Banking Made Easy: Vision

Banking Made Easy
VISION
A QUICK BOOK ON LATEST RBI POLICIES
SUMMARY OF RBI GUIDELINES (01.01.2016-31.12.2019)
(Very useful books for all Banking knowledge based Examinations)
Compiled by
Sanjay Kumar Trivedy
Chief Manager, Canara Bank, Gandhinagar, Nagpur (Maharashtra)
Preface
Dear Friends,
Indian Banking is in its most exciting phase. The impact of liberalization has been
widespread and has thrown up both challenges and opportunities for bankers. Ever
increasing competition is a part of professional life and the banker who is ahead of his peers
in terms of knowledge, skill, technology and quick response will be the winner.
Banking/Financial sector in our country is witnessing a sea change and banker’s business has
become more complex and difficult in this knowledge driven era.
An official working in the Banking sector has to keep pace with the updated knowledge, skills
& attitude, as the same is required everywhere. Employees play vital role in Banking/service
organizations and they need to be transformed into Knowledge Assets to remain competitive
in the dynamic environment and it is more so with Banks as they are very service sensitive.
Thus, it is imperative for the bank staff to serve the clientele with updated information of
bank's products & services to accomplish corporate objectives.
This book titled“BANKING MADE EASY: DARPAN– RBI POLICIES (01.01.2016 to 31.12.2019)”
has many unique features to its credit & consists of all topics required for day today Banking
and Knowledge based Examinations related to banking with clear concept & simple language.
This Book is divided into different chapters namely Various Act/Laws related to banking,
Customer of the Bank, Priority sector Advance, Basel & Risk Mgmt, Digital Banking, Forex,
NPA & Recovery Mgmt etc.and separate chapter on One Liner Expected Questions- Answers
are given based on these latest changes. It has been seen that last so many years in
Promotion Test & other knowledge based Examination/Interview,nearly 60-70% questions are
asked from latest policies & guidelines of RBI and in this regard this book is of immense use
for all knowledge based examinations.
All possible care is taken to provide error free information, however, readers may note that
the information given herein is merely for guidance and they need to refer the relevant
circulars, Directions & Manuals for full details.
During preparation of this book, I received tremendous support and inspirations from
colleagues & Friends and special thanks to our colleagues Miss Mohini Gosavi (SWO-107857)
and Miss Mukta Ambekar (SWO-90845) of our Gandhinagar, Nagpur (0265) for their great
efforts and support in compilation of this book.
All possible care is taken to provide error free information, however, readers may note that
the information given herein is merely for guidance/reference and they need to refer the
relevant circulars & Manuals for full details.
I solicit your views on the content and quality of the topics for further improvement.I
wishes all the best to the readers of this book.
Arise, Awake and stop not till the goal is reached"... Swami Vivekananda
Date: 06.01.2020 Sanjay Kumar Trivedy
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 1 | P a g e
About the Author
Mr. Sanjay Kumar Trivedy (Native: Motihari, Bihar), Presently working as Chief Manager(
Scale-IV) in Canara Bank, Gandhinagar branch, Nagpur,Maharashtra state. He Joined
Canara Bank as DRO/PO (AEO) on 10.03.1997 and and worked in various places, starting from
Maujgarh branch (1997-2000), Near Abohar(Punjab), Sirsa Main- Haryana (2000-2004), BMC,
Jalandhar (2004-2006) Toiladungari, Sakchi, Jamshedpur(2006-2009), Jhalak near Chaibasa
(2009-2011), J B Nagar, Andheri East , Mumbai ( 2011-2013) and then Faculty as well as
College in charge ( Principal ) in Regional Staff Training College, Mumbai (2013-2016),
Govt.Link Cell, Nagpur (01.05.2016 to 15.07.2017), Itwari Branch, Nagpur ( 17.07.2017 to
15.09.2017 ), Shrigonda Branch (16.09.2017 to 07.07.2018), Chatigali, Solapur ( 08.07.2018
to 27.05.2019) and then Gandhinagar,Nagpur (Since 28.05.2019 to …). He won more than 232
awards in various fields of Banking by his Bank – Canara Bank, which includes twice gold coin
for CASA mobilization. His best achievement was as an officer/AEO, he converted his
Section: Agril Finance into Hi-tech Agril. Branch at BMC, Jalandhar and while working in
Jhalak branch near Chaibasa (Jharkhand), won twice best Rural banker award from NABARD
during 2009-10 &2010-11 in SHG credit linkage & Farmers Club Formation. During this
journey started from 1997 to till date he worked in almost all area of Banking.
Mr. Sanjay Kumar Trivedy is M.Sc. (Agril), CAIIB, PGDCA, MBA, MBA (Finance),Diploma (IIBF)
in Rural Banking, Treasury, Investment and Risk Management, Commodity Derivatives for
Bankers, Advanced Wealth Management, Certificate (IIBF) in Trade Finance, Certificate in
Anti-Money Laundering / Know Your Customer, Certificate Examination in SME Finance for
Bankers, Certificate Examination in Customer Service & Banking Codes and Standards,
Certificate Examination in CAIIB - Elective Subjects ( Retail Banking & Human Resource
Management) & Certificate Examination in Microfinance
Mr. Sanjay Kumar Trivedy has teaching experience of more than 16 years, from Sirsa Main
Branch (2000-2004) , he started teaching to his colleagues/staff and in this long journey he
has given good results both in Promotion test as well as JAIIB /CAIIB examination. He has
taken IIBF-JAIIB & CAIIB classes at Mumbai. He has compiled/authored more than 20 books in
last three years related banking - JAIIB, CAIIB, Book on Promotion Test ( all cadres),
Interview , Drishti (Current Banking Topics –Interview book for Scale iv & above), Group
Discussion, Certificate course on Customer Service & BCSBI, AML& KYC, MSME Finance for
Bankers, Book on Abroad Posting, Confirmation Test for PO, Banking & Technology and many
more books on day today banking and many more in the offing.
Mr. Sanjay Kumar Trivedy is working in a mission mode to reduce knowledge gap among
bankers with objective to provide educational support free of cost to all in general and
bankers in particular with objective to empower Banker colleagues specially young banker
who join the bank in last more than one decade for their better productivity, Sense of
satisfaction, Customer delight with ultimate increase of quality banking business for their
organisations.
He can be contacted only through msg on whatsapp no. : 9987519725
Infuse your life with action. Don't wait for it to happen. Make it happen. Make your own future. Make
your own hope. Make your own love. And whatever your beliefs, honor your creator, not by
passively waiting for grace to come down from upon high, but by doing what you can to make grace
happen... yourself, right now, right down here on Earth – Bradley Whiteford
INDEX
CONTENTS Page No.
SI. No
1 VARIOUS LAWS RELATED TO BANKING 4
2 LOANS & ADVANCES 12
3 PRIORITY SECTOR LENDING 15
4 BASEL & RISK MANAGEMENT 22
5 NPA & RECOVERY MANAGEMENT 26
6 FOREX & INTERNATIONAL TRADE 28
7 DIGITAL BANKING 35
8 GENERAL BANKING 44
9 CURRENT BANKING, FINANCE & ECONOMY 54
10. ONE LINER QUES-ANS ON RBI POLICIES -2019 59
11. ONE LINER QUES-ANS ON RBI POLICIES -2016-18 70
SUMMARY OF RBI GUIDELINES (01.01.2016- 31.12.2019)
1. BANKING RELATED LAWS/ACTS

RBI reduces repo rate by 25 basis points in 4th Bimonthly Monetary Policy and no changes in 5th
Bimonthly MPC on 05.12.19 : In its 4th Bi-monthly Monetary Policy Committee meeting, the Reserve
Bank of India has reduced the policy repo rate by 25 basis points (bps). The MPC has also decided to
maintain the accommodative stance of monetary policy. The main decisions taken in the 4th Bi-monthly
Monetary Policy Committee meeting are: The repo rate under the liquidity adjustment facility (LAF) was
reduced from 5.40% to 5.15%. The reverse repo rate under the LAF stands revised to 4.90%. Hence, total
The repo rate cut during 2019 is 1.35%. The marginal standing facility (MSF) rate and the Bank Rate is
revised to 5.40%. RBI has also reduced the real GDP growth for 201920 from 6.9% to 6.1%.RBI to transfer
Rs 1.76 lakh crore to government
POLICY RATES Wef 04.10.2019 Wef 05.12.2019
CRR 4.00% (15.02.2013) 4.00% (15.02.2013)
SLR 18.50% (12.10.2019) 18.25% (04.01.2020)
Overnight LAF (of NDTL) 0.25% 0.25%
14-days term Repo(of NDTL) 0.75% 0.75%
LAF/REPO RATE 5.15% 5.15%
Reverse REPO 4.90% 4.90%
MSF/Bank Rate 5.40% 5.40%
Maintenance of SLR
As annonced by RBI on 05.12.18, RBI decided to reduce the SLR requirement of banks by 25 basis points
every calendar quarter from 19.50 per cent of of their Net Demand and Time Liabilities (NDTL) to: (i)
19.25 per cent from January 5, 2019 (ii) 19.00 per cent from April 13, 2019 (iii) 18.75 per cent from July
6, 2019 (iv) 18.50 per cent from October 12, 2019 (v) 18.25 per cent from January 4, 2020 (vi) 18.00 per
cent from April 11, 2020.
The Reserve Bank of India has given its approval to transfer a sum of Rs 1,76,051 crore to the
Government of India, comprising of Rs 1,23,414 crore of surplus for the year 2018-19 and Rs 52,637 crore
of excess provisions identified as per the revised Economic Capital Framework. The panel was led by
former RBI Governor Bimala Jalan.
RBI RATE OF INTEREST ON FLOATING RATE BONDS The rate of interest on the Floating Rate Bonds,
2020 (FRB 2020) applicable for the half year December 21, 2019 to June 20, 2020 shall be 5.15% per
annum. It may be recalled that the rate of interest on FRB, 2020 is set at the average (rounded off to
two decimal places) of implicit yields at the cut-off prices, of the last three auctions of GoI182 day
Treasury Bills, held up to period preceding the coupon reset date, which is December 21, 2019. The
implicit yields will be computed by reckoning 365 days in a year. The coupon rate has been fixed
accordingly.
FINANCIAL BENCHMARK ADMINISTRATORS RBI has notified benchmarks administered by Financial
Benchmarks India Pvt. Ltd. (FBIL) as a ‘significant benchmark’ as under: Overnight Mumbai Interbank
Outright Rate (MIBOR) Mumbai Interbank Forward Outright Rate (MIFOR) USD/INR Reference Rate
Treasury Bill Rates Valuation of Government Securities Valuation of State Development Loans (SDL)
Further, in terms of paragraph 3(ii) of the above directions, the person administering the ‘significant
benchmark’, shall make an application to the Reserve Bank within a period of three months from the
date of this notification for authorization to continue administering these benchmarks.
CREDIT GUARANTEE SCHEME FOR PSUs: Union Cabinet has approved a partial credit guarantee scheme
for public sector banks to purchase high rated pooled assets from financially sound NBFCs. PSBs can
purchase high rated pooled assets from financially sound NBFCs/Housing Finance Companies. a) The
amount of overall guarantee will be limited to first loss of up to 10 per cent of fair value of assets being
purchased by the banks under the Scheme, or Rs. 10,000 crore, whichever is lower. b) The scheme would
cover NBFCs / HFCs that may have slipped into SMA-0 category during the one year period prior to
1.8.2018. c) The minimum rating of the underlying asset pool being purchased by PSBs has been revised
from the existing "AA" to "BBB+" The government expects that the move help address NBFCs/HFCs resolve
their temporary liquidity or cash flow mismatch issues.
RBI STARTS ‘ON TAP’ LICENSING FOR SFBs: The RBI has released guidelines for ‘on tap’ licensing of
Small Finance Banks in the private sector. Existing payments banks (PBs), which have completed five
years of operations, are eligible for conversion into small finance banks. The preference will also be
given to those applicants who plan to set up the bank in under-banked states/districts, such as in the
North-East, East and Central regions of the country. The minimum capital for setting up an SFB has been
mandated at Rs.200 crores. However, the primary (urban) co-operative banks (UCBs), which wish to
become SFBs, the initial requirement of net worth will be Rs.100 crores, which will have to be increased
to Rs.200 crores within five years from the date of commencement of business. With this ‘on tap’
facility, the RBI will now accept applications and grant licenses for SFBs throughout the year, in contrast
to the erstwhile guidelines where the application window was open until 16 January 2015.
LONGER TERM VARIABLE RATE REVERSE REPO AUCTIONS IN NOVEMBER 2019 The RBI monitors the
system liquidity on an ongoing basis and conducts liquidity management operations based on an
assessment of the evolving liquidity conditions and the requirements of the system. It has been noticed
by RBI, since the surplus liquidity conditions are expected to continue for some time, it would be
necessary to absorb part of the surplus liquidity for a slightly longer duration, while continuing to meet
the durable liquidity requirements for the FY 2019-20 on a consistent basis. The internal working group
of RBI mandated to review the current liquidity management framework had recommended longer term
repo operations at market related rates to augment the toolkit for liquidity management operations.
REGULATORY AND SUPERVISORY FRAMEWORK FOR CORE INVESTMENT COMPANIES (CIC) RBI
constituted a Working Group (WG) has submitted its report to the Governor. The key recommendations of
the WG headed by Sh. Tapan Ray are as under: a) Capital contribution by a CIC in a step-down CIC, over
and above 10% of its owned funds, should be deducted from its Adjusted Networth, as applicable to other
NBFCs. Further, step-down CICs may not be permitted to invest in any other CIC, while allowing them to
invest freely in other group companies; b) The number of layers of CICs in a group should be restricted to
two. As such, any CIC within a group shall not make investment through more than a total of two layers
of CICs, including itself; c) Every Group having a CIC should have a Group Risk Management Committee
(GRMC); d) Constitution of the Board level committees viz., Audit Committee and Nomination and
Remuneration Committee should be mandated ; e) Offsite returns may be designed by the Reserve Bank
and may be prescribed for the CICs on the lines of other NBFCs. Annual submission of Statutory Auditors
Certificates may also be mandated; and Onsite inspection of CICs may be conducted periodically.
Definition of CIC: A Core Investment Company (CIC) is a Non-Banking Financial Company (NBFC) which
carries on the business of acquisition of shares and securities and holds not less than 90% of its net assets
in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group
companies.
Lending by banks to InvITs As per RBI circular dated 18.04.17, banks can BANKING POLICY invest in units
of InvITs subject to the specified conditions. Banks and other stakeholders have been seeking clarity on
provision of credit facilities to InvITs. RBI examined and decided (14.10.19) that banks can lend to InvITs
subject to the following conditions: i) Banks shall put in place a Board approved policy on exposures to
InvITs which shall inter alia cover the appraisal mechanism, sanctioning conditions, internal limits,
monitoring mechanism, etc. ii) Without prejudice to generality, banks shall undertake assessment of all
critical parameters including sufficiency of cash flows at InvIT level to ensure timely debt servicing. The
overall leverage of the InvITs and the underlying SPVs put together shall be within the permissible
leverage as per the Board approved policy of the banks. Banks shall also monitor performance of the
underlying SPVs on an ongoing basis as ability of the InvITs to meet their debt obligation will largely
depend on the performance of these SPVs. As InvITs are trusts, banks should keep in mind the legal
provisions in respect of these entities especially those regarding enforcement of security. iii) Banks shall
lend to only those InvITs where none of the underlying SPVs, which have existing bank loans, is facing
‘financial difficulty’. iv) Bank finance to InvITs for acquiring equity of other entities shall be subject to
the conditions. v) The Audit Committee of the Board of banks shall review the compliance to the above
conditions on a half yearly basis.
Large Exposures Framework As per RBI circular dated 03.06.19, on “Large Exposures Framework (LEF)”,
banks’ exposures to a single NBFC is restricted to 15 percent of their available eligible capital base,
while general single counterparty exposure limit is 20 percent, which can be extended to 25 percent by
banks’ Boards under exceptional circumstances. RBI decided (12.09.19) that a bank’s exposure to a single
NBFC (excluding gold loan companies) will be restricted to 20 percent of that bank’s eligible capital
base.
