payment up to Rs 2,000 in contactless mode on the cards ( Debit / Credit cards ) . Now Reserve Bank of India is proposing to increase the limit to Rs 5,000 from 01st, January 2021 . In the contactless mode , you can make payment without swiping your card , but by just waving at the POS machine . You need not enter the PIN also and hence you need not touch the POS machine which makes transaction safer in the times of spread of pandemic corona .
However the discretion to use the enhanced limit lies with you and you may not avail the facility also . Further you have to be careful not to take your card to nearby POS machine when you have not done any transaction , especially if the merchant has mobile POS machine .
To read the policy statement dated 04.12.2020 of RBI , CLICK HERE
LVB CUSTOMERS CAN CONTINUE TO BANK WITH THE SAME BENEFITS AS EARLIER :
Dated 01.12.2020 : After taking over the assets , liabilities and management of Lakshmi Vilas Bank , DBS has announced that the customers of LVB can continue to avail banking services as earlier and can resume banking through the Lakshmi Vilas branches and ATM network as usual . The announcement further says
"
1. Existing fixed deposit/s with erstwhile LVB will continue at the interest rates, at which they were originally booked, till the next maturity date
2. The interest rates on savings bank accounts will be governed by the rates offered by erstwhile LVB till further notice .
3. Any new deposits being booked now, will be at rates which were earlier published by erstwhile LVB, till new rate cards are announced. "
DBS Bank will be now working to integrate LVB’s systems and network into DBS over the coming months. During this period, customers of LVB will be able to access all the banking services of erstwhile LVB. Once this is completed, Customers will be able to access a wider range of products and services, including access to the full suite of DBS digital banking services .
To read announcement of LVB / DBS Bank , CLICK HERE
Dated 01.12.2020 : After taking over the assets , liabilities and management of Lakshmi Vilas Bank , DBS has announced that the customers of LVB can continue to avail banking services as earlier and can resume banking through the Lakshmi Vilas branches and ATM network as usual . The announcement further says
"
1. Existing fixed deposit/s with erstwhile LVB will continue at the interest rates, at which they were originally booked, till the next maturity date
2. The interest rates on savings bank accounts will be governed by the rates offered by erstwhile LVB till further notice .
3. Any new deposits being booked now, will be at rates which were earlier published by erstwhile LVB, till new rate cards are announced. "
DBS Bank will be now working to integrate LVB’s systems and network into DBS over the coming months. During this period, customers of LVB will be able to access all the banking services of erstwhile LVB. Once this is completed, Customers will be able to access a wider range of products and services, including access to the full suite of DBS digital banking services .
To read announcement of LVB / DBS Bank , CLICK HERE
PSBS NOT TO REVISE CHARGES IN NEAR FUTURE : FINANCE MINISTRY
Dated 04.11.2020 : Leading Public sector bank Bank of Baroda had revised their services charges recently , especially in cash handling services and there was a public outcry against it . Further News paper reports had suggested that other public sector banks might follow suit . However Finance Ministry has clarified that no public sector bank is going to revise service charges in near future .
Bank of Baroda , the only PSB that had revised the charges , has since taken back the revision that was effective from 01st, November 2020 .
Finance Ministry has also clarified that No service charge is applicable on the 60.04 crore BSBD accounts, including 41.13 crore Jan Dhan accounts opened by the poor and unbanked segments of society, for the free services prescribed by RBI.
To read Finance Ministry's Press Release , CLICK HERE
Dated 04.11.2020 : Leading Public sector bank Bank of Baroda had revised their services charges recently , especially in cash handling services and there was a public outcry against it . Further News paper reports had suggested that other public sector banks might follow suit . However Finance Ministry has clarified that no public sector bank is going to revise service charges in near future .
Bank of Baroda , the only PSB that had revised the charges , has since taken back the revision that was effective from 01st, November 2020 .
Finance Ministry has also clarified that No service charge is applicable on the 60.04 crore BSBD accounts, including 41.13 crore Jan Dhan accounts opened by the poor and unbanked segments of society, for the free services prescribed by RBI.
To read Finance Ministry's Press Release , CLICK HERE
SBI INTRODUCES OTP BASED CASH WITHDRAWALS
Attn SBI customers :
Dated 17.09.2020 : Tomorrow onward you have to carry your mobile to State Bank of India's ATM machine if you want to draw cash of Rs 10,000 or above through your SBI Debit card .
Hence you should have registered your Mobile number with State Bank of India for the particular SB account for which debit card has been issued . You will receive OTP as soon as you attempt to draw cash of Rs 10,000 or above from any SBI ATM machine . Only after successful entry of OTP , cash will be dispensed from the machine .
It is first time in India any bank has introduced such a system .
Attn SBI customers :
Dated 17.09.2020 : Tomorrow onward you have to carry your mobile to State Bank of India's ATM machine if you want to draw cash of Rs 10,000 or above through your SBI Debit card .
Hence you should have registered your Mobile number with State Bank of India for the particular SB account for which debit card has been issued . You will receive OTP as soon as you attempt to draw cash of Rs 10,000 or above from any SBI ATM machine . Only after successful entry of OTP , cash will be dispensed from the machine .
It is first time in India any bank has introduced such a system .
