StatutesBanking and Finance
  • Attention of Authorised Dealer Category – I (AD Category – I) banks is invited to A.P. (...DIR Series) Circular No.10 dated July 11, 2022, in terms of which an additional arrangement has been put in place for invoicing, payment, and settlement of exports/imports in INR through Special Rupee Vostro Accounts of the correspondent bank/s of the partner trading country maintained with AD Category-I banks in India. Further, attention of AD Category-I banks is invited to Para 4.1 of circular DOR.CRE.REC.23/21.08.008/2022-23 dated April 19, 2022 on Opening of Current Accounts and CC/OD Accounts by Banks. In terms of this provision and in order to provide greater operational flexibility to the exporters, AD Category-I banks maintaining Special Rupee Vostro Account as per the provisions of the Reserve Bank circular dated July 11, 2022 referred above are permitted to open an additional special current account for its exporter constituent exclusively for settlement of their export transactions. show more

    Nov 17, 2023
  • RBI has taken steps to address the rapidly expanding consumer credit market and the growing rel...iance from NBFCs upon bank loans. Governor Vaibhav Chaturvedi emphasised in an announcement on November 16, 2023, the necessity for banks and NBFCs to fortify their internal monitoring systems and tackle any hazards. Commercial Banks Risk to Consumer loans: The risk weight was raised to 125% by 25 percentage points. Not applicable to home loans, school loans, auto loans, or loans backed by gold or gold jewellery. The Credit Risk of NBFCs: With the exception of a few categories, the potential risk factor for credit to consumer’s exposure raised to 125% overall retail loans. Card Receivable: The scheduled commercial banks' (SCBs') risk weight on credit card receivables has raised to 150%, while NBFCs' risk weight is now 125%. Bank Lending to NBFCs: Where the current risk weight is less than 100%, the risk weights for SCBs' holdings to NBFCs raised by 25 percentage points. Loans to NBFCs and Housing Finance Company that qualify for priority sector designation are excluded. show more

    Nov 16, 2023
  • Definitions of PA-CBs, permission specifications, and guidance for imports and  exports along w...ith  simultaneous import-export PA-CBs are provided in the RBI bulletin. It requires compliance with net worth standards, outlining minimum values and adherence timelines. The management of Export Collection Account and Import Collection Account with approved banks is also covered in the circular. In addition, it covers the finalisation of payments in both foreign currencies and Indian Rupees, emphasising the need of precautionary measures for merchants. The circular outlines approved payment methods and offers guidelines for acceptable debits as well as credits from accounts in escrow. show more

    Oct 31, 2023
  • On June 26, the RBI released a master instruction on Minimal Capital Standards for Operational Risk,... requiring for a specific financial institution to have enough required regulatory capital to cover its operational risk exposures. The new Standardised Approach will replace all current methods, including the Basic Indicator, Alternative Standardised or The Standardised and Advanced Measurement Approach, for calculating the minimal risk-based capital requirements once these directives take effect. show more

    Jun 26, 2023
  • The Reserve Bank released data on the performance of the private corporate sector during the fourth ...quarter of 2022-23 drawn from abridged quarterly financial results of 2,774 listed non-government non-financial companies. Sales growt of listed private non-financial companies moderated to 8.0 per cent in Q4:2022-23 from 12.7 per cent in the previous quarter and 22.3 per cent in Q4 of the previous year.  In terms of expenditure, Staff cost rose by 11.3 per cent, 18.2 per cent and 15.4 per cent, on y-o-y basis, for manufacturing, IT and non-IT services companies, respectively; the staff cost to sales ratio remained stable across the sectors. Interest coverage ratio (ICR)1 of manufacturing companies improved to 7.4 during Q4:2022-23 from 6.3 in the previous quarter; ICR of non-IT services companies improved for the second successive quarter, but remained relatively low at 1.7. Operating profit of manufacturing, IT and non-IT services companies rose by 1.4 per cent, 10.5 per cent and 25.1 per cent, respectively, on a y-o-y basis, and their operating profit margin stood at 14.3 per cent, 22.3 per cent and 22.3 per cent, respectively, in Q4:2022-23 show more