AMENDMENT TO KYC – AADHAR -Government. of India, on Feb 13, 2019 had notified amendments to
the Prevention of Money-laundering (Maintenance of Records) Rules, 2005. Further, an Ordinance,
“Aadhaar and other Laws (amendment) Ordinance, 2019”, was notified by the Government amending,
inter alia, the Prevention of Money Laundering Act, 2002. Accordingly, following amendments have been
made in KYC Directions by RBI, on 29.05.19: a) Banks can carry out Aadhaar authentication/ offline-
verification of an individual who voluntarily uses his Aadhaar number for identification purpose. (Section
16 of the amended MD on KYC) b) ‘Proof of possession of Aadhaar number’ has been added to the list of
Officially Valid Documents (OVD) with a proviso that where the customer submits ‘Proof of possession of
Aadhaar number’ as OVD, he may submit it in such form as are issued by the Unique Identification
Authority of India (UIDAI). (Section 3 of the amended MD) c) For customer identification of “individuals”:
i. For individual 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, the
bank shall obtain the customers Aadhaar and may carry out its e-KYC authentication based on his
declaration that he is desirous of receiving benefit/subsidy under the Aadhaar Act, 2016. (Section 16 of
the amended MD)
ii. For non-DBT beneficiary customers, the Regulated Entities (REs) shall obtain a certified copy of any
OVD containing details of his identity and address along with one recent photograph. (Section 16 of the
amended MD) d) REs shall ensure that the customers (non-DBT beneficiaries) while submitting Aadhaar
for Customer Due Diligence, redact or blackout their Aadhaar number in terms of sub-rule 16 of Rule 9 of
the amended PML Rules.(Section 16 of the amended MD) e) REs other than banks may identify a customer
through offline verification under the Aadhaar Act with his/her consent. (Section 16 of the amended MD)
f) In case OVD furnished by the client does not contain updated address, certain deemed OVDs for the
limited purpose of proof of address can be submitted provided that the OVD updated with current
address is submitted within 3 months. (Section 3(a) ix of the amended MD) g) For non-individual
customers, PAN/Form No. 60 of the entity (for companies and Partnership firms – only PAN) shall be
obtained apart from other entity related documents. The PAN/Form No. 60 of the authorised signatories
shall also be obtained.(Section 30-33) h) For existing bank account holders, PAN or Form No. 60 is to be
submitted within such timelines as may be notified by the Government, failing which account shall be
subject to temporary ceasing till PAN or Form No. 60 is submitted. However, before temporarily ceasing
operations for an account RE shall give the customer an accessible notice and a reasonable opportunity
to be heard.(Section 39 of the amended MD).
SAFE CUSTODY OF RBI’s GOLD RESERVES  Certain sections of the print and social media had reported
about RBI shifting abroad a part of its gold holding in 2014.  The Reserve Bank has clarified that the
gold reserves being maintained by it are in safe custody and no gold was shifted by the RBI from India to
other countries in 2014 or thereafter.  The media reports are factually incorrect. It is a normal practice
for Central Banks world over, to keep their gold reserves overseas with Central Banks of other countries
like Bank of England for safe custody.
RBI KEHTA HAI As part of its latest awareness initiative, RBI has come out with a series of awareness
messages thru ‘RBI Kehta Hai’. The latest is on the theme of Banking Ombudsman to make people aware
of the various grievance redressal mechanisms available to them as Bank Customers
Legal Entity Identifier Code for participation in non-derivative markets The Legal Entity Identifier (LEI)
code has been conceived of, as a key measure to improve the quality and accuracy of financial data
systems for better risk management, post the Global Financial Crisis. The LEI is a 20-character unique
identity code assigned to entities who are parties to a financial transaction. Globally, use of LEI has
expanded beyond derivative reporting and it is being used in areas relating to banking, securities market,
credit rating, market supervision. In India, the LEI system has been implemented in a phased manner for
participants (other than individuals) in the over-the-counter markets for rupee interest rate derivatives,
foreign currency derivatives and credit derivatives in India and for large corporate borrowers of banks.
On 29.11.18, RBI proposed to implement the LEI mechanism for all financial market transactions
undertaken by non-individuals in interest rate, currency or credit markets regulated.All participants, other
than individuals, undertaking transactions in the markets regulated by RBI viz., Government securities markets,
money markets (markets for any instrument with a maturity of one year or less) and non-derivative forex markets
(transactions that settle on or before the spot date) shall obtain Legal Entity Identifier (LEI) codes by the due date
indicated in the schedule. Only those entities that obtain an LEI code on or before the due dates applicable to them
shall be able to undertake transactions in these financial markets after the due date, either as an issuer or as an
investor or as a seller / buyer. Transactions undertaken on recognized stock exchanges are outside the purview of
the LEI requirement. Entities responsible for executing transactions, reporting or for depository functions in these
markets, shall capture the LEI code of the transacting participants in their systems. Entities can obtain LEI from
any of the Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF). In
India LEI code may be obtained from Legal Entity Identifier India Ltd. (LEIL).
Entities undertaking financial transactions shall ensure that their LEI code is considered current under the
rules of the Global LEI System. Lapsed LEI codes shall be deemed invalid for transactions in markets regulated
by RBI.
The previous implementation time deadline has been extended on 27.04.19 RBI as under:
Phase-1 : Entities with net worth of above Rs.10000 million by 31.12.2019
Phase-2 : Entities between Rs.2000 million and Rs.10000 million by 31.12.19
Phase-3: Entities with net worth up to Rs.2000 Millions by 31.03.20.
Ombudsman Scheme for Non-Banking Financial Companies, 2018
On 23.02.2018, RBI had implemented the Ombudsman Scheme for Non-Banking Financial Companies (NBFCs)
as defined in Section 45-I(f) of the Reserve Bank of India Act, 1934 and registered with the RBI under Section
45-IA of the Reserve Bank of India Act, 1934 which are authorised to accept deposits. The Scheme was to be
extended to remaining identified categories of NBFCs based on experience gained. In partial modification of
the Notification, RBI directed that the Non-banking Financial Companies, as defined in Section 45-I(f) of the
Reserve Bank of India Act, 1934 and registered with the RBI under Section 45-IA of the Reserve Bank of India Act,
1934 which (a) are authorised to accept deposits; (b) are Non-Deposit Taking Non-Banking Financial Companies
having customer interface, with assets size of Rupees 100 crore or above, as on the date of the audited balance
sheet of the previous financial year, or of any such asset size as the RBI may prescribe, will come within the
ambit, and shall comply with the provisions of the Ombudsman Scheme for Non-Banking Financial Companies,
2018. w.e.f. 26.04.2019. The Non-Banking Financial Company Infrastructure Finance Company (NBFC-IFC),Core
Investment Company (CIC), Infrastructure Debt Fund-Non-Banking Financial Company (IDF-NBFC) and an NBFC
under liquidation, are excluded from the ambit of the Scheme.
The Scheme will continue to be administered from the offices of the Non-Banking Financial Companies
Ombudsman in four metro centers viz. Chennai, Kolkata, Mumbai and New Delhi for handling complaints from
the respective zones, so as to cover the entire country. 4. The extension of the Scheme to eligible Non-
Deposit Accepting Non-Banking Financial Companies shall come into effect and force from April 26, 2019.
Review of Instructions on Bulk Deposit -In terms of extant instructions of RBI, banks have been given
discretion to offer differential rate of interest (DRI) on the bulk deposits as per their requirements and
Asset-Liability Management (ALM) projections. In its February 2019 policy review, RBI decided to revise the
definition of ‘bulk deposits’ and provide operational freedom to banks in raising these deposits.
Accordingly on 22.02.19, RBI issued the following changes: Bulk deposit would mean single Rupee term
deposits of Rs.2 cr and above for Scheduled commercial Banks (excluding Regional Rural banks) and Small
Finance Banks. The banks shall maintain the bulk deposit interest rate card in their Core banking system
to facilitate supervisory review.
Special Deposit Scheme (SDS)-1975 -Payment of interest for calendar year 2018 RBI informed banks that
gazette notifications related to interest rates for SDS 1975 are available in Government of India website
viz. egazette.nic.in which can be perused for guidance. Banks have been advised on 06.12.18, to ensure
that interest for the calendar year 2018 for SDS 1975 is disbursed to the account holders as per the rates
mentioned in the gazette. RBI further added that interest for the calendar year 2018 may be disbursed to
the SDS account holders preferably through electronic mode on January 01, 2019 itself.
RBI Vision 2022 (Utkarsh 2022)

RBI released Utkarash 2022, its vision documentduring July 2019. It provides information about, what
RBI's plans for future. A summary is provided. Mission: To promote the economic and financial well-being
of the people of India in terms of price and financial stability; fair and universal access to financial
services; and a robust, dynamic and responsive financial intermediation infrastructure.
Core Purpose : 1. To foster confidence in the internal and external value of the Rupee and contribute to
macro-economic stability 2. To regulate markets and institutions under its ambit, to ensure financial
system stability and consumer protection, 3. To promote the integrity, efficiency, inclusiveness and
competitiveness of the financial and payment systems, 4. To ensure efficient management of currency as
well as banking services to the Government and banks, 5. To support balanced, equitable and sustainable
economic development of the country
Values: RBI commits itself to the following shared values that guide organisational decisions and
employee actions in pursuit of the Bank’s core purpose.
Public Interest : RBI in its actions and policies, seeks to promote public interest and the common good
Responsiveness and Innovation: RBI seeks to be a dynamic organisation responsive to public needs.
Integrity and Independence: To maintain highest standards of integrity through openness, trust and
accountability
Introspection and pursuit of excellence: RBI is committed to self-appraisal, introspection and
professional excellence VISION 1: Excellence in performance of functions. A: Furthering the monetary
policy framework and operating procedure; enriching statutory publications; and striving for a ‘state-of-
the-art’ data-intensive policy research framework B : Creating a resilient financial intermediation
ecosystem; refining the regulatory, supervisory and financial inclusion framework. C : Strengthening
resilience, integrity and efficiency of the financial markets infrastructure with a focus on deepening
digital payments D: Enhancing efficiency of the ‘Banker to Government’ function E: Broadening and
widening debt markets. F: Revamping the currency management system through enhanced efficiency in
procurement and distribution.
VISION 2: Strengthened trust of citizens and other institutions. A : Strengthening external communication
framework. B: Creating an enabling environment to develop consumer-friendly financial services
providers
C: Ensuring sound and comprehensive internal and external RBI policies D: Adopting a ‘less paper’ and
virtual workflow for external stakeholders
VISION 3: Enhanced relevance and significance in national and global roles A: Intensifying presence in
national forums to improve domestic financial infrastructure, B: Enhancing RBI’s brand equity. C:
Amplifying international financial engagement by articulating RBI’s stance and views on major global
economic and regulatory policy issues. D: Strengthening existing positions in supranational institutions.
VISION 4: Transparent, accountable and ethics-driven internal governance A: Reinforcing governance and
code of ethics, B: Upgrading internal controls through robust risk management, auditing & compliance
functions through international best practices C: Adopting ‘less paper’ & virtual internal workflows.
VISION 5: Best-in-class and environmentfriendly digital as well as physical infrastructure A: Automating
processes, achieving integration of information and ensuring cyber security.
VISION 6: Innovative, dynamic & skilled Human Resources A: Reviewing and reframing the organisational
structure to effectively implement all strategies B: Enhancing skills of human resources for creating a
suitable training framework C: Establishing an objective performance assessment system for efficient
HRM. D: Using technology and data analytics to promote research-based decision making by the
workforce
Discontinuation of Paper to Follow requirement for State Govt. Cheques To enhance efficiency in
cheque clearing, RBI had introduced Cheque Truncation System (CTS), facilitating the presentation and
payment of cheques without their physical movement. Paper to follow (P2F) was discontinued for Central
Govt. cheques from Feb 2016. RBI on 20.06.19, dispensed with the requirement of forwarding paid State
Govt. cheques in physical form to State Government departments/treasuries. The guidelines cover State
Governments which give their consent for withdrawal of P2F arrangement. In case any SG desires to have
a parallel run, it may be done for 3 months. Conditions: a. Presenting banks & drawee banks would
continue to discharge their duties prescribed under various Acts/ Regulations/Rules with respect to
payment of cheques. The government cheques would henceforth be paid in CTS clearing solely based on
their electronic images. The paid paper cheques would be retained by presenting bank. b. In case any
drawee bank desires to verify the government cheque in physical form before passing it for payment, the
image would be returned unpaid under the reason “present with document”. The presenting bank on
such instances shall ensure that the instrument is presented again in the next applicable clearing session
without any reference to the account holder (payee). c. The presenting banks are required to preserve
the physical instruments in their custody securely for a period of 10 years as required under Procedural
Guidelines for CTS. In case some specific cheques are required for the purpose of any investigation,
enquiry, etc., under the law, they may be preserved beyond 10 years. Drawee banks shall make
necessary arrangements to preserve the images of all government cheques for a period of 10 years with
themselves or through the National Archival System put in place by National Payments Corporation of
India (NPCI). d. The government cheques paid by a drawee bank across its counter by way of cash
withdrawal or transfer also need to be truncated and preserved for 10 years. e. The branch handling the
State Government transactions shall continue to send the Payment Scrolls on a daily basis in the
prescribed form to Sub-Treasury/Treasury to whom they are attached as hitherto. The cheques will not
be attached with the payment scroll, but the electronic images of paid cheques (by way of cash, clearing
and transfer), preserved by the presenting bank, shall be provided to the Office of AG/State Govt.
Departments/Treasuries/SubTreasuries by way of secured electronic communication/ email, etc., as per
their requirement. f. At any time during the preservation period of cheques, Office of AG/State
Government Departments/Treasuries/ Sub-Treasuries may require any paid cheque in physical form. The
dealing branch shall arrange to furnish the cheques paid by it by way of cash and transfer immediately.
Government cheques drawn on RBI / agency banks shall be presented in the grid within whose
jurisdiction the accredited/ authorised branch of paying bank is located.
Complaint Management System of RBI On 24.06.19, RBI launched The Complaint Management System
(CMS). It is a software application to facilitate RBI’s grievance redressal processes. Members of public
can access the CMS portal at RBI’s website to lodge their complaints against any of the entities regulated
by RBI. CMS has been designed to enable on-line filing of complaints. Salient Features: 1. It provides
acknowledgement through SMS/Email notification(s), status tracking through unique registration number,
receipt of closure advices and filing of Appeals. 2. It provides voluntary feedback on customer’s
experience. 3. It facilitates the regulated entities to resolve customer complaints received through CMS
by providing seamless access to their Principal Nodal Officers/Nodal Officers. 4. It generates a diverse
set of reports to monitor & manage grievances by Regulated Entities. They can use the information from
CMS for undertaking root cause analyses and initiating appropriate corrective action, if required. 5. RBI
officials handling the complaints can track the progress of redressal. The information available in CMS
could also be used for regulatory and supervisory interventions, if required. 6. With the launch of CMS,
the processing of complaints received in the offices of Banking Ombudsman (BO) and Consumer Education
and Protection Cells (CEPCs) of RBI has been digitalized.
Expert Committee on Economic Capital Framework -RBI in consultation with the Government of India,
constituted an Expert Committee to review the extant Economic Capital Framework of the RBI with Dr.
Bimal Jalan (former RBI Governor) as Chairman. The terms of reference of the Committee are given
below: Keeping in consideration (i) statutory mandate under section 47 of the RBI Act that the profits of
the RBI shall be transferred to the Government, after making provisions ‘which are usually provided by
the bankers’, and (ii) public policy mandate of the RBI, including financial stability considerations, the
Expert Committee would: 1. review status, need and justification of various provisions, reserves and
buffers presently provided for by the RBI; and 2. review global best practices followed by the central
banks in making assessment and provisions for risks which central bank balance sheets are subject to; 3.
suggest an adequate level of risk provisioning that RBI needs to maintain; 4. determine whether RBI is
holding provisions, reserves and buffers in surplus / deficit of required level of such provisions, reserves
and buffers; 5. propose a suitable profits distribution policy taking into account all the likely situations of
the RBI, including the situations of holding more provisions than required and the RBI holding less
provisions than required; 6. Any other related matter including treatment of surplus reserves, created
out of realised gains, if determined to be held. The Expert Committee will submit its report within a
period of 90 days from the date of its first meeting.
SEBI eases cyber security operation norms for small market intermediaries : SEBI has relaxed guidelines
pertaining to setting up cyber security operations center for small market intermediaries as they lack
knowledge in cyber security. Accordingly, small intermediaries can utilize services of the market Security
Operation Center (SOC) which is proposed to be set up by market infrastructure institutions (MIIs) to
provide cyber security solutions to such intermediaries. The SOC will be set up as a separate entity, with
the MIIs having at least 51% stake in the same. Intermediaries incapable of setting up such centers on
their own, can opt for market SOC. Market SOC will provide only the technology perspective for cyber
security guidelines, but people and process perspectives of cyber security would still have to be managed
by intermediaries.
SEBI eases norms for clubbing of FPI investment limits
SEBI has relaxed its norms for clubbing of investment limits by well-regulated foreign investors.