BANKS CAN ACCESS YOUR IT RETURNS FILING STATUS NOW
Dated 04.09.2020 : If you have not submitted your IT returns for the last three years and if you withdraw cash from a bank , post office or co-operative society , following TDS ( Tax deducted at source ) will be collected from you under section 194N of Income Tax Act :
1. If you withdraw more than Rs 2 lakhs and up to Rs 1 crore in a year , 2 % of cash drawn will be collected as TDS
2. If the cash drawn exceeds Rs 1 crore in a year , 5 % of cash drawn will be collected as TDS
If IT Returns have been submitted , a lower rate of 2 % will be collected only if the cash withdrawal amount exceeds Rs 1 crore in the year .
The amount so collected can be claimed by you as Advance tax paid while submitting the returns .
BANKERS CAN CHECK ITR FILING STATUS NOW :
In order to help banks with the information of the customers with regard to status of filing of IT Returns , The Income Tax Department has now released a new functionality “ITR Filing Compliance Check” which will be available to Scheduled Commercial Banks (SCBs) to check the IT Return filing status of PANs in bulk mode. The Principal Director General of Income-tax (Systems) has notified the procedure and format for providing notified information to the Scheduled Commercial Banks.
For detailed guidelines to bankers how to access the information , CLICK HERE
1. If you withdraw more than Rs 2 lakhs and up to Rs 1 crore in a year , 2 % of cash drawn will be collected as TDS
2. If the cash drawn exceeds Rs 1 crore in a year , 5 % of cash drawn will be collected as TDS
If IT Returns have been submitted , a lower rate of 2 % will be collected only if the cash withdrawal amount exceeds Rs 1 crore in the year .
The amount so collected can be claimed by you as Advance tax paid while submitting the returns .
BANKERS CAN CHECK ITR FILING STATUS NOW :
In order to help banks with the information of the customers with regard to status of filing of IT Returns , The Income Tax Department has now released a new functionality “ITR Filing Compliance Check” which will be available to Scheduled Commercial Banks (SCBs) to check the IT Return filing status of PANs in bulk mode. The Principal Director General of Income-tax (Systems) has notified the procedure and format for providing notified information to the Scheduled Commercial Banks.
For detailed guidelines to bankers how to access the information , CLICK HERE
NOW ELECTRONIC CARDS FOR OVERDRAFT / CASH CREDIT ACCOUNTS
Dated 24.04.2020 : Reserve Bank of India ( RBI ) has now permitted all banks to issue Electronic Cards for individuals having overdraft / cash credit facilities . The cards can be issued to persons having overdraft facilities in the nature of personal loans and without any end use restrictions . The cards are to be co-terminated with lapse of the limit . The cards can be used only for on-line / non-cash transactions . . The cards cannot be used for international transactions .
The restriction on cash transaction will not apply to overdraft facility provided along with Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts.
For RBI Notification dated 23.04.2020 , CLICK HERE
Dated 24.04.2020 : Reserve Bank of India ( RBI ) has now permitted all banks to issue Electronic Cards for individuals having overdraft / cash credit facilities . The cards can be issued to persons having overdraft facilities in the nature of personal loans and without any end use restrictions . The cards are to be co-terminated with lapse of the limit . The cards can be used only for on-line / non-cash transactions . . The cards cannot be used for international transactions .
The restriction on cash transaction will not apply to overdraft facility provided along with Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts.
For RBI Notification dated 23.04.2020 , CLICK HERE
BANKING DURING THE LOCK -DOWN PERIOD
Dated 25.03.2020 : Prime Minister Shri Narendra Modi announced yesterday night total lock down of India for next 21 days . He requested all Indians to follow the government orders issued time to time from concerned authorities to save India from spread of the pandemic Covid -19 . As per subsequent guidelines issued by Ministry of Home Affairs ( MHA ) , the banking services are allowed to operate during the lock down period of 21 days staring from today :.
However inn light of World health Organization ( WHO ) declaring Coronavirus disease ( COVID-19 ) as pandemic ,banks have been asked by RBI to encourage their customers to use digital banking facilities as far as possible . Further Indian Banks' Association has announced the availability of following services only in the bank branches
1. Cash Deposits & withdrawals
2. Clearing of cheques
3. Remittances
4. Government transactions
In order to protect their staff and customers , many banks have taken various steps like providing masks and sanitizers , reducing the number of staff working simultaneously at the branch level and work from home for the administrative staff etc and also curtailed the banking hours . In view of non-availability of public transport and requirement of social distancing , it will be difficult for the customers also to visit the branch and complete the trasactiuons . As banks and RBI have also appealed to the customers to utilse Digital banking facilities available , it will be better for customers to avoid visit of bank branches as far as possible . Customers may uitilize on-line services and Mobile APPS and save themselves from personal visits and safeguard themselves .
We have therefore a page exclusively listing all the major banks in India with links to their websites . Our readers may utilize the facility by CLICKING HERE . They can go to the websites of the banks where they maintain account , register for internet banking if they have not already done . Most of the transactions they can do on-line now and save themselves and others from spreading the virus
Dated 25.03.2020 : Prime Minister Shri Narendra Modi announced yesterday night total lock down of India for next 21 days . He requested all Indians to follow the government orders issued time to time from concerned authorities to save India from spread of the pandemic Covid -19 . As per subsequent guidelines issued by Ministry of Home Affairs ( MHA ) , the banking services are allowed to operate during the lock down period of 21 days staring from today :.