    Jun 15, 2023
  • Government of India, vide its Notification No F.No 4.(6) - B(W&M)/2023 dated June 14, 2023, has ...announced Sovereign Gold Bond Scheme 2023-24. Under the Scheme, there will be a distinct series (starting from series I) which will be indicated on the Bond issued to the investor. First is 2023-24 Series I for which the date of subscription is between June 19 – June 23, 2023 and the date of issuance will be  June 27, 2023. Second series is 2023-24 Series II for which the date of subscription will be September 11 – September 15, 2023 and the date of issuance will be September 20, 2023. show more

    Jun 15, 2023
  • Since certain transactions related to collection of indirect taxes through ICEGATE (CEP) payment gat...eway are now being reported by agency banks to Mumbai Regional Office (MRO), RBI with effect from April 01, 2023, it has been decided to modify paragraph 21 of the aforesaid Master Circular. Agency banks are required to submit their claims for agency commission in the prescribed format to CAS Nagpur in respect of Central government transactions and the respective Regional Office of Reserve Bank of India for State government transactions. However, agency commission claims pertaining to GST receipt transactions, transactions related to direct tax collection under TIN 2.0 regime, and transactions pertaining to collection of indirect taxes through ICEGATE payment gateway reported to Mumbai Regional Office, RBI will be settled at Mumbai Regional Office of Reserve Bank of India only and accordingly all agency banks, authorized to collect GST, direct tax collection under TIN 2.0 and indirect taxes through ICEGATE payment gateway, are advised to submit their agency commission claims pertaining to the respective receipt transactions at Mumbai Regional Office only. The agency commission claim for Central Government transactions reported to CAS, Nagpur, RBI will be continued to be settled at CAS, Nagpur, RBI.   show more

    Jun 14, 2023
  • The RBI Press Release “Recommendations of the Working group on Digital Lending – Impleme...ntation” dated August 10, 2022 in terms of which it was stated that the recommendation pertaining to First Loss Default Guarantee (FLDG) was under examination with the Reserve Bank. 2. Arrangements between Regulated Entities (REs) and Lending Service Providers (LSPs) or between two REs involving default loss guarantee (DLG), commonly known as FLDG, has since been examined by the Bank and it has been decided to permit such arrangements subject to the guidelines. DLG arrangements conforming to these guidelines shall not be treated as ‘synthetic securitization’ and/or shall also not attract the provisions of ‘loan participation’. show more

    Jun 08, 2023
  • The Reserve Bank of India has issued various instructions to regulated entities (REs) regarding comp...romise settlements in respect of stressed accounts from time to time, including the Prudential Framework for Resolution of Stressed Assets dated June 7, 2019 (“Prudential Framework”), which recognizes compromise settlements as a valid resolution plan. With a view to provide further impetus to resolution of stressed assets in the system as well as to rationalize and harmonies the instructions across all REs, as announced in the Statement on Developmental and Regulatory Policies released on June 8, 2023, it has been decided to issue a comprehensive regulatory framework governing compromise settlements and technical write-offs covering all the Res. show more

    Jun 08, 2023
  • A reference is made to the circular on the revised criteria for classifying a UCB as Financially Sou...nd and Well Managed (FSWM) issued by RBI vide circular DOR.REG.No.85/07.01.000/2022-23 dated December 01, 2022 on “Review of norms for classification of Urban Co-operative Banks (UCBs) as Financially Sound and Well Managed (FSWM)”. In order to rationalize the process of branch opening and to enable the UCBs to tap growth opportunities in the sector, it has been decided to grant general permission for branch expansion in the approved area of operation to financially strong UCBs. This is as per the Revised Regulatory Framework for Urban Co-operative Banks (UCBs) released by RBI on July 19, 2022 based on the recommendation of the Expert Committee on Primary (Urban) Co-operative Banks. show more