Accordingly, multiple entities having common ownership (directly or indirectly) of more than 50%, will be
treated as part of the same investor group and their investment limits would be clubbed
SEBI’s new norm for significant beneficial owner information
From 31 March, 2019, market regulator SEBI has made it mandatory for listed companies to make
disclosures about details pertaining to significant beneficial owners in a prescribed format. The details
will include name, PAN and nationality of the significant beneficial owner, as well, as registered owner.
Disclosure norms for weaker banks relaxed
RBI has altered the disclosure norms for banks on material divergences on provisioning. Accordingly, banks
will now have to disclose their provisions if the divergence is more than 10% of the bank’s profit before
provisioning and contingencies. The norms on divergence on gross NPAs have been retained at a material
divergence of 15%, as found by RBI auditors and reported by the bank.
RBI issues guidelines to prevent market abuse
RBI has issued guidelines to prevent misuse of price-sensitive information by participants in markets for
financial instruments. Accordingly, no market participant will carry out a transaction, or initiate any action
with the sole or dominant intention of influencing a benchmark rate or a reference rate. Participants
indulging in any such activity are liable to be denied access to markets, in one or more instruments for a
period, that may not exceed one month at a time. The guidelines have become effective from March 15,
2019. These directions would exclude transactions executed through the recognized stock exchanges. They
will also not apply to banks and the central government in furtherance of monetary policy, fiscal policy or
other public policy objectives.
SEBI, IBBI sign MoU for better IBC implementation: The Insolvency and Bankruptcy Board of India (IBBI)
has signed a Memorandum of Understanding (MoU) with SEBI, for an effective implementation of the
Insolvency and Bankruptcy Code, 2016. They have agreed to assist and co-operate with each other,
subject to limitations imposed by the applicable laws. The MoU provides for sharing information and
resources between SEBI and IBBI. There will be periodic meetings to discuss matters of mutual interest,
including regulatory requirements that impact each party’s responsibilities, enforcement cases, research
and data analysis etc. Another salient feature of the pact is that there will be cross-training of staff in
order to enhance each party’s understanding of the other’s mission for effective utilization of collective
resources. This will be besides initiatives for capacity building of insolvency professionals and financial
creditors.
Committee on development of housing finance securitization market to be set up-As part of its Statement
on Developmental and Regulatory Policies, the RBI is setting up a committee to assess the state of
housing finance securitization market in India. It aims to bring in standardization of asset securitization
practices, to enable better management of credit and liquidity risks. The committee will study the best
international practices and lessons learnt from the global financial crisis.
Framework for timely resolution of customer grievances: RBI is issuing norms for standardized timelines
to resolve customer complaints and compensation frameworks across all authorized payments systems.
The new framework for turnaround time (TAT) will be put in place by end of June 2019. The move
occurred after RBI’s realization that the time taken for resolving customer complaints varies across
different payment systems.
Payments Bank and Small Finance Banks— access to Call/Notice/Term Money Market (October 29,
2018): RBI has clarified that Payments Banks and Small Finance Banks are eligible to participate in the
Call/Notice/Term money market (hereafter referred to as Call money market) both as borrowers and
lenders. Such eligibility is valid even prior to the completion of the process to get themselves included
in the Second Schedule of Reserve Bank of India Act, 1934. The prudential limits and other.guidelines on
Call money market for Payments Banks and Small Finance Banks will be the same as those applicable to
Scheduled Commercial Banks.
Inspection of Banks-Sets of Specimen Signatures (October 19, 2018): As per extant guidelines,
Regional Offices of RBI are required to provide every year latest set of specimen signatures of senior
officials of RBI authorized to issue letters of introduction to inspecting officers to the Head/
Controlling offices of banks/FIs within their jurisdiction. Consequent to the introduction of Risk Based
Supervision framework, Senior Supervisory Managers (SSMs) have been acting as a single and focal
point of contact for all communications/interfaces between the bank and RBI. Banks/FIs are being
advised of the appointment of SSMs, by Department of Banking Supervision, Central Office, RBI. In
view of the above, RBI has decided to discontinue the practice as mentioned above.
Directions for Central Counterparties (CCPs) (October 15, 2018): RBI has issued the directions governing
the functioning of CCPs. "Central Counterparty" (CCP) means a system provider, who by way of novation
interposes between system participants in the transactions admitted for settlement, thereby becoming the
buyer to every seller and the seller to every buyer, for the purpose of effecting settlement of their
transactions. "User" means a regulated entity admitted as a member of the CCP in terms of its Bye Laws,
Rules and Regulations for the purpose of clearing and settlement of its trades concluded in the ordinary
course of business. Net worth requirements and Ownership of CCPs: Every applicant seeking
authorisation / recognition as a CCP shall have a minimum net worth of Rs.3 billion at the time of
submitting its application. A CCP shall hold liquid net assets funded by equity capital equal to
minimum of six months of current operating expenses.
Incorporation of Name of the Purchaser on the Face of the Demand Draft (July 12, 2018): In order to
address the concerns arising out of the anonymity provided by payments through demand drafts and its
possible misuse for money laundering, RBI has decided that the name of the purchaser be
incorporated on the face of the demand draft, pay order, banker's cheque, etc., by the issue in
bank. These instructions shall take effect for such instruments issued on or after September 15,
2018.
Branch Authorisation Policy — Left Wing Extremism affected districts — Revised List (June 14, 2018):
The Government of India has revised the list to from 106 to 90 LWE affected districts. Banks have been
advised to follow the revised list
Taking over of valuation of Government Securities (G-Sec) by Financial Be-rhmark India Pvt. Ltd.
(FBIL) (March 31, 2018): FBIL would assume the responsibility for administering the valuation of
Government securities (issued by both the Centre and States) with effect from March 31, 2018.
Banking Facility for Senior Citizens and Differently abled Persons (November 9, 2017): RBI has
observed that there are occasions when banks discourage or turn away senior citizens and differently
abled persons from availing banking facilities in branches. Notwithstanding the need to push digital
transactions and use of ATMs, it is imperative to be sensitive to the requirements of senior citizens
and differently abled persons. In view of the above, banks should put in place appropriate mechanism
with the following specific provisions for meeting the needs of such customers so that they are able
to avail of the bank's services without difficulty. (a) Dedicated Counters/Preference to Senior
Citizens. Differently abled persons: Banks should provide a clearly identifiable dedicated counter or
a counter which provides priority to senior citizens arid people who are differently abled including
visually impaired persons. (b) Ease of submitting Life Certificate: As per extant guidelines, in addition to
the facility of Digital Life Certificate under "Jevan Praman" Scheme, pensioners can submit physical Life Certificate
form at any branch of the pension paying bank. However, often the same is not updated promptly by the
receiving branch In the Core Banking Solution (CBS) system of the bank, resulting in avoidable hardship to
the pensioners. RBI has, therefore, advised that banks shall ensure that when a Life Certificate is
submitted in any branch, incidding a non-home branch, of the pension piing bank, the same is
updated/ uploaded promptly in CBS by the receiving branch itself, to avoid any delay in credit of
pension. (c) Cheque Book Facility: (i) Banks shall issue cheque books to customers, whenever a
request Is received, through a requisition slip which is part of the cheque book issued earlier. (ii)
Banks should provide minimum 25 cheque leaves every year, if requested, in savings bank account,
free of charge. (iii) Banks shall not insist on physical presence of any customer including senior
citizens and differently abled persons for getting cheque books. (iv) Banks may also issue cheque books, on
requisition, by any other mode as per bank's laid down policy. Providing such facility in BSBDA will
not render the account to be classified as non-BSBDA. (d) Automatic conversion of status of
accounts: Presently, in some banks, even fully KYC - compliant accounts are not automatically
converted into 'Senior Citizen Accounts' on the basis of date of birth maintained in the bank's records.
RBI has advised that a fully KYC compliant account should automatically be converted into a 'Senior
Citizen Account' based on the date of birth available in bank's records. (e) Additional Facilities to
visually impaired customers: The facilities provided to sick/old/incapacitated persons regarding
operations of accounts through identification of thumb/toe impression/mark by two independent
witnesses and authorising a person who would withdraw the amount on behalf of such customers)
shall also be extended to the visually impaired customers. (f) Ease of filing Form 15G/H: Banks should
provide senior citizens and differently abled persons Form 15G/H once in a year (preferably in April)
to enable them to submit the same, where applicable, within the stipulated time. (g) Door Step
Banking: In view of the difficulties faced by senior citizens of more than 70 years of age and
differently abled or infirm persons (having medically certified chronic illness or disability) including
those who are visually impaired, banks should make concerted effort to provide basic banking
facilities, such as pick up of cash and instruments against receipt, delivery of cash against withdrawal
from account, delivery of demand drafts, submission of Know Your Customer (KYC) documents and
Life certificate at the premises/ residence of such customers. The aforesaid guidelines should be
implemented by December 31, 2017.
DEPOSIT GOVT DEPOSIT & TAX DEDUCTED AT SOURCES

Special Deposit Scheme (SDS)-1975 -Payment of interest for calendar year 2018 RBI informed banks that
gazette notifications related to interest rates for SDS 1975 are available in Government of India website
viz. egazette.nic.in which can be perused for guidance. Banks have been advised on 06.12.18, to ensure
that interest for the calendar year 2018 for SDS 1975 is disbursed to the account holders as per the rates
mentioned in the gazette. RBI further added that interest for the calendar year 2018 may be disbursed to
the SDS account holders preferably through electronic mode on January 01, 2019 itself.
Disclosure on Exposure to Infrastructure Leasing & Financial Services Limited (ILFS) and its group
entities
RBI has advised banks to refer to the National Company Law Appellate Tribunal’s (NCLAT) order dated February 25,
2019 in respect of I.A No. 620 of 2019 in Company Appeal (AT) No. 346 of 2018, in terms of which “no financial
institution will declare the accounts of ‘Infrastructure Leasing & Financial Services Limited’ or its entities as ‘NPA’
without prior permission of this Appellate Tribunal”. In this context, banks and AIFIs have been advised by RBI on
24.04.19, to disclose in their notes to accounts, the information in the prescribed proforma.
2. LOANS & ADVANCES
EXTERNAL BENCHMARK BASED LENDING-RBI amended its instructions contained in Master Direction
dated 03.03.2016, on 4.9.19, as under: (a) All new floating rate personal or retail loans (housing, auto,
etc.) and floating rate loans to Micro and Small Enterprises extended by banks from October 01, 2019
shall be benchmarked to one of the following: 1. Reserve Bank of India policy repo rate 2. Government of
India 3-Months Treasury Bill yield published by the Financial Benchmarks India Private Ltd (FBIL) 3. Govt.
of India 6-Months Treasury Bill yield published by FBIL 4. Any other benchmark market interest rate
published by FBIL. (b) Banks are free to offer such external benchmark linked loans to other types of
borrowers as well.
(c) In order to ensure transparency, standardisation, and ease of understanding of loan products by
borrowers, a bank must adopt a uniform external benchmark within a loan category; in other words, the
adoption of multiple benchmarks by the same bank is not allowed within a loan category. Spread under
External Benchmark Banks are free to decide the spread over the external benchmark. However, credit
risk premium may undergo change only when borrower’s credit assessment undergoes a substantial
change, as agreed upon in the loan contract. Further, other components of spread including operating
cost could be altered once in three years. Reset of Interest Rates under External Benchmark The interest
rate under external benchmark shall be reset at least once in three months. Transition to External
Benchmark from MCLR/Base Rate/BPLR Existing loans and credit limits linked to the MCLR/Base Rate/
BPLR shall continue till repayment or renewal:
Other conditions 1. Other existing borrowers shall have the option to move to External Benchmark at
mutually acceptable terms. 2. The switch-over shall not be treated as a foreclosure of existing facility. 3.
Interest rates on fixed rate loans of tenor below 3 years shall not be less than the benchmark rate for
similar tenor. 4. There shall be no lending below the benchmark rate for a particular maturity for all
loans linked to that benchmark. 5. All floating rate rupee loans sanctioned and renewed between
1.7.2016 and 31.03.16, shall be priced with reference to the Base Rate which will be the internal
benchmark for such purposes. 6. All floating rate rupee loans sanctioned and renewed w.e.f. April 1,
2016 shall be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will
be the internal benchmark for such purposes subject to the provisions contained in Master Direction. 7.
The periodicity of the reset under MCLR shall correspond to the tenor/maturity of the MCLR to which the
loan is linked.
Levy of Foreclosure Charges /Pre-payment Penalty on Floating Rate Term Loans As per RBI circular
dated 07.05.14, banks are not permitted to charge foreclosure charges / pre-payment penalties on home
loans / all floating rate term loans sanctioned to individual borrowers. On 02.08.19, RBI clarified that
banks shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loan
sanctioned, for purposes other than business, to individual borrowers with or without co-obligant(s).
LEVY OF FORECLOSURE CHARGES / PRE-PAYMENT PENALTY ON FLOATING RATE TERM LOANS  As per
the extant guidelines, banks are not permitted to charge foreclosure charges / pre-payment penalties on
home loans / all floating rate term loans sanctioned to individual borrowers.  In this connection, RBI has
clarified that banks shall not charge foreclosure charges/ pre-payment penalties on any floating rate
term loan sanctioned, for purposes other than business, to individual borrowers with or without co-
obligant(s).
LEVY OF FORECLOSURE CHARGES/PRE-PAYMENT PENALTY ON FLOATING RATE LOANS BY NBFCs As per
the extant guidelines pertaining to NBFCs, foreclosure charges/ prepayment penalty on all floating rate
term loans sanctioned to individual borrowers have been waived. RBI has now clarified that NBFCs shall
not charge foreclosure charges / pre-payment penalties on any floating rate term loan sanctioned for
purposes other than business to individual borrowers, with or without co-obligant(s). AMENDMENT IN KYC
GUIDELINES The Government of India, has notified amendment to the Prevention of Money-laundering
(Maintenance of Records) Rules, 2005. As per the amendment, where the individual is a prisoner in a jail,
the signature or thumb print shall be affixed in presence of the officer in-charge of the jail and the said
officer shall certify the same under his signature and the account shall remain operational on annual
submission of certificate of proof of address issued by the officer in-charge of the jail.
DEVELOPMENT OF SECONDARY MARKET FOR CORPORATE LOANS  The RBI has constituted a Task Force
on the development of Secondary market for corporate loans under the chairmanship of Shri T.N.
Manoharan, Chairman, Canara Bank.  Secondary loan market in India is largely restricted to sale to
Asset Reconstruction Companies and ad-hoc sale to other lenders including banks, and no formalised
mechanism has been developed to deepen the market.  The Task Force has been constituted realising
the need for a formalised mechanism to deepen the secondary market and the significance of a well-
developed secondary market for greater transparency of inherent riskiness of the debt being traded.
Such price discovery is expected to spur innovations in the securitisation market as well as invigorate
dormant markets such as Corporate Default Swaps (CDS).  These would in turn provide with early
warning signals regarding the riskiness of the debt being held by the banks which would incentivize
improving the underwriting and origination standards. Terms of Reference: To review the existing state
of the market for loan sale / transfer in India as well as the international experience in loan trading and,
to make recommendations on:  Required policy/regulatory interventions for facilitating development of
secondary market in corporate loans, including loan transaction platform for stressed assets;  Creation
of a loan contract registry to remove information asymmetries between buyers and sellers, its ownership
structure and related protocols such as standardization of loan information, independent validation and
data access;  Design of the market structure for loan sales/auctions, including online platforms and the
related trading and transaction reporting infrastructure;  Need for, and role of, third party
intermediaries, such as servicers, arrangers, market makers, etc.;  Appropriate measures for enhanced
participation of buyers and sellers in loan sale/transfer;
DEVELOPMENT OF HOUSING FINANCE SECURITISATION MARKET  The RBI has constituted a Committee
on the development of Housing Finance Securitisation Market under the chairmanship of Dr. Harsh
Vardhan to review the existing state of mortgage backed securitisation in India, including the regulations
currently in place, and to make specific recommendations on suitably aligning the same with
international norms.  The Mortgage Securitisation market in India is primarily dominated by direct
assignments among a limited set of market participants on account of various structural factors
impacting both the demand and the supply side, as well as certain prudential, legal, tax and accounting
issues.  It is imperative that the market moves to a broader issuance model with suitable structuring of
the instruments for diverse investor classes in order to ensure a vibrant securitisation market.  The
international experience shows that it is critical to address the issues of misaligned incentives and
agency problems resulting from information asymmetry problems between the originators and investors
in the market, which can exacerbate systemic risk. Thus, a careful design of a robust and transparent
securitisation framework assumes paramount significance.