However inn light of World health Organization ( WHO ) declaring Coronavirus disease ( COVID-19 ) as pandemic ,banks have been asked by RBI to encourage their customers to use digital banking facilities as far as possible . Further Indian Banks' Association has announced the availability of following services only in the bank branches
1. Cash Deposits & withdrawals
2. Clearing of cheques
3. Remittances
4. Government transactions
In order to protect their staff and customers , many banks have taken various steps like providing masks and sanitizers , reducing the number of staff working simultaneously at the branch level and work from home for the administrative staff etc and also curtailed the banking hours . In view of non-availability of public transport and requirement of social distancing , it will be difficult for the customers also to visit the branch and complete the trasactiuons . As banks and RBI have also appealed to the customers to utilse Digital banking facilities available , it will be better for customers to avoid visit of bank branches as far as possible . Customers may uitilize on-line services and Mobile APPS and save themselves from personal visits and safeguard themselves .
We have therefore a page exclusively listing all the major banks in India with links to their websites . Our readers may utilize the facility by CLICKING HERE . They can go to the websites of the banks where they maintain account , register for internet banking if they have not already done . Most of the transactions they can do on-line now and save themselves and others from spreading the virus
COVID 19 AND DIGITAL BANKING
Dated 20.03.2020 : In light of World health Organization ( WHO ) declaring Coronavirus disease ( COVID-19 ) as pandemic ,banks have been asked by RBI to encourage their customers to use digital banking facilities as far as possible . In order to protect their staff and customers , many banks have taken various steps like providing masks and sanitizers , reducing the number of staff working simultaneously at the branch level and work from home for the administrative staff etc . They have also appealed to the customers to utilse Digital banking facilities available and to avoid visit of bank branches as far as possible . Social distancing has become one of the important tools to fight the spread of virus . .
We have a page exclusively listing all the major banks in India with links to their websites . Our readers may utilize the facility by
CLICKING HERE . They can go to the websites of the banks where they maintain account , register for internet banking if they have not already done . Most of the transactions they can do on-line now and save themselves and others from spreading the virus .
Dated 20.03.2020 : In light of World health Organization ( WHO ) declaring Coronavirus disease ( COVID-19 ) as pandemic ,banks have been asked by RBI to encourage their customers to use digital banking facilities as far as possible . In order to protect their staff and customers , many banks have taken various steps like providing masks and sanitizers , reducing the number of staff working simultaneously at the branch level and work from home for the administrative staff etc . They have also appealed to the customers to utilse Digital banking facilities available and to avoid visit of bank branches as far as possible . Social distancing has become one of the important tools to fight the spread of virus . .
We have a page exclusively listing all the major banks in India with links to their websites . Our readers may utilize the facility by
CLICKING HERE . They can go to the websites of the banks where they maintain account , register for internet banking if they have not already done . Most of the transactions they can do on-line now and save themselves and others from spreading the virus .
NO MINIMUM BALANCE CHARGES FOR SB ACCOUNTS : SBI
Dated 12.03.2020 : Leading Public sector bank State Bank of India ( SBI ) announced waiver of Minimum Balance Charges for all savings bank accounts held with them effective from January 1, 2020 . All customers of SBI will now enjoy zero balance facility .
Currently Savings Bank customers of SBI need to maintain Average Monthly Balance of Rs 3000, Rs 2000 and Rs 1000 in Metro, Semi Urban and Rural areas respectively. Bank used to levy a penalty of Rs 5 to Rs 15 + taxes on non-maintenance of AMB.
Further the bank has also waived SMS charges being levied by them for communicating account transactions on the mobiles of the customers .
Dated 12.03.2020 : Leading Public sector bank State Bank of India ( SBI ) announced waiver of Minimum Balance Charges for all savings bank accounts held with them effective from January 1, 2020 . All customers of SBI will now enjoy zero balance facility .
Currently Savings Bank customers of SBI need to maintain Average Monthly Balance of Rs 3000, Rs 2000 and Rs 1000 in Metro, Semi Urban and Rural areas respectively. Bank used to levy a penalty of Rs 5 to Rs 15 + taxes on non-maintenance of AMB.
Further the bank has also waived SMS charges being levied by them for communicating account transactions on the mobiles of the customers .
YOUR CARDS WILL BE DISABLED IF YOU HAVE NOT USED THEM ON-LINE SO FAR
Dated 16.01.2020 : Reserve Bank of India ( RBI ) has asked all banks and card issuers to disable all the cards issued by them which are never used for on-line transactions by March 16,2020 . However the facility to use the cards in ATMs and Point of Sales ( POS ) Devices will continue . The card issuers are also asked to review all other existing cards issued and decide whether to continue the facilities in the cards based on risk perception .
RBI has asked all card issuers to issue the new cards ( Fresh / RRe-issue ) enabling only ATM transactions and
POS transactions . However the cards issuers should give a facility to the customers to enable on-line transactions if they desire .