    Jun 08, 2023
  • As per the extant regulatory framework, AD Cat-I banks operating International Financial Services Ce...ntre (IFSC) Banking Units (IBUs) are permitted to offer non deliverable derivative contracts (NDDCs) to persons resident outside India. Such derivatives are cash-settled in foreign currency. It states that AD Cat-I banks operating IBUs to offer NDDCs involving INR to resident non-retail users for the purpose of hedging. Such transactions shall be cash settled in INR and  the flexibility of cash settlement of NDDCs transactions between two AD Cat-I banks, and between an AD Cat-I bank and a person resident outside India in INR or any foreign currency show more

    Jun 06, 2023
  • MEA, Government of India has informed about the UNSC press release SC/15309 dated June 05, 2023 wher...ein the Security Council Committee pursuant to resolutions 1267 (1999), 1989 (2011) and 2253 (2015) concerning ISIL (Da’esh), Al-Qaida and associated individuals, groups, undertakings and entities, removed the below mentioned entries from the ISIL (Da’esh) and Al-Qaida Sanctions List after concluding its consideration of the de-listing requests for these names submitted through the Office of the Ombudsperson established pursuant to Security Council resolution 1904 (2009), and of the Comprehensive Reports of the Ombudsperson on these de-listing requests. Therefore, the assets freeze, travel ban and arms embargo set out in paragraph 1 of Security Council resolution 2610 (2021) and adopted under Chapter VII of the Charter of the United Nations no longer apply to the names set out under entry QDi.379 and QDi.381 in respect to Section 51A of the Unlawful Activities (Prevention) (UAPA) Act, 1967. show more

    Jun 06, 2023
  • MEA, Government of India has informed about the UNSC press release SC/15307 dated June 02, 2023 wher...ein the Security Council Committee pursuant to resolutions 1267 (1999), 1989 (2011) and 2253 (2015) concerning ISIL (Da’esh), Al-Qaida and associated individuals, groups, undertakings and entities enacted the amendments specified with strikethrough and/or underline in the entry below on its ISIL (Da’esh) and Al-Qaida Sanctions List of individuals and entities subject to the assets freeze, travel ban and arms embargo set out in paragraph 1 of Security Council resolution 2610 (2021), and adopted under Chapter VII of the Charter of the United Nations in respect to Section 51A of the Unlawful Activities (Prevention) (UAPA) Act, 1967. show more

    Jun 05, 2023
  •   In continuation to our circular DCM (Plg) No.S-236/10.27.00/2023-24 dated May 19, 2023 on ...the captioned subject, it is advised as the facility of exchange of ₹2000 banknotes across the counter shall be provided to the public in the usual manner, that is, as was being provided earlier.  Banks are advised to provide appropriate infrastructure at the branches such as shaded waiting space, drinking water facilities, etc. considering the summer season. Banks shall maintain daily data on deposit and exchange of ₹2000 banknotes in the format given.   show more

    May 22, 2023
  • The Ministry of Micro, Small and Medium Enterprises (‘MSME’), Government of India has la...unched the Udyam Assist Platform (UAP) to facilitate formalisation of Informal Micro Enterprises (IMEs) through online generation of Udyam Assist Certificate. The Government of India, vide Gazette Notification S.O. 1296(E) dated March 20, 2023, has specified that the certificate issued on the UAP to IMEs shall be treated at par with Udyam Registration Certificate for the purpose of availing Priority Sector Lending  benefits. Further, GOI has clarified to RBI that IMEs are those enterprises which are unable to get registered on the Udyam Registration Portal (URP) due to lack of mandatory required documents such as PAN or GSTIN are unable to avail the benefits of Government schemes or programmes. Also, it has been clarified that the turnover of enterprises exempted from filing returns under the provisions of the Central Goods and Services Tax Act, 2017 shall be the sole criterion to be defined as IMEs for the purpose of UAP. Accordingly, IMEs are those enterprises that are not covered in the Goods and Services Tax regime. show more

    May 09, 2023

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