Filing of Security Interest relating to Immovable (other than equitable mortgage), Movable and
Intangible Assets in CERSAI -In its circular dated 26.05.11, RBI had advised banks/financial
institutions(FIs) to register the transactions relating to securitization and reconstruction of financial
assets and those relating to mortgage by deposit of title deeds with CERSAI. The Government of India had
subsequently issued a Gazette Notification dated January 22, 2016 for filing of the following types of
security interest on the CERSAI portal: a. Particulars of creation, modification or satisfaction of security
interest in immovable property by mortgage other than mortgage by deposit of title deeds. b. Particulars
of creation, modification or satisfaction of security interest in hypothecation of plant and machinery,
stocks, debts including book debts or receivables, whether existing or future. c. Particulars of creation,
modification or satisfaction of security interest in intangible assets, being know how, patent, copyright,
trademark, licence, franchise or any other business or commercial right of similar nature. d. Particulars
of creation, modification or satisfaction of security interest in any ‘under construction’ residential or
commercial or a part thereof by an agreement or instrument other than mortgage. CERSAI had started
registration of the data in respect of paragraphs 2 (a) to (c) above, for the security interests created on
or after January 22, 2016, w.e.f. May 25, 2016 for Scheduled Commercial Banks and w.e.f. July 1, 2016
for all other entities registered with them. Further, the registration of data in respect of paragraph 2(d)
above was commenced since June 8, 2017 for all banks and FIs registered with CERSAI. Meanwhile, the
banks/ FIs have also started registering the security interests created before January 22, 2016 (subsisting
records). However, RBI observed that the extent of registration on the CERSAI portal is very low, both for
current and subsisting records. On 27.12.18, Banks/FIs have been advised by RBI to complete filing the
charges pertaining to subsisting transactions by March 31, 2019. Banks/ FIs have also been advised to file
the current charges relating to all transactions with CERSAI on an ongoing basis.
External Benchmarking of New Floating Rate Loans by Banks: The Report of the Internal Study Group
to Review the Working of the Marginal Cost of Funds based Lending Rate (MCLR) System (Chairman: Dr.
Janak Raj) had recommended the use of external benchmarks by banks for their floating rate loans
instead of the present system of internal benchmarks [Prime Lending Rate (PLR), Benchmark Prime
Lending Rate (BPLR), Base rate and Marginal Cost of Funds based Lending Rate (MCLR)]. RBI has proposed
that all new floating rate personal or retail loans (housing, auto, etc.) and floating rate loans to Micro
and Small Enterprises extended by banks from April 1, 2019 shall be benchmarked to one of the
following: (a) Reserve Bank of India policy repo rate, or (b) Government of India 91 days Treasury Bill
yield produced by the Financial Benchmarks India Private Ltd (FBIL), or (c) Government of India 182 days
Treasury Bill yield produced by the FBIL, or (d) Any other benchmark market interest rate produced by
the FBIL. The spread over the benchmark rate — to be decided wholly at banks' discretion at the
inception of the loan should remain unchanged through the life of the loan, unless the borrower's credit
assessment undergoes a substantial change and as agreed upon in the loan contact.Banks are free to
offer such external bench mark linked loans to other types of borrowers as well. In order to ensure
transparency, standardisation, and ease of understanding of loan products by borrowers, a bank must
adopt a uniform external benchmark within a loan category. The adoption of multiple benchmarks by the
same bank is not allowed within a loan category.
commercial or a part thereof by an agreement or instrument other than mortgage. However, RBI
observed that the extent of registration on the CERSAI portal is very low, both for current and subsisting
records. On 27.12.18, Banks/FIs have been advised by RBI to complete filing the charges pertaining to
subsisting transactions by March 31, 2019. Banks/ FIs have also been advised to file the current charges
relating to all transactions with CERSAI on an ongoing basis.
Guidelines on Loan System for Delivery of Bank Credit (December 5, 2018): 1. Objective: To enhance
credit discipline among the larger borrowers enjoying working capital facility from the banking
system. 2. Applicability: Borrowers having aggregate fund based working capital limit of Rs1500
million and above from the banking system. 3. Method of delivery of bank credit: From I n April, 2019,
minimum 40% (60% from 1.7.2019) of the sanctioned fund based working capital limit, including ad
hoc limits and TODs, should be by way of 'Loan Component'. For such borrowers, drawings up to 40
percent (60% from 1.7.2019) of the total fund based working capital limits shall only be allowed from
the 'loan component'. Drawings in excess of the minimum 'loan component' threshold may be allowed
in the form of cash credit facility. The bifurcation of the working capital limit into loan and cash
credit components shall be effected after excluding the export credit limits (pre-shipment and post-
shipment) and bills limit for inland sales from the working capital limit.
Investment by the bank in the commercial papers issued by the borrower shall form part of the loan
component, provided the Investment is sanctioned as part of the working capital limit. In case of
consortium finance, banks may frame ground rules for sharing of cash credit and loan components. 4.
Amount and tenor of the loan: Minimum tenor of thia Idan will be 7 days. Banks may split the loan
component into WCLs with different maturity periods as per the needs of the borrowers. 5.
itepayment/RenewpRollover of Loan Comoonerit: Banks will have the discretion to stipulate repayment
of thcWCLs in instalments or by way of a "bullet" repayment. Banks may consider rollover of the WCLs at
the request of the borrower. 6. Risk weights for undrawn portion of cash credit limits: From April 1,
2019, the undrawn portion of cash credit/ overdraft limits sanctioned to the aforesaid large borrowers,
shall attract a credit conversion factor of 20%. 7. Effective Date: The guidelines will be effective from
April 1, 2019 covering both existing as well as new relationships. The 40% loan component will be revised
to 60%, with effect from July 1, 2019.
Introduction of Liquidly Adjustment Facility (LAF) and Marginal Standing Facility (MSF) for
Scheduled Cooperative Banks (August 16, 2018): RBI has decided that with effect from August 20,
2018, LAF will also be extended to Scheduled State Co-operative Banks (StCBs) which are CBS enabled
and have CRAR of at least 9 percent. Further, in order to provide an additional window for liquidity
management over and above what is available under LAF, RBI has decided that With effect from August
20, 2018, Marginal Standing Facility (NSF) will be extended to Scheduled UCBs and Scheduled StCBs
which are CBS enabled and have CRAR of at least 9 percent.
Benchmark Rate Methodology: Since MCLR is more sensitive to policy rate signals, RBI has decided to
harmonize the methodology of determining benchmark rates by linking the Base Rate to the MCLR with
effect from April 1, 2018.
Individual Housing Loans: Risk-Weights and Loan to Value (LTV) Ratios (June 7, 2017): As a
countercyclical measure, the LTV ratios, risk weights and standard asset provisioning rate for individual
housing loans sanctioned on or after 7 June 2017 shall be as under:
Standard Asset
Outstanding loan LTV ratio (%) Risk Weight (%) Provision (do)
Up to Rs.30 lakh < 80 35
> 80 and < 90 50
Above Rs.30 lakh and up to < 80 35 0.25
Rs.75
Abovelakh
Rs.75 lakh < 75 50
3. PRIORITY SECTOR LENDING

3A. AGRICULTURE:
Priority Sector Targets - Lending to Non-Corporate Farmers – FY 2019-20 The system-wide average of
the last 3 years achievement with regard to overall direct lending to non-corporate farmers is notified by
RBI every year. The applicable system wide average figure for computing achievement under priority
sector lending for the FY 2019-20 is 12.11 percent as per RBI notification dated 19.09.19.
Priority Sector loan by banks to NBFCs for On-Lending To boost credit to the needy segment of
borrowers, RBI decided (13.08.19) that bank credit to registered NBFCs (other than MFIs) for on-lending
will be eligible for classification as priority sector under respective categories subject to the following
conditions: 1. Agriculture: On-lending for ‘Term lending’ component under Agriculture up to Rs.10 lakh
per borrower. 2. Micro & Small enterprises: On-lending by NBFC up to Rs. 20 lakh per borrower. 3.
Housing: Enhancement of existing limits for on-lending from Rs.10 lakh per borrower to Rs.20 lakh per
borrower. Under these guidelines, banks can classify only the fresh loans sanctioned by NBFCs out of
bank borrowings, on or after the 13.08.19. Loans given by HFCs under existing on-lending rules will
continue to be classified under priority sector by banks. Overall cap : Bank credit to NBFCs for On-
Lending will be allowed upto a limit of 5% of individual bank’s total priority sector lending on an ongoing
basis. These direction will be valid upto March 31, 2020 and reviewed thereafter. Loans disbursed under
this model will continue to be classified under Priority Sector till the date of repayment/maturity.
Interest Subvention Scheme for Kisan Credit Card (KCC) to Fisheries and Animal Husbandry farmers
Government of India issued (RBI-26.08.19) the operational guidelines of the Interest Subvention Scheme
for Kisan Credit Card facility to fisheries and animal husbandry farmers for a period of two years i.e.
2018-19 and 2019-20 with the following stipulations: 1. Eligiblity : Short-term loans upto Rs. 2 lakh to
farmers involved in activities related to Animal Husbandry and Fisheries 2. Rate of interest charged by
bank : 7% per annum during the years 2018-19 and 2019-20 3. Rate of interest subvention : 2% per annum
to lending institutions viz. Public Sector Banks (PSBs) and Private Sector Commercial Banks (for loans
given by their rural and semi-urban branches only) on use of their own resources.
4. Calculation : Interest subvention will be calculated on the loan amount from the date of its
disbursement / drawal upto the date of actual repayment of the loan by the farmer or up to the due date
of the loan fixed by the banks, whichever is earlier, subject to a maximum period of one year. 5. Overall
cap : For farmers possessing KCC for raising crops and involved in activities related to animal husbandry
and/or fisheries, the KCC for animal husbandry/fisheries shall be within the overall limit of Rs.3 lakh. 6.
Additional subvention : 3% p.a to farmers repaying both loans (short term crop loan and working capital
loan for animal husbandry/fisheries activities) in time i.e. from the date of disbursement of the working
capital loan upto the actual date of repayment by farmers or upto the due date fixed by the banks for
repayment of loan, whichever is earlier, subject to a maximum period of one year from the date of
disbursement. 7. Effective rate of interest : Farmers repaying promptly would get short term loans @ 4%
per annum during the years 2018-19 and 2019-20. 8. The limit for crop loan component will take priority
for interest subvention and prompt repayment incentive benefits and the residual amount will be
considered towards animal husbandry and / or fisheries. 9. Banks are to make Aadhar linkage mandatory
for availing short-term loans for Animal Husbandry and Fisheries in 2018-19 and 2019-20. 10. The Interest
Subvention Scheme is being put on DBT mode on ‘In Kind/services’ basis and all short term loans
processed from 2018-19 are required to be brought on ISS portal / DBT platform. Banks are to capture
and submit the category wise data of beneficiaries under the scheme and report the same on ISS portal
individual farmer wise once it is launched by the Ministry of Agriculture and Farmers Welfare to settle
the claims arising from 2018-19 onwards. RBI also advised as under: i) For 2% interest subvention, banks
are to submit their claims on a half-yearly basis as on September 30 and March 31 for the years 2018-
2019 and 2019-2020, of which, the latter needs to be accompanied by a Statutory Auditor’s certificate
certifying the claims for subvention for the financial year ended on March 31 of corresponding year as
true & correct. ii) For 3% prompt repayment incentive, banks may submit their one-time consolidated
claims for disbursements made during 2018-19 and 2019-20, accompanied by Statutory Auditor’s
certificate certifying the claim as true and correct. iii) Claims in respect of 2% interest subvention and 3%
prompt repayment incentive may be submitted within a quarter from the close of the half year/year
Collareal Free Agricultural Loans Keeping in view the overall inflation & rise in agriculture input cost over the years since
2010, RBI decided on 07.02.19, to raise the limit for collateral free agricultural loans from the existing level of Rs.1 lakh to
Rs.1.60 lakh. Accordingly, banks may waive margin requirements for agricultural loans upto Rs.1.60 lakh.
Kisan Credit Card (KCC) Scheme: Working Capital for Animal Husbandry and Fisheries -Kisan Credit Card (KCC)
Scheme (RBI circular dated 04.07.18), has been extended to Animal Husbandry farmers and Fisheries for
their working capital requirements, on 04.02.19 by RBI (as per provisions of Budget 2018-19). The
guidelines are given as under:Purpose: To meet short term credit requirements of rearing of animals,
birds, fish, shrimp, other aquatic organisms, capture of fish. Eligibility: Fishery : Inland Fisheries and
Aquaculture, Fishers, Fish Farmers (individual & groups/ partners/ share croppers/ tenant farmers), Self
Help Groups, Joint Liability Groups & women groups and Marine Fisheries.The beneficiaries must own or
lease any of the fisheries related activities such as pond, tank, open water bodies, raceway, hatchery,
rearing unit, possess necessary license for fish farming and fishing related activities, and any other State
specific fisheries and allied activities.
1. Poultry and small ruminant: Farmers, poultry farmers either individual or joint borrower, Joint Liability
Groups or Self Help Groups including tenant farmer of sheep/goats/pigs/poultry/birds/rabbit and
having owned/ rented/leased sheds.
2.Dairy: Farmers and Dairy farmers either individual or joint borrower, Joint Liability Groups or Self Help
Groups including tenant farmers having owned /rented/leased sheds.
Scale of Finance -The scale of finance will be fixed by the District Level Technical Committee (DLTC)
based on local cost worked out on the basis of per acre/per unit/per animal/per bird etc.
1. The working capital components in fisheries, may include recurring cost towards seed, feed, organic and
inorganic fertilisers, lime/other soil conditioners, harvesting and marketing charges, fuel/electricity
charges, labour, lease rent (if leased water area) etc. For capture fisheries, working capital may include
the cost of fuel, ice, labouring charges, mooring/landing charges etc. may form part of the scale of
finance.
The working capital components in Animal Husbandry, may include recurring cost towards feeding, veterinary
aid, labour, water and electricity supply.
2. The maximum period for assessment of working capital requirement may be based on one production
cycle.
General Guidelines
1. Drawing power: The drawing power will be worked on the basis of the latest valuation of stocks,
receivables and/or cash flows as per terms of sanction.
2. Repayment: The loan will be in the nature of a revolving cash credit limit. Repayment will be fixed as
per the cash flow/income generation pattern of the activity undertaken by the borrower.
3. Monitoring of end use: The account/smart card for the loan issued under the scheme is to be
maintained/issued separately from the existing KCC loan to monitor the utilization limit. The monitoring
of end use of funds will be in line with other loans (KCC on crop loans included) viz., field visits to the site
of unit/project to be carried out by the branch officials for checking the progress of the unit. Banks will
periodically review the facility and continue/withdraw/scale down the facility based on the performance
of the borrower.
Rephasement of Short-term Production Credit (Crop Loans)under Relief for Natural Calamity:All short-
term loans, except those which are overdue at the time of occurrence of natural calamity, can be restructured.
The principal amount of the short-term loan as well as interest due for repayment in the year of occurrence of
the natural calamity may be converted into term loan. The repayment period of the restructured loan may vary
depending on the severity of the calamity, the impact on loss of economic assets and distress it caused. A
maximum repayment period of up to 2 years (including moratorium period of 1 year) shall be allowed if the loss is
between 33% and 50%. If the crop loss is 50% or more, repayment period may be extended upto a maximum of 5
years (including 1 year moratorium period). In all restructured loan accounts, moratorium period of at least one
year shall be considered. Banks may not insist on additional collateral security for such restructured loans.
Lending to non-corporate farmers — System wide average of last three years (July 12, 2018): RBI,
vide circular dated July 16, 2015 had advised banks to ensure that their overall direct lending to non-
corporate farmers does not fall below the system-wide average of the last three years achievement
failing which they will attract the usual penalties for shortfall. In this regard, the applicable system
wide average figure for computing achievement under priority sector lending for the FY 2018-19 is
11.99 percent.
Priority Sector Lending — Targets and Classification (June 19, 2018): As per extant guidelines,
loans to individuals up to Rs 28 lakh in metropolitan centres (with population of ten iakh and above) and
Rs 20 lakh in other centres, are eligible to be classified under priority sector, provided that the cost of
dwelling unit does not exceed Rs 35 lakh and Rs 25 lakh, respectively. With a view to bringing
convergence of the Priority Sector Lending guidelines for housing loans with the Affordable Housing
Scheme, and to give a filip to low-cost housing for the Economically Weaker Sections and Low Income
Groups, the housing loan limits for eligibility under priority sector lending has been revised to Rs 35 lakh in
metropolitan centres (with population of ten lakh and above), and Rs 25 lakh in other centres, provided
the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed Rs 45
lakh and Rs 30 iakh, respectively. Further, the existing family income limit of Rs 2 lakh per annum,
prescribed for loans to housing projects exclusively for the purpose of construction of houses for
Economically Weaker Sections (EWS) and Low Income Groups (LIG), is revised to Rs 3 lakh per annum
for EWS and Rs 6'lakh per annum for LIG, in alignment with the income criteria specified under the
Pradhan Mantri Awas Yojana. The revised guidelines shall come into effect from June 19, 2018.