Additionally, the issuers shall provide to all cardholders the facilities to switch on / off and set / modify transaction limits (within the overall card limit, if any, set by the issuer) for all types of transactions – domestic and international, at PoS / ATMs / online transactions / contactless transactions, etc. The facility should be available on a 24x7 basis through multiple channels - mobile application / internet banking / ATMs / Interactive Voice Response (IVR) . Banks
should maje the facility available at all branches / offices . Banks should send alerts / information / status, etc., through SMS / e-mail, as and when there is any change in status of the card.
For RBI Notification , CLICK HERE
Dated 16.01.2020 : Reserve Bank of India ( RBI ) has asked all banks and card issuers to disable all the cards issued by them which are never used for on-line transactions by March 16,2020 . However the facility to use the cards in ATMs and Point of Sales ( POS ) Devices will continue . The card issuers are also asked to review all other existing cards issued and decide whether to continue the facilities in the cards based on risk perception .
RBI has asked all card issuers to issue the new cards ( Fresh / RRe-issue ) enabling only ATM transactions and
POS transactions . However the cards issuers should give a facility to the customers to enable on-line transactions if they desire .
Additionally, the issuers shall provide to all cardholders the facilities to switch on / off and set / modify transaction limits (within the overall card limit, if any, set by the issuer) for all types of transactions – domestic and international, at PoS / ATMs / online transactions / contactless transactions, etc. The facility should be available on a 24x7 basis through multiple channels - mobile application / internet banking / ATMs / Interactive Voice Response (IVR) . Banks
should maje the facility available at all branches / offices . Banks should send alerts / information / status, etc., through SMS / e-mail, as and when there is any change in status of the card.
For RBI Notification , CLICK HERE
BANKERS TO DO VIDEO IDENTIFICATION AND TAKE LIVE PICTURE OF CUSTOMER FOR E-KYC PURPOSE : RBI
DATED 10.01.2020 : Reserve Bank of India has amended Master Direction for KYC , vide their notification dated 09.01.2020 and advised bankers to obtain live pictures of customers for completing the E-KYC process . The notification has identified Digital KYC process as " capturing live photo of the customer and officially valid document or the proof of possession of Aadhaar, where offline verification cannot be carried out, along with the latitude and longitude of the location where such live photo is being taken by an authorised officer of the bank "
Further bankers can do video based customer identification process ( V-CIP ) for KYC verification . However all accounts opened through V-CIP shall be made operational only after being subject to concurrent audit, to ensure the integrity of process.
Bankers have to ensure that the process is a seamless, real-time, secured, end-to-end encrypted audiovisual interaction with the customer and the quality of the communication is adequate to allow identification of the customer beyond doubt. Bankers shall carry out the liveliness check in order to guard against spoofing and such other fraudulent manipulations. Banks can use either OTP based Aadhaar e-KYC authentication or Offline Verification of Aadhaar for identification. Further, services of Business Correspondents (BCs) may be used by banks for aiding the V-CIP.
Bankers shall ensure that photograph of the customer in the Aadhaar/PAN details matches with the customer undertaking the V-CIP and the identification details in Aadhaar/PAN shall match with the details provided by the customer.
As per the notification , customers have to furnish copy of any of the OVD document containing address and identity proofs along with recent photograph .
“Officially Valid Document” (OVD) will mean
a. the Aadhaar number where he is desirous of receiving any benefit or subsidy under any scheme notified under section 7 of the Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits and Services) Act, 2016 (18 of 2016); or he decides to submit his Aadhaar number voluntarily to a banking company or any reporting entity notified under first proviso to sub-section (1) of section 11A of the PML Act; or
b. the proof of possession of Aadhaar number where offline verification can be carried out; or
c. the proof of possession of Aadhaar number where offline verification cannot be carried out or
d. any Officially Valid Document (OVD) or the equivalent e-document thereof containing the details of his identity and address; and
such other documents including in respect of the nature of business and financial status of the client, or the equivalent e-documents thereof as may be required by the banker.
1. Passport,
2. Driving licence
3.Proof of possession of Aadhaar number
4. Voter's Identity Card issued by the Election Commission of India
5. Job card issued by NREGA duly signed by an officer of the State Government and letter issued by the
National Population Register containing details of name and address.
Provided that,
a. where the customer submits his proof of possession of Aadhaar number as an OVD, he may submit it in such form as are issued by the Unique Identification Authority of India.
b. where the OVD furnished by the customer does not have updated address, the following documents shall be deemed to be OVDs for the limited purpose of proof of address:-
i. utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
ii. property or Municipal tax receipt;
iii. pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector
Undertakings, if they contain the address;
iv. letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation;
f. the Permanent Account Number or the equivalent e-document thereof or Form No. 60 as defined in Income-tax Rules, 1962
.Where a customer has provided his Aadhaar number as above for identification and wants to provide a current address, different from the address as per the identity information available in the Central Identities Data Repository, he may give a self-declaration to that effect to the Banker .
Where customer has provided PAN card , Banker shall capture a clear image of PAN card to be displayed by the customer during the process, except in cases where e-PAN is provided by the customer. The PAN details shall be verified from the database of the issuing authority
As the notification contains various amendments to the KYC process , one may know all the amendments carried out by RBI through Notification dated 09.01.2020 , by CLICKNIG HERE
DATED 10.01.2020 : Reserve Bank of India has amended Master Direction for KYC , vide their notification dated 09.01.2020 and advised bankers to obtain live pictures of customers for completing the E-KYC process . The notification has identified Digital KYC process as " capturing live photo of the customer and officially valid document or the proof of possession of Aadhaar, where offline verification cannot be carried out, along with the latitude and longitude of the location where such live photo is being taken by an authorised officer of the bank "
Further bankers can do video based customer identification process ( V-CIP ) for KYC verification . However all accounts opened through V-CIP shall be made operational only after being subject to concurrent audit, to ensure the integrity of process.
