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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 .

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 

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 

 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 

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.  

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 

New  Updated Article 
            
 TAX PLANNING FOR FY 2021-22 ( AY 2022-23 ) 
Comprehensive   Article on Income tax changes in Rules, Rates , Slabs , Rebates  and Estimation 

CLICK HERE TO READ ​

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:

1. It will no longer be necessary for a complainant to identify under which scheme he/she should file complaint with the Ombudsman.
2. 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”.
3. The Scheme has done away with the jurisdiction of each ombudsman office.
4. 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.
5. 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.
6. 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.

5. The Executive Director-in charge of Consumer Education and Protection Department of RBI would be the Appellate Authority under the Scheme.
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

 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  . ​

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 

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   
​

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 –

1. UAE Exchange and Financial Services Limited
2. The Repatriates Cooperative Finance and Development Bank Limited (REPCO Bank)
3. Chaitanya India Fin Credit Private Limited
4. Shri Pankaj Vaish and others

In " on-tap " licensing   . an applicant can apply to RBI on any time .  The applications will go through the following   procedure before they get a licence by RBI : ​

• 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,

(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.  

​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 

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 . 

 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 

 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   . 

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 

 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.

 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 

 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 . 

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 ​

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 

 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 

:  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  . 

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 

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 .  

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 

 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 

    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 ? 

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 . 

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

   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

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 

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 . 

  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 

 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  

 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  . 

   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 . 

 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 

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  

 

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 

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.  

 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 ​

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 

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 ​  

 .

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 . 
 ​

 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 . 

  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 

WHAT IS NEW ON PLAN N PROGRESS ?      ​

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