Priority Sector Lending — Targets and Classification {March 01, 2018) : As .per existing guidelines,
advances to micro/small and Medium service enterprises are considered as PS if maximum advance is
restricted to Rs 5 crore and Rs 10 crore respectively. Now, RBI has decided to remove the currently
applicable loan limits of Rs 5 crore and Rs 10 crore per borrower to Micro/ Small and Medium
Enterprises (Services) respectively, for classification under priority sector. Accordingly, all bank loans
to MSMEs, engaged in providing or rendering of services as defined in terms of investment in equipment
under MSMED Act, 2006, shall qualify under priority sector without any credit cap.
Changes in NRLM Scheme: Number of members: 10-20 (earlier it was 5 to 20) in difficult areas,
groups with disabled persons, and in remote tribal areas — 5 to 20. Loan amount: Loan will be
provided in multiple doses as given below: (a) First dose: 6 times of the existing corpus or minimum of
Rs1 lakh whichever is higher (b) Second dose: 8 times of the existing corpus or minimum of Rs2 lakh,
whichever is higher; (c) Third dose: Minimum of Rs. 3 lakhs, (d) Fourth dose onwards: Minimum of Rs 5
Lakh. The loans may be used for meeting social needs, high cost debt swapping and taking up
sustainable livelihoods by the individual members within the SHGs or to finance any viable common
activity started by the SHGs. (Corpus is inclusive of revolving funds, if any, received by that SHG, its
own savings, interest earning by SHG from on-lending to its members, income from other sources, and
funds from other sources in case of promotion by other institutes/NGOs.) SHGs can avail either Term
loan or a CCL loan or both based on the need. Repayment schedule could be as follows: (a) The First
year/ first dose of loan will be repaid in 6-12 months in monthly/ quarterly instalments; (b) The
Second year/ Second dose of loan will be repaid in 12-24 months in monthly/ quarterly instalments•
(c) The Third year/ Third dose of loan will be repaid in 24-36 months in monthly/ quarterly
instalments; (d) The loan from Fourth year/ Fourth dose onwards has to be repaid between 3-6 years
based on the cash flow in monthly/ quarterly installments.
Changes in NULM Scheme: No margin money should be taken for a loan up to Rs 50,000 and for higher
amount loans, preferably 5% should be taken as margin money and it should in no case be more than
10% of the project cost.
Priority Sector Lending status for Factoring Transactions (August 11, 2016): Factoring
transactions on 'with recourse' basis shall be eligible for priority sector classification by banks,
which are carrying out the business of factoring departmentally. Banks may classify their
outstanding factoring portfolio on the reporting dates under MSME category, wherever the 'assignor'
in the factoring transaction is a Micro, Small or Medium Enterprise.
Priority Sector Lending —Targets and Classification (July 28, 2016): As per extant guidelines,
Bank credit to Micro Finance Institutions (MFIs) extended for on-lending to individuals will be
eligible for categorisation as priority sector advance under respective categories provided not less
than 85 percent of total assets of MFI (other than cash, balances with banks and financial
institutions, government securities and money market instruments) are in the nature of "qualifying
assets"..For this purpose, a "qualifying asset" shall mean a loan disbursed by MFI, in which tenure of
loan is not less than 21 months when loan amount exceeds Rs 30,000/- (earlier this amount was Rs
15000)
Deendayal Antyodaya Yojana (DAY)-National Urban Livelihoods Mission (April 07, 2016): Ministry of
Housing and Urban Poverty Alleviation (UPA Division), Government of India has decided to enhance the
scope of National Urban Livelihoods Mission. The Mission with enhanced scope will be renamed as
"Deendayal Antyodaya Yojana (DAY)-National Urban Livelihoods Mission". Mission will be implemented in
all District Headquarter Towns and all other cities with a population of 1,00,000 or more as per 2011
Census. The States/UTs are also allowed to implement all or any of the components of the Mission in any
other Statutory Town, based on the local capacity and requirement.
Relief Measures by Banks in Areas affected by Natural Calamities (October 17, 2018): 1.
Declaration of Natural Calamity: Declaration of a natural calamity is the domain of the Central/
State Governments. The declarations/certificates are called by different names such as Annewari,
Paisewari, Girdawari, etc. in different States. To extend relief measure towards agricultural loans
including rescheduling of loans by banks, the crop loss assessed should be 33% or more.
2.Restructuring of Existing Loans: Agriculture Loans: Short-term Production Credit (Crop Loans): All
short-term loans except those which are overdue at the time of occurrence of the natural calamity shall
be eligible for restructuring. The principal amount of the short-term loan as well as interest due for
repayment in the year of occurrence cf the natural calamity shall be converted into term loan. A
maximum repayment period of up to two years (including the moratorium period of one year) shall
be allowed if the loss is between 33% and 50%. If the crop loss is 50% or more, repayment period
may be extended upto a maximum of five years (including the one year moratorium period). In all
restructured loan accounts, moratorium period of at least one year shall be considered. Banks may not
insist on additional collateral security for such restructured loans. 3. Asset Classification: The
restructured portion of the short term as well as long-term loans may be treated as current dues and
need not be classified as NPA. The asset classification of these term loans would thereafter be governed by
the revised terms and conditions. The asset classification shall continue to be governed by the original
terms and conditions of its sanction. Additional finance, if any, shall be treated as "standard asset" and its
future asset classification will be governed by the terms and conditions of its sanction. The benefit of asset
classification of the restructured account as on the date of natural calamity shall be available only if the
restructuring is completed within a period of three months from the date of declaration of the natural
calamity by the Government. The accounts that are restructured for the second time or more on account
of recurrence of natural calamities shall retain the same asset classification category on each
restructuring. Accordingly, for a restructured standard asset, the subsequent restructuring necessitated on
account of a natural calamity shall not be treated as second restructuring, i.e., the standard asset
classification shall be maintained. 4. Providing Fresh Loans: Once the decision to reschedule loans is taken
by SLBC/DCC, pending conversion of short-term loans, banks shall grant fresh crop loan to the affected
farmers based on the scale of finance of the crop and the cultivation area. Banks shall also grant
consumption loan up to Rs. 10,000/- to existing borrowers without any collateral. The limit may, however,
be enhanced beyond Rs. 10,000/- at the bank's discretion. 5. Riots and Disturbances: Whenever RBI advises
the banks to extend rehabilitation assistance to the riot/ disturbance affected persons, the aforesaid
guidelines shall broadly be followed by banks for the purpose. Only genuine persons, duly identified by the
State Administration as having been affected by the riot/ disturbance will be provided assistance as per
the guidelines. In the event of large scale riots where most parts of the State/Area are affected and the
State Administration is not in a position to identify the riot/disturbance affected persons and subject to
SLBC's specific decision, the onus of identifying 'genuine persons' will rest with banks. 6. Natural Calamities
Portal: Monthly Reporting: Banks shall upload the actual data on relief measures every month by the 10th
of the following month on the portal (https://dbieshi.org.in/DCP/). In case there is no natural calamity
and/or relief measures extended, a 'NIL' statement shall be uploaded.
Disbursal of loan amount in cash (March 09 2017): As per extant guideline's, NB 's should ensure that
high value loans against gold of Rsl lakh and above must only be disbursed by cheque. Now, RBI has
advised that in line with the rules issued under Section 269SS and 269T of the Income Tax Act, 1961,
the relevant threshold limit will be Rupees Twenty thousand instead of Rs 1 lakh.
Repayment of Gold Loan (February 16, 2017): As per extant guidelines, Regional Rural Banks (RRBs) are
permitted to grant gold loans up to Rs.1.00 lakh with bullet repayment option. Now, RBI has decided to
increase the quantum of loan that could be granted under the scheme, from Rs.1.00 lakh to Rs.2.00
lakh subject to the following conditions: (i) The period of the loan shall not exceed 12 months from the
date of sanction. (ii) Interest will be charged to the account at monthly rests but will become due for
payment along with principal only at the end of 12 months from the date of sanction. (iii) RRBs should
maintain a Loan to Value (LTV) ratio of 75% on the outstanding amount of loan including the interest on
an ongoing basis, failing which the loan will be treated as a Non Performing Asset (NPA). The crop loans
sanctioned against the collateral security of gold/gold ornaments shall continue to be governed by the
extant income recognition, asset classification and provisioning norms for such loans.
Revised.Kisan Credit Card (KCC) Scheme (October 13, 2016): RBI has decided to make certain changes
in the revised KCC Scheme. The revised guidelines are given below: "Besides the mandatory crop
insurance, the KCC holder should have the option to take benefit of any type of Assets Insurance,
Accident Insurance (including PAIS), and Health Insurance (wherever product is available) and
have premium paid through his KCC account. Premium has to be borne by farmers/bank according
to the terms of the Scheme. Farmer beneficiaries should be made aware of the insurance cover
available and their consent (except in case of crop insurance, it being mandatory) is to be
obtained, at the application stage itself. "
Pradhan Mantri Fasal Bima Yojna (August 25, 2016): RBI had advised banks to ensure coverage of
100% of defined loanee farmers along with good number of non-loanee farmers to achieve the
defined objectives and targets fixed under the Scheme. Further, banks are also expected to
capture all relevant data including land and crop details of all loanee farmers and non-loanee
farmers availing crop insurance through the branches.
3B. MSME
1. Encouraging formalisation of MSME sector (June 6, 2018): Having regard to the input credit
linkages and ancillary affiliations, RBI has now decided to temporarily allow banks and NBFCs to classify
their exposure, as per the 180 days past due criterion, to all MSMEs, including those not registered
under GST, as a 'standard' asset, subject to the following conditions: (a) The aggregate exposure,
including non-fund based facilities, of banks and NBFCs to the borrower does not exceed Rs 250 million
as on May 31, 2018. (b) The borrower's account was standard as on August 31, 2017. (c) The payments
due from the borrower as on September 1, 2017 and falling due thereafter up to December 31, 2018
were/are paid not later than 180 days from their original due date. In respect of dues payable by GST-
registered MSMEs from January 1, 2019 onwards, the 180 days past due criterion shall be aligned to the
extant IRAC norms in a phased manner, as given below. However, for MSMEs that are not registered
under GST as on December 31, 2018, the asset classification in respect of dues payable from 01.01.2019
onwards shall immediately revert to the extent of IRAC norms :
Period during which any payment falls Time permitted
September 1, 2017 - December 31, 2018due 180 days
January 1, 2019 - February 28, 2019 150 days
March 1, 2019 to April 30, 2019 120 days
May 1, 2019 onwards 90 days
Union Cabinet decides to revise criteria for MSME ( Feb 2018): The Union cabinet approved a
proposal to redefine micro, small and medium enterprises, or MSMEs, based on their annual
revenue. According to the government's new definition, businesses with annual sale up to Rs5 crore
will be called a micro enterprise, those with sales between Rs5 crore and Rs75 crore will be
deemed as small and those with sales revenue between Rs75 crore and Rs250 crore will be
classified as medium-sized enterprises.
Investment in plant and machinery for the purpose of classification as Micro, Small and Medium
Enterprises — documents to be relied upon (July 13, 2017): While calculating the investment in plant
and machinery, the original price thereof, shall be taken into account, irrespective of whether the plant
and machinery are new or second hand. Ministry of MSME, GoI, have clarified that for ascertaining the
investment in plant and machinery for classification of an enterprises as Micro, Small and Medium, the
following documents could be relied upon: (i) A copy of the invoice of the purchase of plant and
machinery; or (ii) Gross block for investment in plant and machinery as shown in the audited accounts;
or (iii) A certificate issued by a Chartered Accountant regarding purchase price of plant and machinery.
For the investment In plant and machinery for the purpose of classification of an enterprise as Micro,
Small or Medium, the purchase value of the plant and machinery is to be reckoned and not the book
value (purchase value minus depreciation).
Interest subsidy hiked for MSMEs : To boost MSME sector exports, RBI has raised the interest subsidy on
post and pre-shipment export credit from 3% to 5%. Exporters get the subsidy under the ‘Interest
Equalization Scheme on Pre and Post Shipment Rupee Export Credit’.
One-time restructuring of MSME loans allowed : The Reserve Bank of India (RBI) has introduced a one-
time restructuring scheme for micro, small and medium enterprises (MSMEs) with a maximum exposure of
Rs. 25 crores. The restructuring has to be implemented by March 31, 2020 and banks will incur an
additional provision of 5% for the restructured accounts. To be eligible, the MSME account should remain
a ‘Standard Asset’ as of January 1. Accounts in default can be restructured only if their asset
classification has not been downgraded. A restructured MSME account will be downgraded to NPA, and
will slip into progressively lower asset classification and higher provisioning requirements. After a year,
such an account shall be considered for upgrade to ‘standard’, only if its debt servicing does not remain
due for more than 30 days. Banks and NBFCs should have board-approved policies on restructuring and
should disclose the restructured accounts.
3C.FINANCIAL INCLUSION & Govt. Sponsored Schemes

QUALIFYING ASSETS CRITERIA - REVIEW OF LIMITS Taking into consideration the important role played
by MFIs in delivering credit to those in the bottom of the economic pyramid and to enable them play
their assigned role in a growing economy, RBI has increased the household income limits for borrowers of
NBFC-MFIs from the current level of For Rural Areas: Rs.1,00,000 For Urban Areas: Rs.1,60,000 For Semi
Urban Areas: Rs.1,25,000 and Rs.2,00,000 The limit on total indebtedness of the borrower has been
increased from Rs.1,00,000 to Rs.1,25,000. In light of the revision to the limit on total indebtedness, the
limits on disbursal of loans have been raised from for first cycle Rs.60,000 to Rs.1,00,000 & for
subsequent cycles Rs.75,000 to Rs.1,25,000.
Direct Benefit Transfer (DBT) Scheme – Implementation Further to RBI directions dated 09.07.13, on use
of Aadhaar to facilitate delivery of social welfare benefits by direct credit to the bank accounts of
beneficiaries, banks have been advised by RBI (13.08.19) to ensure that opening of bank accounts and
seeding of Aadhaar numbers with existing or new accounts of eligible beneficiaries opened for the
purpose of DBT under social welfare schemes, is in conformity with the provisions listed in KYC Master
directions dated 29.05.19 and provisions of Prevention of Money Laundering (PML) Rules.
LENDING BY BANKS TO NBFCs FOR ON-LENDING  In order to boost credit to the needy segment of
borrowers, RBI has been decided that bank credit to registered NBFCs (other than MFIs) for on-lending
will be eligible for classification as priority sector under respective categories subject to the following
conditions:  Agriculture: On-lending by NBFCs for ‘Term lending’ component under Agriculture will be
allowed up to Rs. 10 lakh per borrower.  Micro & Small enterprises: On-lending by NBFC will be allowed
up to Rs. 20 lakh per borrower.  Housing: Enhancement of the existing limits for on-lending by HFCs
from Rs. 10 lakh per borrower to Rs. 20 lakh per borrower.  Under the above on-lending model, banks
can classify only the fresh loans sanctioned by NBFCs out of bank borrowings. However, loans given by
HFCs under the existing on-lending guidelines will continue to be classified under priority sector by
banks.  Bank credit to NBFCs for On-Lending will be allowed upto a limit of five percent of individual
bank’s total priority sector lending on an ongoing basis. Further, the above instructions will be valid for
the current financial year upto March 31, 2020 and will be reviewed thereafter. However, loans disbursed
under the on-lending model will continue to be classified under Priority Sector till the date of
repayment/maturity.
Banking Services – Basic Savings Bank Deposit Account (BSBDA) The Basic Savings Bank Deposit (BSBD)
Account was designed as a savings account which will offer certain minimum facilities, free of charge, to
the holders of such accounts. In the interest of better customer service, RBI decided (on 10.06.19) to
make certain changes in the facilities associated with the account. Banks are to offer the following basic
minimum facilities in the BSBD Account w.e.f 01.07.19, free of charge, without any requirement of
minimum balance.