Bankers have to ensure that the process is a seamless, real-time, secured, end-to-end encrypted audiovisual interaction with the customer and the quality of the communication is adequate to allow identification of the customer beyond doubt. Bankers shall carry out the liveliness check in order to guard against spoofing and such other fraudulent manipulations. Banks can use either OTP based Aadhaar e-KYC authentication or Offline Verification of Aadhaar for identification. Further, services of Business Correspondents (BCs) may be used by banks for aiding the V-CIP.
Bankers shall ensure that photograph of the customer in the Aadhaar/PAN details matches with the customer undertaking the V-CIP and the identification details in Aadhaar/PAN shall match with the details provided by the customer.
As per the notification , customers have to furnish copy of any of the OVD document containing address and identity proofs along with recent photograph .
“Officially Valid Document” (OVD) will mean
a. the Aadhaar number where he is desirous of receiving any benefit or subsidy under any scheme notified under section 7 of the Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits and Services) Act, 2016 (18 of 2016); or he decides to submit his Aadhaar number voluntarily to a banking company or any reporting entity notified under first proviso to sub-section (1) of section 11A of the PML Act; or
b. the proof of possession of Aadhaar number where offline verification can be carried out; or
c. the proof of possession of Aadhaar number where offline verification cannot be carried out or
d. any Officially Valid Document (OVD) or the equivalent e-document thereof containing the details of his identity and address; and
such other documents including in respect of the nature of business and financial status of the client, or the equivalent e-documents thereof as may be required by the banker.
1. Passport,
2. Driving licence
3.Proof of possession of Aadhaar number
4. Voter's Identity Card issued by the Election Commission of India
5. Job card issued by NREGA duly signed by an officer of the State Government and letter issued by the
National Population Register containing details of name and address.
Provided that,
a. where the customer submits his proof of possession of Aadhaar number as an OVD, he may submit it in such form as are issued by the Unique Identification Authority of India.
b. where the OVD furnished by the customer does not have updated address, the following documents shall be deemed to be OVDs for the limited purpose of proof of address:-
i. utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
ii. property or Municipal tax receipt;
iii. pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector
Undertakings, if they contain the address;
iv. letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation;
f. the Permanent Account Number or the equivalent e-document thereof or Form No. 60 as defined in Income-tax Rules, 1962
.Where a customer has provided his Aadhaar number as above for identification and wants to provide a current address, different from the address as per the identity information available in the Central Identities Data Repository, he may give a self-declaration to that effect to the Banker .
Where customer has provided PAN card , Banker shall capture a clear image of PAN card to be displayed by the customer during the process, except in cases where e-PAN is provided by the customer. The PAN details shall be verified from the database of the issuing authority
As the notification contains various amendments to the KYC process , one may know all the amendments carried out by RBI through Notification dated 09.01.2020 , by CLICKNIG HERE
- BANKS CAN NOW ACCEPT CURRENT ADDRESS OTHER THAN IN AADHAAR
- Dated 14.11.2019 : As per Gazette notification dated 13.11.2019 , new current address , other than recorded in the Aadhaar card may be provided to authorities by way of self declaration .
- People who migrate to new places on taking up jobs were finding it difficult to open banking accounts as their address in Aadhaar card would be of their permanent residence in their native place and the current address will not match that in Aadhaar card . The rule change will help such persons to open bank accounts in their new places of work by providing current address by self declaration and banks can record current address and communication can be done to the current address .
The changes in rules have been made by amending the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 .
For Gazette Notification dated 13.11.2019 , CLICK HERE
NEW RULES FOR BASIC SAVINGS BANK DEPOSIT ACCOUNTS ( BSBD )
DATED 11.06 .2019 : Reserve Bank of India has issued new guidelines to banks on 10.06.2019 with regard to opening of Basic Savings Bank Deposit Accounts ( BSBD ) . As per the new notification , banks have to offer following free services without requirement of any minimum balances for their BSBD account holders .
1. The deposit of cash at bank branch as well as ATMs/CDMs
2.Receipt/ credit of money through any electronic channel or by means of deposit /collection of cheques drawn by Central/State Government agencies and departments
3. No limit on number and value of deposits that can be made in a month
4.Minimum of four withdrawals in a month, including ATM withdrawals
5. ATM Card or ATM-cum-Debit Card
Further banks have to make the BSBD account service available to all . However banks may charge service fee if any additional service , like issue of cheque book , is provided to the BSBD a/c holders at their request .
The holders of BSBD Account will not be eligible for opening any other savings bank deposit account in that bank. If a customer has any other existing savings bank deposit account in that bank, he/she will be required to close it within 30 days from the date of opening a BSBD Account. Further, before opening a BSBD account, a bank should take a declaration from the customer that he/she is not having a BSBD account in any other bank.
For RBI Notification dated 10.06.2019 , CLICK HERE
DATED 11.06 .2019 : Reserve Bank of India has issued new guidelines to banks on 10.06.2019 with regard to opening of Basic Savings Bank Deposit Accounts ( BSBD ) . As per the new notification , banks have to offer following free services without requirement of any minimum balances for their BSBD account holders .
1. The deposit of cash at bank branch as well as ATMs/CDMs
2.Receipt/ credit of money through any electronic channel or by means of deposit /collection of cheques drawn by Central/State Government agencies and departments
3. No limit on number and value of deposits that can be made in a month
4.Minimum of four withdrawals in a month, including ATM withdrawals
5. ATM Card or ATM-cum-Debit Card
Further banks have to make the BSBD account service available to all . However banks may charge service fee if any additional service , like issue of cheque book , is provided to the BSBD a/c holders at their request .
The holders of BSBD Account will not be eligible for opening any other savings bank deposit account in that bank. If a customer has any other existing savings bank deposit account in that bank, he/she will be required to close it within 30 days from the date of opening a BSBD Account. Further, before opening a BSBD account, a bank should take a declaration from the customer that he/she is not having a BSBD account in any other bank.
For RBI Notification dated 10.06.2019 , CLICK HERE
AADHAAR IS NO LONGER MANDATORY FOR OPENING BANK ACCOUNTS AS PER SUPREME COURT VERDICT : REPERCUSSIONS
DATED 27.09.2018 : Reserve Bank of India had Aadhaar mandatory for opening accounts with banks and also conducting any transactions with banks for more than Rs 50,000. as per the amended master direction issued by them on 20.04.2018 . The direction issued was subject to final outcome of the pending cases in the supreme court with regard to validity of Aadhaar and instructions issued by Central Government / Reserve Bank of India . ( For RBI Master Direction on KYC updated on 20.04.2018 , CLICK HERE ) .
Now Supreme Court has given the verdict that it is not mandatory to obtain Aadhaar card for opening bank accounts , as the instructions given by the government are not backed by any law . Hence master circular will need amendment now . As a result of court decision , linking of Aadhaar to bank accounts will also not be compulsory . However customers may furnish Aadhaar as an identity proof / address proof like any other OVD ( Official Valid Document ) . OVD includes Passport , Driving licence , Voter's ID , Job card issued by NREGA and letter issued by National Population Registry .
Some of the questions that arise after the verdict are
1. What will be the fate of the accounts that are already linked ?
2. Whether customers , who are not DBT beneficiaries can demand un-linking ?
3. As supreme court says linking was not mandated by law as a reason for striking it down , whether government will enact another law making aadhaar linking mandatory ?
So far , we are yet to hear the government plans in response to court verdict .
We hope Reserve Bank of India will issue fresh guidelines / master guidelines clarifying various issues involved as a result of supreme court verdict and it will be made clear for both banker sand customers for easy transactions.
DATED 27.09.2018 : Reserve Bank of India had Aadhaar mandatory for opening accounts with banks and also conducting any transactions with banks for more than Rs 50,000. as per the amended master direction issued by them on 20.04.2018 . The direction issued was subject to final outcome of the pending cases in the supreme court with regard to validity of Aadhaar and instructions issued by Central Government / Reserve Bank of India . ( For RBI Master Direction on KYC updated on 20.04.2018 , CLICK HERE ) .
Now Supreme Court has given the verdict that it is not mandatory to obtain Aadhaar card for opening bank accounts , as the instructions given by the government are not backed by any law . Hence master circular will need amendment now . As a result of court decision , linking of Aadhaar to bank accounts will also not be compulsory . However customers may furnish Aadhaar as an identity proof / address proof like any other OVD ( Official Valid Document ) . OVD includes Passport , Driving licence , Voter's ID , Job card issued by NREGA and letter issued by National Population Registry .
Some of the questions that arise after the verdict are
1. What will be the fate of the accounts that are already linked ?
2. Whether customers , who are not DBT beneficiaries can demand un-linking ?
3. As supreme court says linking was not mandated by law as a reason for striking it down , whether government will enact another law making aadhaar linking mandatory ?
So far , we are yet to hear the government plans in response to court verdict .
We hope Reserve Bank of India will issue fresh guidelines / master guidelines clarifying various issues involved as a result of supreme court verdict and it will be made clear for both banker sand customers for easy transactions.
NEW BLOG ARTICLE ON
HEALTH INSURANCE OPTIONS FOR RETIRED BANKERS
The article explores the alternative avenues for existing health insurance group policy for Retired Bankers
TO READ THE ARTICLE CLICK HERE
HEALTH INSURANCE OPTIONS FOR RETIRED BANKERS
The article explores the alternative avenues for existing health insurance group policy for Retired Bankers
TO READ THE ARTICLE CLICK HERE
BIO-METRIC VERIFICATION RELAXED FOR OLD AGED AND INJURED FOR OPENING BANK ACCOUNTS
21.05.2018 : Finance Ministry , Government of India , through a gazette notification on 16.05.2018 , relaxed rules for bio-metric verification of the identity for opening bank accounts in case the persons are unable to offer bio metric verification due to injury , illness or infirmity due to old age or otherwise . In such cases banks will not be able to verify the identity on the basis of aadhaar card they hold . Such persons can now provide alternate proofs of identity to open bank accounts and to continue banking operations without difficulty .