1. Cash deposit at branch or 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 The BSBD
Account shall be considered a normal banking service available to all. Banks can provide additional value-
added services, including issue of cheque book, beyond the above minimum facilities, which may/may
not be priced (in non-discriminatory manner). The availment additional services shall be at option of
customers. Banks shall not require the customer to maintain a minimum balance. Offering such
additional services will not make it a non-BSBD Account, if prescribed minimum services are provided
free of charge. 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. Before
opening a BSBD account, a bank to take a declaration from that he/she is not having a BSBD account in
any other bank.
Applicable Average Base Rate to be charged by NBFCMFIs for the Quarter Beginning April 01, 2019
On 07.02.14, RBI had informed NBFC-MFIs regarding pricing of credit, stating that RBI will, on the last
working day of every quarter, advise the average of the base rates of the 5 largest commercial banks for
arriving at the interest rates to be charged by NBFC-MFIs to its borrowers in the ensuing quarter.
On 29.03.19, RBI communicated that the applicable average base rate to be charged by Non-Banking
Financial Company – Micro Finance Institutions (NBFC-MFIs) to their borrowers for the quarter beginning
April 01, 2019 will be 9.21 per cent.
Roadmap for unbanked villages having population More than 5000 (June 8, 2017): SLBCs had been
advised to identify villages with population above 5000 without a bank branch of a scheduled
commercial bank in their State and allot these villages among scheduled commercial banks (including
Regional Rural Banks) for opening brick and mortar branches. Further, RBI has issued final guidelines on
'Banking Outlets' with a view to facilitate financial inclusion as also to provide flexibility to banks on the
choice of delivery channel. SLBC Convenor banks should review and identify the unbanked rural centres
(URCs) in villages with population above 5000, in light of the revised guidelines on rationalisation of
branch authorisation policy and ensure that such unbanked rural centres in villages with population
above 5000, if any, are banked forthwith by opening of CBS enabled banking outlet. A confirmation
stating that all unbanked rural centres in villages with population above 5000 have been banked, may
be furnished to the respective Regional Office of Financial Inclusion and Development Department of
Reserve Bank of India latest by December 31, 2017.
Financial Literacy Week (April 13, 2017): To emphasize the Importance of financial literacy, RBI has
decided to observe the week June 5-9, 2017 as Financial Literacy Week across the country. The literacy
week will focus on four broad themes, viz. KYC, Exercising Credit Discipline, Grievance Redressal and
Going Digital (UPI and *99#).
Compliance to provisions of Master Direction en Know Your Customer (KYC) (December 15, 2016): As
per Master Direction on Know Your Customer (KYC), (i) concurrent/internal audit system of the
Regulated Entities (REs) has to verify the compliance with KYC/AML policies and procedures and submit
quarterly audit notes and compliance to the Audit Committee; (ii) banks should follow instructions on
operation of 'Small Accounts', and (iii) the Permanent account number (PAN) of customers shall be
obtained and verified while undertaking transactions as per the provisions of Income Tax (I.T.) Rule
114B applicable to banks, as amended from time to time. Form 60 shall be obtained from persons who
do not have PAN. RBI has now reiterated that ,(i):In respect of 'Small Accounts', the prescribed
limits/conditions shall not be breached. If any customer desires to have, operations beyond the
stipulated limits, the same shall be allowed only after complying with requirements for opening a
412.f.mal,,account including completion of CDD/KYC procedures which include quoting of PAN/Form 60
while opening an account with a bank, NBFC, etc. If any account is rendered ineligible for being
classified as a small account due to credits/balance in the account exceeding the permissible limits,
withdrawals may be allowed within the limit prescribed for small accounts where the limits thereof
have not been breached; (iii) In respect of KYC compliant accounts where the required CDD procedure
has been complied with, REs shall ensure compliance regarding quoting of PAN/obtaining of Form 60 for
all transactions in terms of I.T.Rule 114 B which .includes opening of accounts with banks, NBFCs, etc.
No debit transaction, transfer or otherwise shall be allowed in accounts which do not comply with the
above mentioned requirements. To begin with, this rule shall be strictly applied in accounts where both
the thresholds listed below are reached: (a) balance of rupees five lakh or more; and (b) the total
deposits (including credits by electronic or other means) made after November 9, 2016, exceed rupees
two lakh.
Aadhaar-based Authentication for Card Present Transaction (December 02, 2016): As per extant RBI
guidelines, on Security and Risk Mitigation Measures for Card Present Transactions, all new card present
infrastructure has to be enabled for both EMV Chip and PIN and Aadhaar (biometric validation)
acceptance. RBI, vide circular dated September 29, 2016 advised that all new card acceptance
infrastructure deployed with effect from January 1, 2017 are enabled for processing payment
transactions using Aadhaar-based biometric authentication also. Now, RBI has decided to extend the
time for deployment of Aadhaar-enabled devices till June 30, 2017. .
Branch Authorisation - Census data 2011 (September 1, 2016): RBI has advised that as the Census data
for 2011 are available in public domain, banks should follow Census 2011 w.e.f. September 1, 2016 for
all purposes of categorisations. Details of tier-wise classification of centres based on population are
given below: i) Classification of centres (tier-wise) Population - Tier 1 - 1, 00,000 and above; Tier 2 -
50,000 to 99,999; Tier 3 - 20,000 to 49,999; Tier 4 - 10,000 to 19,999; Tier 5 - 5,000 to 9,999; Tier 6 -
Less than 5000; ii) Population-group wise classification of centres - Rural Centre Population up to 9,999;
Semi-urban centre - from 10,000 to 99,999; Urban centre - from 1, 00,000 to 9, 99,999; Metropolitan
centre - 10, 00,000 and above
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMDBY) - Amendments (June 30, 2016): With effect from
June 1, 2016 claims for deaths which occur during the first 45 days from the date of enrolment will not
be paid, effectively meaning that the risk cover will commence only after the completion of 45 days from
the date of enrolment into the scheme by the member. However, deaths due to accidents will be exempt
from the Lien Clause.
Post Office (Postal Orders/Money Orders), 2015 (February 04, 2016): General permission has been given
to any person to buy foreign exchange from any post office.in India in the form of postal order or money
order.
Direct Benefit Transfer (DBT) Sch eme — Seeding of Aadhaar in Rank Accounts: (January 14,
2016): RBI has advised that in view of the Hon'ble Supreme Court of India's interim orders dated
August 11, 2015 and October 15, 2015 on usages of Aadhaar, use of Aadhaar Card and seeding of
bank accounts with Aadhaar numbers is purely voluntary and it is not mandatory.
Financial Literacy Centres (FLCs) (January 14, 2016): The FLC being a part of the lead bank office
or a rural branch should have a separate room/space with a seating capacity of minimum 10 members
to address walk in customers. Minimum of one outdoor camp per month by each FLC and rural branch
of banks. The special camps need to be conducted for a period of one year.
Roadmap for opening brick and mortar branches in villages with population more than 5000
without a bank branch of a scheduled commercial bank (December 31, 2015): SLBC Convenor banks
should identify villages with population above 5000 without a bank branch of a scheduled commercial
bank in their State. The identified villages may be allotted among scheduled commercial banks
(including Regional Rural Banks) for opening of branches. The opening of bank branches under this
Roadmap should be completed by March 31, 2017.
4. BASEL, RISK MANAGEMENT & PRUDENTIAL NORMS
Risk Weight for Consumer Credit except credit card receivables As per extant instructions, consumer
credit, including personal loans and credit card receivables but excluding educational loans, attracts a
higher risk weight of 125 per cent or higher, if warranted by the external rating of the counterparty. On
a review, RBI decided (12.09.19) to reduce the risk weight for consumer credit, including personal loans,
but excluding credit card receivables, to 100%. Other stipulations remain the same.
Basel III Regulations- Implementation of Leverage Ratio On Jun 28, 2019, RBI decided that the
minimum Leverage Ratio shall be 4% for Domestic Systemically Important Banks (DSIBs) and 3.5% for
other banks. Both the capital measure and exposure measure along with Leverage Ratio are to be
disclosed on a quarter-end basis. Banks must meet the minimum Leverage Ratio requirement at all times.
These guidelines become effective from the quarter commencing October 1, 2019.
CHIEF RISK OFFICER FOR NBFCs  The Reserve Bank of India has decided that, since the NonBanking
Financial Companies (NBFCs) play an important role in direct credit intermediation, NBFCs with asset size
of more than Rs. 50 billion shall appoint a Chief Risk Officer (CRO) with clearly specified roles and
responsibilities. The CRO will function independently to ensure highest standards of risk management.
As per the guidelines, the CRO shall be a senior official in the hierarchy of an NBFC and shall possess
adequate professional qualification/experience in the area of risk management. The CRO shall be
appointed for a fixed tenure with the approval of the Board and can be transferred / removed from his
post before completion of the tenure only with the approval of the Board. Any premature transfer/
removal shall be reported to the Department of Non-Banking Supervision of the Regional Office of the RBI
under whose jurisdiction the NBFC is registered. In case the NBFC is listed, any change in incumbency
of the CRO shall also be reported to the stock exchanges.
Risk Weights for exposures to NBFCs -At present claims on rated as well as unrated Non-deposit Taking
Systemically Important Non-Banking Financial Companies (NBFC-ND-SI), other than Asset Finance
Companies (AFCs), Non-Banking Financial Companies – Infrastructure Finance Companies (NBFCs-IFC), and
Non-banking Financial Companies – Infrastructure Development Funds (NBFCs-IDF), have to be uniformly
risk weighted at 100%. Exposures to AFCs, NBFCs – IFC, NBFCs – IDF and other NBFCs which are not NBFC-
ND-SI, are risk weighted as per rating assigned by the rating agencies accredited by the Reserve Bank of
India.On 22.02.19, RBI decided that exposures to all NBFCs, excluding Core Investment Companies (CICs),
will be risk weighted as per the ratings assigned by the rating agencies registered with SEBI and accredited
by the Reserve Bank of India, in a manner similar to that of corporates. Exposures to CICs, rated as well as
unrated, will continue to be risk-weighted at 100%.
Basel III Capital Regulations- Review of transitional arrangements
As per extant RBI guidelines, last tranche of 0.625% of Capital Conservation Buffer (CCB) was to be
implemented by 31.03.2019. On 10.01.19, RBI decided to defer the implementation of this tranche from
March 31, 2019 to March 31, 2020. Accordingly, minimum capital conservation ratios as applicable from
March 31, 2018 will also apply from March 31, 2019 till the CCB attains the level of 2.5% on March 31, 2020.
The pre-specified trigger for loss absorption through conversion / writedown of Additional Tier 1
instruments (PNCPS and PDI) shall remain at 5.5% of RWAs and will rise to 6.125% of RWAs on March 31,
2020.
Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), FALLCR against credit
disbursed to NBFCs and HFCs On 19.10.18, banks were permitted by RBI to reckon government securities
as Level 1 HQLA under FALLCR within the mandatory SLR requirement upto 0.5 per cent of the bank’s
NDTL in respect of their incremental lending to NBFCs and HFCs after October 19, 2018. This facility is
available up to December 31, 2018. Further, the single borrower limit for NBFCs (not financing
infrastructure) was increased from 10 per cent to 15 per cent of capital funds till December 31, 2018. In
order to further facilitate banks to lend to NBFCs and HFCs as indicated above, RBI decided on 28.12.18,
to extend the aforesaid facilities upto March 31, 2019. It may be noted that with effect from April 1,
2019, banks shall be guided by the instructions as per circular dated 01.12.16, in terms of which banks’
exposures to a single NBFC shall be restricted to 15 percent of their eligible capital base (Tier-1 capital).
NSFR norms for banks from April 2020: RBI -Net stable funding ratio (NSFR) norms, which mandate banks
to maintain a stable funding profile vis-à-vis the composition of their assets and off-balance sheet
activities, will be operational from April 2020. NSFR is defined as the amount of available stable funding
relative to the amount of required stable funding. After the global financial crisis of 2007, the Basel
Committee on Banking Supervision (BCBS) proposed certain reforms to strengthen global capital and
liquidity regulations for promoting a more resilient banking sector.
Revised norms for LCR to boost liquidity to lenders - RBI has provided an additional 2% liquidity window
within the mandatory Statutory Liquidity Ratio (SLR) requirement to the lenders, by tweaking Liquidity
Coverage Ratio (LCR) norms. This move will harmonize the liquidity requirements of banks with LCR; will
improve the banks’ cash position; will help release additional liquidity for lending by banks; and will also
hopefully make forex transactions easier by increasing the last-mile touch points of regulated entities to sell
foreign exchange for non-trade current account transactions.
Basel III Framework on Liquidity Standards — Net Stable Funding Ratio (NSFR) (November 29, 2018):
RBI had issued guidelines on NSFR on May 17, 2018. Now, RBI has decided that the NSFR guidelines will
come into effect from April 1, 2020.
Basel HI Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR) (October 19, 2018):
Presently, the assets allowed as the Level 1 High Quality Liquid Assets (HQLAs) for the purpose of
computing the LCR of banks, inter alia, include (a) Government securities in excess of the minimum
SLR requirement and, (b) within the mandatory SLR requirement, (i) Government securities to the
extent allowed by RBI under Marginal Standing Facility (MSF) [presently 2 per cent of the bank's NDTL]
and (V) under Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) [presently 13 per cent of
the bank's NDTL]. Thus, total carve out from SLR available to banks is 15 per cent of their NDTL. RBI has
decided that, with effect from 19 October, 2018, banks will be permitted to also reckon Government
securities held by them up to an amount equal to their incremental outstanding credit to NBFCs and
Housing Finance Companies (HFCs), over and above the amount of credit to NBFCs and HFCs outstanding
on their books as on October 19, 2018, as Level 1 HQLA under FALLCR within the mandatory SLR
requirement. This will be in addition to the existing FALLCR of 13 per cent of NDTL, and limited to 0.5
per cent of the bank's NDTL. The above additional FALLCR will be available up to December 31, 2018.
Moreover, the single borrower exposure limit for NBFCs which do not finance infrastructure stands
increased from 10 percent to 15 percent of capital funds; up to December 31, 2018.
Voluntary Transition of Primary (Urban) Co-operative Banks (UCBs) into Small Finance Banks (SFBs)
(September 27, 2018): RBI has introduced a scheme for voluntary transition of a UCB into SFB by way of
transfer of assets and liabilities. Base financial benchmarks for eligibility: UCBs with a minimum net worth of
Rs.500 million and maintaining Capital to Risk (Weighted) Assets Ratio of 9% and above are eligible to apply
for voluntary transition to SFB under this scheme. 3. Capital requirement: The minimum net worth of the
proposed SFB shall be Rs.1 billion from the date of commencement of business. As small finance banks are
required to maintain a minimum capital adequacy ratio of 15 per cent of its risk weighted assets (RWA) on a
continuous basis, availability of adequate capital shall be ensured. Promoters shall maintain at least 26% of
the paid-up equity capital.
Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by banks —
Valuation of State Development Loans (July 27, 2018): RBI has decided that securities issued by
each state government, i.e., State Development Loans (SDLs), shall be valued in a manner which
would objectively reflect their fair value based on observed prices/yields. Financial Benchmarks
India Pvt. Ltd. (FBIL) shall make available prices for valuation of SDLs based on the above principles
with effect from September 30, 2018 which should be used for valuation of SDLs from that date.
Revised Prompt Corrective Action (PCA) Framework for Banks (April 13, 2017): RBI has decided to
revise the PCA framework for banks. The provisions of the revised PCA framework will be effective from
April 1, 2017 based on the financials of the banks for the year ended March 31, 2017. The salient features
are given below: (a) Capital, asset quality and profitability continue to be the key areas for monitoring in
the revised framework; (b)0-Indicators to be tracked for Capital, asset quality and profitability would be
CRAR/ Common Equity Tier I ratiol, Net NPA ratio2 and Return on Assets3 respectively;(c) Leverage
would be monitored additionally as part of the PCA framework; (d) Breach of any risk threshold (as
detailed under) would result in invocation of PCA; (e) The PCA framework would apply without exception
to all banks operating in India including small banks and foreign banks operating through branches or
subsidiaries based on breach of risk thresholds of identified indicators; (f) A bank will be placed under
PCA framework based on the audited Annual Financial Results and the Supervisory Assessment made by
RBI. However, RBI may impose PCA on any bank during the course of a year (including migration from one
threshold to another) in case the circumstances so warrant. PCA will be initiated if capital adequacy
ratio of a bank including CCB is less than 10.25% or CET I ratio is less than 6.75% or Net NPA ratio is 6% or
above or Negative Return on Assets for 2 consecutive years or Leverage Ratio is 4% or less.