For Gazette Notification , CLICK HERE
AADHAR IS MANDATORY FOR OPENING BANK ACCOUNTS AS PER NEW KYC GUIDELINES OF RBI
DATED 22.04.2018 : Reserve Bank of India made Aadhar mandatory for opening accounts with banks and also conducting any transactions with banks for more than Rs 50,000. as per the amended master direction issued on 20.04.2018 .
The requirement will not apply to Non- Residents , Residents of Assam , Meghalaya and Jammu & Kashmir . Along with Aadhaar number , one has to furnish PAN number or Form 60 . They have to submit çertified copy of Official Valid Document ( OVD ) containing details of identity and address along with their recent photograph . OVD includes Passport , Driving licence , Voter's ID , Job card issued by NREGA and letter issued by National Population Registry .
Banks to accept any of the following documents in cases where valid documents do not contain updated addresses for the limited purpose of address proof :
(a) utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
(b) property or Municipal tax receipt;
(c) pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;
(d) letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation; Provided further that the client shall submit updated officially valid document with current address within a period of three months of submitting the above documents.”.
At the time of receipt of Aadhaar card , banks will complete e-KYC authentication either using biometrics or OTP . If you do not hold Aadhar card , you have to at least submit proof of enrollment of Aadhar for opening the bank accounts and submit the Aadhar number within six months .
Small accounts can be opened without Aadhar / PAN with bank branches having core banking only and such small account holders have to furnish their Aadhar numbers within 24 months . However such accounts will be monitored very closely by the authorities against any suspicious overseas money transfers . Small accounts are the Savings Bank accounts with less than a turn over of Rs 1.00 lakh in a year , less than withdrawals and transfers Rs 10,000 per month and balance not exceeding Rs 50,000 at any time . For corporate accounts , authorised signatories of the accounts have to produce their Aadhar numbers .
The instructions issued by RBI are subject to final decision to be given by supreme court on the matter of Aadhaar
For RBI Master Direction on KYC updated on 20.04.2018 , CLICK HERE
DATED 22.04.2018 : Reserve Bank of India made Aadhar mandatory for opening accounts with banks and also conducting any transactions with banks for more than Rs 50,000. as per the amended master direction issued on 20.04.2018 .
The requirement will not apply to Non- Residents , Residents of Assam , Meghalaya and Jammu & Kashmir . Along with Aadhaar number , one has to furnish PAN number or Form 60 . They have to submit çertified copy of Official Valid Document ( OVD ) containing details of identity and address along with their recent photograph . OVD includes Passport , Driving licence , Voter's ID , Job card issued by NREGA and letter issued by National Population Registry .
Banks to accept any of the following documents in cases where valid documents do not contain updated addresses for the limited purpose of address proof :
(a) utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
(b) property or Municipal tax receipt;
(c) pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;
(d) letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation; Provided further that the client shall submit updated officially valid document with current address within a period of three months of submitting the above documents.”.
At the time of receipt of Aadhaar card , banks will complete e-KYC authentication either using biometrics or OTP . If you do not hold Aadhar card , you have to at least submit proof of enrollment of Aadhar for opening the bank accounts and submit the Aadhar number within six months .
Small accounts can be opened without Aadhar / PAN with bank branches having core banking only and such small account holders have to furnish their Aadhar numbers within 24 months . However such accounts will be monitored very closely by the authorities against any suspicious overseas money transfers . Small accounts are the Savings Bank accounts with less than a turn over of Rs 1.00 lakh in a year , less than withdrawals and transfers Rs 10,000 per month and balance not exceeding Rs 50,000 at any time . For corporate accounts , authorised signatories of the accounts have to produce their Aadhar numbers .
The instructions issued by RBI are subject to final decision to be given by supreme court on the matter of Aadhaar
For RBI Master Direction on KYC updated on 20.04.2018 , CLICK HERE
BANKS TO VERIFY COPIES OF DOCUMENTS PRESENTED WITH ORIGINALS
Dated 23.10.2017 : Government has instructed banks and other financial institutions , through a Gazette notification , to verify copies of documents produced with originals and to record the same on the copy by the authorised officers . Hence customers , for the purpose of identity proof and address proof , have to produce original documents to the bankers and financial institutions along with copies of the documents . Bankers may return the originals after making note on the copies of the verification done .
Further Gazette notification permits banks to accept any of the following documents in cases where valid documents do not contain updated addresses for the limited purpose of address proof :
(a) utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
(b) property or Municipal tax receipt;
(c) pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;
(d) letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation; Provided further that the client shall submit updated officially valid document with current address within a period of three months of submitting the above documents.”.
For the relevant gazette notification . CLICK HERE
.
Dated 23.10.2017 : Government has instructed banks and other financial institutions , through a Gazette notification , to verify copies of documents produced with originals and to record the same on the copy by the authorised officers . Hence customers , for the purpose of identity proof and address proof , have to produce original documents to the bankers and financial institutions along with copies of the documents . Bankers may return the originals after making note on the copies of the verification done .
Further Gazette notification permits banks to accept any of the following documents in cases where valid documents do not contain updated addresses for the limited purpose of address proof :
(a) utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
(b) property or Municipal tax receipt;
(c) pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;
(d) letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation; Provided further that the client shall submit updated officially valid document with current address within a period of three months of submitting the above documents.”.