Issue of comprehensive Credit Information Reports (August 2, 2017): As per extant guidelines issued in June
2014, in the case of multiple borrowings of the same customer, Credit Information Companies (CICs) should
include information on all accounts, both current and past, in her/his Credit Information Report (CIR). The
information may be provided in the order of live accounts, closed accounts and overall position of NPA /wilful
default/suit filed status, with limits and liability for each account. RBI has observed, however, that some CICs
are following the practice of offering limited versions of CIRs to Credit Institutions (CIs) based on credit
information available in specific modules such as commercial data, consumer data or MFI data. Accordingly,
CICs are charging differential rates for such specific reports. As the limited versions of CIRs based on the
credit information on a borrower available in a specific module capture only the credit information of the
borrower available in the particular module, the lenders may remain unaware of the entire credit history of
the borrower, if any, available in other modules. This can adversely affect the quality of credit decisions of
the CIs. Therefore, RBI has directed CICs to ensure that. the CIR in respect of a borrower, furnished to the CI,
incorporates all the credit information available in all modules, e.g. consumer, commercial and MFI, etc., in
respect of the borrower.
Eligible Credit Rating Agencies — INFOMERICS Valuation and Rating Pvt Ltd. (INFOMERICS) (June 13,
2017) At present six domestic credit rating agencies viz. CARE, CRISIL, FITCH India, ICRA, Brickwork
Ratings- and SMERA have been accredited for the purpoSe of risk weighting the banks' claims for capital
adequacy purposes. Now, RBI has decided that banks may also use the ratings of the INFOMERICS
Valuation and Rating Pvt Ltd. (INFOMERICS).
Requirement of Net Owned Fund (NOF) for Asset Reconstruction Companies (April 28, 2017): RBI has
decided to fix the minimum NOF requirement for ARCs at Rs 100 crore on an ongoing basis with effect
from April 28, 2017. All the ARCs which are already registered with Reserve Bank of India as on April 28,
2017 and not having the revised minimum NOF as on date shall achieve a minimum NOF of Rs 100 crore
latest by March 31, 2019.
Prudential Guidelines — Banks' investment in units of REITs and InvITs ( April,8, 2017): RBI has
decided to allow banks to participate in Real Estate Investment Trusts (REITs) and Infrastructur'
Investment Trusts (InvITs) within the • overall ceiling of 20 per cent of their net worth permitted for
direct investments in shares, convertible bonds/ debentures, units of equity -oriented mutual funds and
exposures to Venture Capital Funds (VCFs) [both registered and unregistered], subject to the following
conditions: Banks should put in place a Board approved policy on exposures to REITs/ InvITs which lays
down an internal limit on such investments within the overall exposure limits in respect of the real
estate sector and infrastructure sector. Banks shall not invest more than 10 per cent of the unit capital
of an REIT/ InvIT.
Transunion CIBIL Limited (September 29, 2016): RBI, vide circular dated March 05, 2012 advised grant of
'Certificate of Registration' to Credit Information Bureau (India) Limited. The Companybas since changed its
name.-Accordingly, RBI as issued a new 'Certificate of Registration' to it on September 29, 2016 to carry on
the business of credit Information. The new name and address of the Company is Transunion CIBIL
Limited. •
Free Annual Credit Report to Individuals (September 1, 2016): The Committee to Recommend Data
Format for Furnishing of Credit Information to Credit Information Companies (Chairman: Shri Aditya Puri)
constituted by RBI had recommended that each customer of a credit institution should be provided one
base level consumer Credit Information Report (CIR) free of cost every year by each Credit Information
Company (CIC). Given the importance of the credit report in an individual's financial matters, he/she is
entitled to have a copy of the report upon request. Further, the objective of providing the free credit
report would not be fully met unless this report includes details that figure in the full credit report that is
accessed by the credit institutions while considering the request for fresh credit facilities. The report
should also provide an opportunity to the borrower to have the errors, if any, in her/his credit history
rectified. Taking into account these objectives, RBI has directed Credit Information Companies to provide
access in electronic format, upon request and after due authentication of the requester, to one free full
credit report (FFCR) including credit score, once in a year (January- December), to individuals whose credit
history is available with the CIC. This report must show the latest position of the credit institutions'
exposure to the individual as per records available with the CIC. The contents of the FFCR shall be the
same as appearing in the most detailed version of the reports on the individual provided to credit
institutions, including the credit score. These guidelines will be effective from January I, 2017. The CICs
shall notify on their website the procedure for accessing the FFCR.
Provisioning pertaining to fraud accounts: Banks should normally provide for the entire amount diie to
the bank or for which the bank is liable (including in-case of deposit accounts), immediately upon a fraud
being detected. While computing the provisioning requirement, banks may adjust financial collateral
eligible under Basel III Capital Regulations Capital Charge for Credit Risk (Standardised Approach), if any,
available with them with regard to the accounts declared as fraud account. However, to smoothen the
effect of such provisioning on quarterly profit and loss, banks have the option to make the provisions
over a period, not exceeding four quarters, commencing from the quarter in which the fraud has been
detected. Banks shall make suitable disclosures with regard to number of frauds reported, amount
involved in such frauds, quantum of provision made during the year and quantum of unamortised
provision debited from 'other reserves' as at the end of the year.
Basel III Capital Regulations — Revision (March 1, 2016): Revaluation reserves arising from change in the
carrying amount of a bank's property consequent upon its revaluation would be considered as common
equity tier 1 capital (CET1) instead of Tier 2 capital as hitherto. These would continue to be reckoned at
a discount of 55 per cent; Foreign currency translation reserves arising due to translation of financial
statements of a bank's foreign operations to the reporting currency may be considered as CETI. capital.
These will be reckoned at a discount of 25 per cent; Deferred tax assets arising due to timing
differences may be recognised as CET1 capital up to 10% of a bank's CET1 capital; These amendments
are applicable with effect from Mar 01, 2016.
Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), FALLCR against credit
disbursed to NBFCs and HFCs On 19.10.18, banks were permitted by RBI to reckon government securities
as Level 1 HQLA under FALLCR within the mandatory SLR requirement upto 0.5 per cent of the bank’s
NDTL in respect of their incremental lending to NBFCs and HFCs after October 19, 2018. This facility is
available up to December 31, 2018. Further, the single borrower limit for NBFCs (not financing
infrastructure) was increased from 10 per cent to 15 per cent of capital funds till December 31, 2018. In
order to further facilitate banks to lend to NBFCs and HFCs as indicated above, RBI decided on 28.12.18,
to extend the aforesaid facilities upto March 31, 2019. It may be noted that with effect from April 1,
2019, banks shall be guided by the instructions as per circular dated 01.12.16, in terms of which banks’
exposures to a single NBFC shall be restricted to 15 percent of their eligible capital base (Tier-1 capital).
Basel III Capital Regulations- Review of transitional arrangements
As per extant RBI guidelines, last tranche of 0.625% of Capital Conservation Buffer (CCB) was to be
implemented by 31.03.2019. On 10.01.19, RBI decided to defer the implementation of this tranche from
March 31, 2019 to March 31, 2020. Accordingly, minimum capital conservation ratios as applicable from March
31, 2018 will also apply from March 31, 2019 till the CCB attains the level of 2.5% on March 31, 2020.The pre-
specified trigger for loss absorption through conversion / writedown of Additional Tier 1 instruments
(PNCPS and PDI) shall remain at 5.5% of RWAs and will rise to 6.125% of RWAs on March 31, 2020.
Risk Weights for exposures to NBFCs :At present claims on rated as well as unrated Non-deposit Taking
Systemically Important Non-Banking Financial Companies (NBFC-ND-SI), other than Asset Finance
Companies (AFCs), Non-Banking Financial Companies – Infrastructure Finance Companies (NBFCs-IFC), and
Non-banking Financial Companies – Infrastructure Development Funds (NBFCs-IDF), have to be uniformly
risk weighted at 100%.Exposures to AFCs, NBFCs – IFC, NBFCs – IDF and other NBFCs which are not NBFC-
ND-SI, are risk weighted as per rating assigned by the rating agencies accredited by the Reserve Bank of
India.On 22.02.19, RBI decided that exposures to all NBFCs, excluding Core Investment Companies (CICs),
will be risk weighted as per the ratings assigned by the rating agencies registered with SEBI and accredited
by the Reserve Bank of India, in a manner similar to that of corporates. Exposures to CICs, rated as well as
unrated, will continue to be risk-weighted at 100%.
RISK MANAGEMENT SYSTEM – APPOINTMENT OF CHIEF RISK OFFICER (CRO) FOR NBFCs
With the increasing role of NBFCs in direct credit intermediation, there is a need for NBFCs to augment risk
management practices. While Boards of NBFCs should strive to follow best practices in risk management, it has
been decided that NBFCs with asset size of more than Rs.5000 crore shall appoint a CRO with clearly specified
role & responsibilities. The CRO is required to function independently so as to ensure highest standards of risk
management.
Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards (March
23, 2016): In addition to the assets prescribed under Level 2B, with effect from February 1, 2016,
Corporate debt securities (including commercial paper) can also be reckoned as Level 28 HQLAs, subject
to a 50% haircut.
5. NPA AND RECOVERY MANAGEMENT
SIDE-POCKETING- Segregation of bad debts or illiquid debt instruments from liquid portfolio is known as
“Side-pocketing”. SEBI, recently allowed mutual fund, this facility based on credit events to soothe the
nerves of Indian players who were worried over the fact that the illiquid bad debts were overshadowing
the returns generated by their liquid portfolio.
PERMISSION TO ACQUIRE FINANCIAL ASSET FROM OTHER ASSET RECONSTRUCTION CO’s In view of
amendment to the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities
Interest Act, 2002, RBI has decided to permit ARCs to acquire financial asset from other ARCs on
following conditions: a) The transaction is settled on cash basis; b) Price discovery for such transaction
shall not be prejudicial to the interest of Security Receipt holders; c) The selling ARC will utilize the
proceeds so received for the redemption of underlying Security Receipts; d) The date of redemption of
underlying Security Receipts and total period of realisation shall not extend beyond eight years from the
date of acquisition of the financial asset by the first ARC.
RELAXATION ON THE GUIDELINES TO NBFCS ON SECURITISATION TRANSACTIONS  In order to
encourage NBFCs to securitise / assign their eligible assets, RBI had in Nov, 2018 decided to relax the
Minimum Holding Period (MHP) requirement for originating NBFCs, in respect of loans of original maturity
above 5 years, to receipt of repayment of six monthly instalments or two quarterly instalments (as
applicable), subject to the requirement that Minimum Retention Requirement (MRR) for such
securitization / assignment transactions shall be 20% of the book value of the loans being securitized /
20% of the cash flows from the assets assigned.  On a review, RBI has decided to extend the
dispensation provided therein till December 31, 2019.
Resolution of Stressed Assets — Revised Framework (February 12, 2018): In view of the enactment
of the Insolvency and Bankruptcy Code, 2016 (IBC), RBI has decided to substitute the existing
guidelines on Resolution of Stressed Assets with a harmonised and simplified generic framework for
resolution of stressed assets. The extant instructions on resolution of stressed assets such as
Framework for Revitalising Distressed Assets, Corporate Debt Restructuring Scheme, Flexible
Structuring of Existing Long Term Project Loans, Strategic Debt Restructuring Scheme (SDR), Change
in Ownership outside SDR, and Scheme for Sustainable Structuring of Stressed Asset , (S4A) stand
withdrawn with effect from Feb 12, 2018. Accordingly, the Joint Lenders' Forum (JLF) as an
institutional mechanism for. resolution of stressed accounts also standS discontinued. All accounts,
including such accounts where ai / of the schemes have been invoked but not yet implemented, shall
be governed by the revised framework. The revival and rehabilitation of MSMEs as defined under 'The
Micro, Small and Medium Enterprises Development Act, 2006' shall continue to be guided by the
existing instructions. Restructuring of loans in the event of a natural calamity shall continue to be as
per the existing guidelines.Some details of the revised framework are given below:
Early identification and reporting of stress: Lenders shall identify incipient stress in loan accounts,
immediately on default2, by classifying stressed assets as special mention accounts SMA) as per the
following categories:
SMASub- Basis for classification — Principal or interest payment or any other
categories amount wholly or partly overdue between
SMA-0 01-30 days
SMA-1 31-60 days -
SMA-2 61-90 days
Lenders shall report credit information, including classification of an account as SMA to Central
Repository of Information on Large Credits (CRILC) on all borrower entities having aggregate exposure (all
fund based and non-fund based exposure) with the lenders of Rs 50 million and above with them. The
CRILC-Main Report will now be required to be submitted on a monthly basis effective April 1, 2018. In
addition, the lenders shall report to CRILC, all borrower entities in default (with aggregate exposure of
Rs 50 million and above), on a weekly basis, at the close of business on every Friday, or the preceding
working day if Friday happens to-be a holiday. The first such.weekly report shall be submitted for the
week ending February 23, 2018.
Submission of Financial Information to Information Utilities (December 19, 2017): According to Section
215 of Insolvency and Bankruptcy Code (IBC), 2016, a financial creditor shall submit financial information
and information relating to assets in relation to which any security interest has been created, to an
information utility (IU). The Insolvency and Bankruptcy Board of India (IBBI) has registered National E-
Governance Services Limited (NeSL) as the first IU under the IBBI (Ms) Regulations, 2017 on September
25, 2017.
Disclosure in the "Notes to Accounts" to the Financial Statements- Divergence in the asset
classification and provisioning (April 18, 2017): In order to ensure greater transparency and promote
better discipline with respect to compliance with IRACP norms, RBI has decided that banks shall make
suitable disclosures wherever either (a) the additional provisioning requirements assessed by RBI exceed
15 percent of the published net profits after tax for the reference period or (b) the additional Gross NPAs
identified by RBI exceed 15 percent of the published incremental Gross NPAs1 for the reference period,
or both. The disclosures, as above, shall be made in the Notes to Accounts in the ensuing Annual
Financial Statements published immediately following communication of such divergence by RBI to the
bank.
Publishing of photographs of Wilful defaulters (September 29, 2016): RBI has advised that: (i) A lending
institution can consider publication of the photographs of only those borrowers, including proprietors/
partners /directors / guarantors of borrower firms/ companies, who have been declared as wilful
defaulters following the mechanism set out In the RBI instructions. This shall not apply to the non-
whole lime directors who are exempted from being considered as wilful defaulters unless the special
conditions, in accordance with these instructions, are satisfied. (ii) The lending institutions shall
formulate a policy with the approval of their Board of Directors which clearly sets out the criteria
based on which the decision to publish the photographs of a person covered In paragraph (I) above will
be taken by them so that the approach is neither discriminatory nor Inconsistent. The lending institutions
shall not publish photographs of any other defaulting borrowers.
commercial or a part thereof by an agreement or instrument other than mortgage. CERSAI had started
registration of the data in respect of paragraphs 2 (a) to (c) above, for the security interests created on
or after January 22, 2016, w.e.f. May 25, 2016 for Scheduled Commercial Banks and w.e.f. July 1, 2016
for all other entities registered with them. Further, the registration of data in respect of paragraph 2(d)
above was commenced since June 8, 2017 for all banks and FIs registered with CERSAI. Meanwhile, the
banks/ FIs have also started registering the security interests created before January 22, 2016 (subsisting
records). However, RBI observed that the extent of registration on the CERSAI portal is very low, both for
current and subsisting records. On 27.12.18, Banks/FIs have been advised by RBI to complete filing the
charges pertaining to subsisting transactions by March 31, 2019. Banks/ FIs have also been advised to file
the current charges relating to all transactions with CERSAI on an ongoing basis.
SARFAESI extended to NBFCs (11 August 2016): The 2016 Amendment Bill brings several significant
changes to the SARFAESI Act. Importantly,' secured corporate debentures are brought under the purview
of the Act. A new necessity and invincibility is sought to be granted to registration of security interests
with Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI), with a
provision stating that unregistered security interests will not be enforceable at all. At the same time, if
there is a registered security interest, it will gain supremacy over all other conflicting or overlapping
claims, including those of the government. The SARFAESI Act has been extended to the notified NBFCs
with assets of Rs500 crore or more as per their last balance sheets. However, sections 13 to 19 of the
Act can be used only in respect of 'such security interest which is obtained for securing repayment of
secured debt with principal amount of rupees one crore and above'. A total of 196 systematically
important NBFCs, with assets of Rs500 crore or more as per their last balance sheets have been notified
as 'secured lenders' under the Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (SARFAESI Act). As such, these NBFCs may now enforce security interests on
assets charged to them, without having to resort to either judicial or arbitral authorities. Several of the
infrastructure finance companies had earlier been defined as 'public financial institutions' using section
4A of the Companies Act 1956. It appears that the threshold limit of Rsl crore refers to the facility, that
is, the original amount of lending, which is secured. The notification will cover existing facilities as
well.