For the relevant gazette notification . CLICK HERE
.
AADHAR IS MANDATORY FOR OPENING BANK ACCOUNTS AND TRANSACTIONS ABOVE RS 50,000
DATED 17.06.2017 : Government of India made Aadhar mandatory for opening accounts with banks and also conducting any transactions with banks for more than Rs 50,000. Those who have already bank accounts have to link them with their Aadhar numbers before 31st , Dec , 2017 , failing which accounts will become invalid .
If you do not hold Aadhar card , you have to at least submit proof of enrollment of Aadhar for opening the bank accounts and submit the Aadhar number within six months . Small accounts can be opened without Aadhar with bank branches having core banking only and such small account holders have to furnish their Aadhar numbers within 24 months . However such accounts will be monitored very closely by the authorities against any suspicious overseas money transfers . Small accounts are the Savings Bank accounts with less than a turn over of Rs 1.00 lakh in a year , less than withdrawals and transfers Rs 10,000 per month and balance not exceeding Rs 50,000 at any time . For corporate accounts , authorised signatories of the accounts have to produce their Aadhar numbers .
These rules are made effective through an amendment to The Prevention of Money Laundering ( Maintenance of Records ) Rules of 2005 .
NOTE :
1. Reports do not indicate effects of these amendments to opening and operation of Non Resident accounts in Banks
2. While PAN Number or Form 60 was necessary for conducting transactions above Rs 50, 000 earlier , now Aadhar is required in lieu .
3. With linking of Aadhar , PAN and Bank accounts , it will be easy to monitor high value financial transactions for the government .
DATED 17.06.2017 : Government of India made Aadhar mandatory for opening accounts with banks and also conducting any transactions with banks for more than Rs 50,000. Those who have already bank accounts have to link them with their Aadhar numbers before 31st , Dec , 2017 , failing which accounts will become invalid .
If you do not hold Aadhar card , you have to at least submit proof of enrollment of Aadhar for opening the bank accounts and submit the Aadhar number within six months . Small accounts can be opened without Aadhar with bank branches having core banking only and such small account holders have to furnish their Aadhar numbers within 24 months . However such accounts will be monitored very closely by the authorities against any suspicious overseas money transfers . Small accounts are the Savings Bank accounts with less than a turn over of Rs 1.00 lakh in a year , less than withdrawals and transfers Rs 10,000 per month and balance not exceeding Rs 50,000 at any time . For corporate accounts , authorised signatories of the accounts have to produce their Aadhar numbers .
These rules are made effective through an amendment to The Prevention of Money Laundering ( Maintenance of Records ) Rules of 2005 .
NOTE :
1. Reports do not indicate effects of these amendments to opening and operation of Non Resident accounts in Banks
2. While PAN Number or Form 60 was necessary for conducting transactions above Rs 50, 000 earlier , now Aadhar is required in lieu .
3. With linking of Aadhar , PAN and Bank accounts , it will be easy to monitor high value financial transactions for the government .
Savings Bank account for an individual is the basic account one needs to have for opening relationship with a bank . All scheduled banks offer the facility of a savings bank . If you approach any branch of a bank near to you , they will be happy to open n Savings Bank account for you . There are separate types of account for Residents and Non residents of India . For residents of India , Following types of account would be offered by most of the banks .
1. Simple Savings Bank a/c with complete KYC formalities.
2. Basic Savings Bank a/c with limited KYC formalities .
3. Premier Savings Bank a/c carrying additional features which also involve additional charges / specified minimum balances .
1. Simple Savings Bank a/c with complete KYC formalities.
2. Basic Savings Bank a/c with limited KYC formalities .
3. Premier Savings Bank a/c carrying additional features which also involve additional charges / specified minimum balances .
BENEFITS FOR ALL ACCOUNTS
1. Depositing of cash and other financial Instruments , withdrawal by way of cash , cheque.
2. Credit and debit through electronic modes.
3. Statement of Account / Passbook indicating the credits and debits to the account
4. ATM / Debit Card allowing specified free debits per month .
5. Interest on the balance maintained - rate of interest at the discretion of the bank
ADDITIONAL BENEFITS TO PREMIER ACCOUNTS OR TO ANY TYPE OF SAVINGS BANK ACCOUNT
These benefits are offered by individual banks either free or for a charge and bank may insist a minimum relationship
value either for savings bank account or for any other account maintained . Benefits vary from Bank to Bank
1. Depositing of cash and other financial Instruments , withdrawal by way of cash , cheque.
2. Credit and debit through electronic modes.
3. Statement of Account / Passbook indicating the credits and debits to the account
4. ATM / Debit Card allowing specified free debits per month .
5. Interest on the balance maintained - rate of interest at the discretion of the bank
ADDITIONAL BENEFITS TO PREMIER ACCOUNTS OR TO ANY TYPE OF SAVINGS BANK ACCOUNT
These benefits are offered by individual banks either free or for a charge and bank may insist a minimum relationship
value either for savings bank account or for any other account maintained . Benefits vary from Bank to Bank
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FAQ ON kYC
Reserve Bank of Inda has clarified on some of the frequently asked questions on KYC ( Know your Customer ) guidelines . Please click here to read those answers