Changes in RDB Act ( DRT): For appeal from DRT to DRAT, the period reduced from 45 days tO 30 days;
If borrower wants to appeal he is required to deposit 50% of judgement amount with DRAT (earlier it was
75%) and it can be reduced to 25% by DRAT (earlier it could be reduced to 0%)
Extension of relaxation on the guidelines to NBFCs on securitisation transactions On 29.11.18, RBI
has allowed relaxation on the guidelines to NBFCs on securitisation transactions. On a review on
29.05.19, RBI decided to extend the dispensation provided therein till December 31, 2019.
6. FOREIGN EXCHANGE AND INTERNATIONAL TRADE

NON-RESIDENT RUPEE ACCOUNTS – REVIEW OF POLICY -Any person resident outside India, having a
business interest in India, may open a Special Non-Resident Rupee A/c (SNRR A/c) with an authorised
dealer for the purpose of putting through bona fide transactions in rupees. With a view to promote the
usage of INR products by persons resident outside India, RBI in consultation with the Government of
India, to expand the scope of SNRR Account by permitting person resident outside India to open such
account for: External Commercial Borrowings in INR; Trade Credits in INR; Trade (Export/ Import)
Invoicing in INR; and Business related transactions outside International Financial Service Centre (IFSC)
by IFSC units at GIFT city like administrative expenses in INR outside IFSC, INR amount from sale of scrap,
government incentives in INR, etc. The account will be maintained with bank in India (outside IFSC).
Rationalised certain other provisions for operation of the Special Non Resident Rupee (SNRR) Account:
Remove the restriction on the tenure of the SNRR A/c opened for the purposes given as stated above as
the proposed transactions are more enduring in nature. Apart from Non-Resident Ordinary (NRO)
Account, permit credit of amount due / payable to non-resident nominee from account of a deceased
account holder to Non-Resident External (NRE) A/c or direct remittance outside India through normal
banking channels. The directions are issued under section 10(4) and 11(2) of the Foreign Exchange
Management Act, 1999 (42 of 1999).
EXPORT OF UNSOLD ROUGH DIAMONDS FROM SPECIAL NOTIFIED ZONE OF CUSTOMS WITHOUT EXPORT
DECLARATION FORM (EDF) FORMALITY For the lot / lots cleared at the center/s which are duly notified
under Customs Act, 1962 / specified by the Central Board of Indirect Taxes & Customs, Department of
Revenue, Ministry of Finance, Government of India for the above purpose, Bill of Entry shall be filed by
the buyer. AD bank may permit such import payments after being satisfied with bona-fides of the
transaction. Further, AD bank shall also maintain a record of such transactions. The directions contained
in this circular have been issued under Section 10(4) and Section 11(1) of the FEMA, 1999 (42 of 1999).
Priority Sector Loans - Export Credit-In order to boost the credit to export sector, RBI decided (on
20.09.19) to effect following changes pertaining to export credit: 1. Enhance the sanctioned limit, for
classification of export credit under PSL, from Rs.250 million per borrower to Rs.400 million per
borrower. 2. Remove the existing criteria of ‘units having turnover of up to Rs.1 billion’ The existing
guidelines for domestic scheduled commercial banks to classify ‘Incremental export credit over
corresponding date of the preceding year, upto 2 per cent of ANBC or Credit Equivalent Amount of Off-
Balance Sheet Exposure, whichever is higher’ under PSL will continue.
Voluntary Retention Route (VRR) for Foreign Portfolio Investors (FPIs) investment in debt
1.RBI drawn attention of (AD Category-I) banks to the following regulations: i. Foreign Exchange
Management (Permissible Capital Accounts Transactions) Regulations, 2000 notified vide Notification No.
FEMA 1/ 2000-RB dated May 03, 2000; ii. Foreign Exchange Management (Borrowing and Lending)
Regulations, 2018 notified vide Notification No. FEMA 3(R)/2018-RB dated December 17, 2018; iii. Foreign
Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations,
2017 notified vide Notification No. FEMA.20(R)/2017RB dated November 07, 2017; and iv. Foreign
Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 notified vide
Notification No. FEMA 25/RB – 2000 dated May 03, 2000. RBI referred (on 24.05.9) to circular dated
01.03.19 on ‘Voluntary Retention Route’ (VRR) for Foreign Portfolio Investors (FPIs) investment in debt.
Based on the feedback received, the directions have been revised. These changes include, inter alia, the
following:a) Introduction of a separate category, viz., VRR-Combined. b) The requirement to invest at
least 25% of the Committed Portfolio Size within one month of allotment has been removed. c) FPI are
provided with an additional option at the end of the retention period, viz., continue to hold their
investment until the date of maturity or the date of sale, whichever is earlier. FPIs that were allotted
investment limits under the ‘tap’ open during March 11, 2019 - April 30, 2019 may, at their discretion,
convert their full allotment to VRR-Combined.
Export and Import of Indian Currency -As per extant regulation, a person may take or send out of India
to Nepal or Bhutan and bring into India from Nepal or Bhutan, currency notes of Government of India and
Reserve Bank of India for any amount in denominations up to Rs.100. Further, an individual may carry to
Nepal or Bhutan, currency notes of Reserve Bank of India denominations above Rs.100, i.e. currency
notes of Rs.500 and/or Rs.1000 denominations, subject to a limit of Rs.25,000. On 20.03.19, RBI decided
that an individual travelling from India to Nepal or Bhutan may carry RBI currency notes in Mahatma Gandhi
(New) Series of denominations Rs.200 and/or Rs.500 subject to a total limit of Rs.25,000. Instructions
regarding currency notes of Government of India and RBI for any amount in denominations up to Rs.100/-
shall continue as hitherto.
Establishment of Branch Office (BO) / Liaison Office (LO) / Project Office (PO) or any other place of
business in India by foreign entities -
The extant Regulations (31.03.16) regarding requirement of prior approval of RBI, for opening of a
Branch Office (BO) / Liaison Office (LO) / Project Office (PO) or any other place of business in India,
where the principal business of the applicant falls in the Defence, Telecom, Private Security and
Information and Broadcasting sector, have been reviewed by RBI.On 28.03.19, RBI informed AD banks that
for opening of a BO/ LO/PO or any other place of business in India, where the principal business of the
applicant falls in the Defence, Telecom, Private Security and Information and Broadcasting sector, no prior
approval of RBI shall be required, if Government approval or license/permission by the concerned Ministry/
Regulator has been granted. Further, in the case of proposal for opening a PO relating to defence sector, no
separate reference or approval of Government of India shall be required if the said non-resident applicant has
been awarded a contract by/entered into an agreement with the Ministry of Defence or Service Headquarters
or Defence Public Sector Undertakings. It is clarified that the term “permission” used in the Notification does
not include general permission, if any, available under Foreign Direct Investment in the automatic route, in
respect of the above four sectors.
Compilation of R-Returns: Reporting under FETERS -To facilitate compilation of estimates of bilateral
trade in services, RBI decided (20.03.19) to incorporate an additional field for capturing the country code
of ultimate exporter/importer in the BoP file-format under FETERS. For export of services, banks may use
the transaction information available with them to report country-code of the ultimate exporting country.
Further Form-A2 has also been revised for capturing the required country information for import of
services. The revised format is for reporting of R-Returns on fortnightly basis (15th and end-month) for
forex transactions performed w.e.f. April 01, 2019. AD Banks should make the required changes in their
work-flows and information systems to capture the required additional data accordingly to comply with
the guidelines.
Investment by Foreign Portfolio Investors (FPI) in Government Securities Medium Term Framework
Revision of investment Limits for 2019-20 -
1. FPI investment limit in Central Government securities (G-secs), State Development Loans (SDLs) and
corporate bonds shall be 6%, 2%, and 9% of outstanding stocks of securities, respectively, in FY 2019-20.
2.The allocation of increase in G-sec limit over the two sub-categories – ‘General’ and ‘Longterm’ – has
been set at 50:50 for the year 2019 20. The entire increase in limits for SDLs has been added to ‘General’
sub-category of SDLs.
3. The Coupon reinvestment arrangement for G-secs extended to SDLs. Accordingly, the revised limits
for the various categories, after rounding off, would be as under :
Revised Limits for FPI Investment in Debt - 2019-20 (Rupees billion)
G- Sec G- Sec SDL SDL Cor p Total Gener al L ong Ter m Gener alLong Ter mBonds Debt
Current Limit 2,233 923 381 71 2,891 6,499
New Limit : HY Apr-Sep, 2019 2,347 1,037 497 71 3,031 6,983
New Limit : HY Oct 19-Mar 2020 2,461 1,151 612 71 3,170 7,465
Non-resident Participation in Rupee Interest Rate Derivatives Markets (Reserve Bank) Directions,
2019
RBI issued the Directions on 27.03.19. These Directions shall be applicable to Rupee interest rate
derivative transactions in India, undertaken on recognized stock exchanges, electronic trading platforms
(ETP) and Overthe-Counter (OTC) markets to the extent stated herein. A non-resident can undertake
transactions in the Rupee interest rate derivatives markets to hedge an exposure to Rupee interest rate
risk and for purposes other than hedging.
Transactions for the purpose of hedging interest rate risk: A nonresident may undertake these
derivatives in India to hedge interest rate risk using any permitted interest rate derivative product
transacted on recognized stock exchanges, ETPs or OTC markets.
Transactions for purposes other than hedging interest rate risk i. Non-individual Non-residents may
undertake Overnight Indexed Swaps (OIS) transactions :
(a) These transactions may be undertaken directly with a market-maker in India, or by way of a ‘back-
to-back’ arrangement through a foreign branch/ parent/group entity (foreign counterpart) of the
market-maker. (b) A market-maker shall enter into a ‘back-to-back’ arrangement.
1) The Price Value of a Basis Point (PVBP) of all outstanding OIS positions undertaken by all non-
residents shall not exceed the amount of INR 3.50 billion (PVBP cap).
2) The PVBP of all outstanding OIS positions for any non-resident (including related entities) shall not
exceed 10% of the PVBP cap.
3) Clearing Corporation of India Ltd. (CCIL) shall publish the methodology for calculation of the PVBP and
monitor as well as publish utilization of the PVBP limit on a daily basis.Foreign Portfolio Investors
(FPIs), collectively, may also transact in interest rate futures (IRF) up to a limit of net long position of
INR 50 billion.
Remittance/Payments : All payments of a non-resident may be routed through a Rupee account of the non-
resident or, where the non-resident doesn’t have a Rupee account in India, through a vostro account
maintained with an AD bank in India. The market-maker shall maintain complete details of such
transactions.
KYC for the non-resident: Market-maker shall ensure that non-resident clients are from an FATF
compliant country. Market-makers shall also ensure that non-resident clients comply with the KYC
requirements.
Investment by Foreign Portfolio Investors (FPI) in Debt -
In terms of AP (DIR Series) Circular No. 31 dated June 15, 2018, no FPI shall have an exposure of more
than 20% of its corporate bond portfolio to a single corporate (including exposure to entities related to
the corporate). As per circular dated 15.02.19, in order to encourage a wider spectrum of investors to
access the Indian corporate debt market, RBI decided to withdraw this provision with immediate effect.
ECB facility for Resolution Applicants under Corporate Insolvency Resolution Process As per ECB policy
dated 16.01.19, ECB proceeds cannot be utilised for repayment of domestic Rupee loans, except when the
ECB is availed from a Foreign Equity Holder as defined in the aforesaid framework.
On a review on 07.02.19, RBI, to relax the end-use restrictions for resolution applicants under the
Corporate Insolvency Resolution Process (CIRP) decided and allow them to raise ECBs from the recognised
lenders, except the branches/ overseas subsidiaries of Indian banks, for repayment of Rupee term loans of
the target company under the approval route. Accordingly the resolution applicants, who are otherwise
eligible borrowers, can forward such proposals to raise ECBs, through their AD bank, to RBI, for approval.
Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit
Government of India decided to include merchant exporters also, w.e.f. January 2, 2019, under the ongoing
Interest Equalisation Scheme for Pre and Post Shipment Rupee Export Credit and allow them interest
equalisation at the rate of 3% on credit for export of products covered under 416 tariff lines identified
under the Scheme.
Limit for the stock of External Commercial Borrowings -On 20.12.2018, RBI decided, in consultation
with the Government of India to have a rule-based dynamic limit for outstanding stock of External
Commercial Borrowings (ECB) at 6.5 per cent of GDP at current market prices. Based on the GDP figures
as on March 31, 2018, the stock limit works out to USD 160 billion for the current financial year. The
outstanding stock of ECB as on September 30, 2018 stood at USD 126.29 billion.
Licensing as Authorised Dealer- Category II : A large segment of population is increasingly getting
connected with forex transactions on individual accounts. In order to increase the accessibility and efficiency of
services extended to the members of the public for their day-to-day non-trade current account transactions, RBI
decided on 16.04.19, that Systemically Important Non-Deposit taking Investment and Credit Companies shall be
eligible for Authorized Dealer- Category II (AD-Cat II) licence, subject to meeting the following conditions: NBFCs
offering such services shall have a ‘minimum investment grade rating’. NBFCs offering such services shall
put in place a board approved policy on (a) managing the risks, including currency risk, if any, and (b) handling
customer grievances arising out of such activities. A monitoring mechanism, at least at monthly intervals, shall be
put in place for such services. The eligible NBFCs desirous of undertaking AD-Cat II activities shall approach
the Reserve Bank of India, Foreign Exchange Department, Central Office, Mumbai for the AD-Cat II licence.
Investment by Foreign Portfolio Investors (FPI) in Debt – Review -Further to RBI circulars dated
07.11.17 and 15.06.18, as a measure to broaden access of non-resident investors to debt instruments in
India, Foreign Portfolio Investors (FPI) have been permitted by RBI on 25.04.19, to invest in municipal
bonds. FPI investment in municipal bonds shall be reckoned within the limits set for FPI investment in State
Development Loans (SDLs).
Limit for the stock of External Commercial Borrowings -On 20.12.2018, RBI decided, in consultation
with the Government of India to have a rule-based dynamic limit for outstanding stock of External
Commercial Borrowings (ECB) at 6.5 per cent of GDP at current market prices. Based on the GDP figures
as on March 31, 2018, the stock limit works out to USD 160 billion for the current financial year. The
outstanding stock of ECB as on September 30, 2018 stood at USD 126.29 billion.
Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit (November 29, 2018): As
per extant guidelines, Govt of India provides interest equalisation at the rate of 3% per annum on Pm
Shipment Rupee Export Credit and Post Shipment Rupee Export Credit. The scheme is available to all
exports under 416 tariff lines [at ITC (HS) code of 4 digit] and exports made by Micro, Small & Medium
Enterprises (MSMEs) across all ITC(HS) codes. Scheme is not available to merchant exporters. Now,
Government of India has decided to increase w.e.f. November 02, 2018 Interest Equalisation rate from 3%
to 5%.
Maintenance of CRR/SLR on Foreign Currency Assets/Liabilities— Reference rate for INR/USD and
exchange rate of other major currencies (August 02, 2018): For maintenance of CRR on FCNR(B)
Scheme, RBI had advised banks to be guided by the reference rate announced on the RBI's website
for converting foreign assets/deposits into INR for reporting in Form 'A' Return. Now, Financial
Benchmarks India Private Limited (FBIL) has taken over the process of computing and disseminating
reference rate for INR/USD and exchange rate for the other major currencies with effect • from July
10, 2018. RBI has therefore advised banks to use the conversion rate announced by FBIL for the
purpose of converting foreign assets/liabilities for reporting in Form 'A' return and Form VIII return.
The change is to brought into effect from the reporting fortnight ending July 20, 2018. .As regards
conversion of assets/liabilities in other currencies, for which reference rate is not available from
FBIL, banks may continue to use New York closing rate pertaining to the day end of the Reporting
Friday, for converting such currencies into USD. Banks may use the reference rate of FBIL for
USD/INR of the same day for conversion into INR.
Maintenance of CRR/SLR on Foreign Currency Assets/Liabilities— Reference rate for INR/USD and
exchange rate of other major currencies (August 02, 2018): For maintenance of CRR on FCNR(B)
Scheme, RBI had advised banks to be guided by the reference rate announced on the RBI's website
for converting foreign assets/deposits into 1NR for reporting in Form 'A' Return. Now, Financial
Benchmarks India Private Limited (FBIL) has taken over the process of computing and disseminating
reference rate for INR/USD and exchange rate for the other major currencies with effect from July
10, 2018. RBI has therefore advised banks to use the conversion rate announced by FBIL for the
purpose of converting foreign assets/liabilities for reporting in Form 'A' return and Form VIII return.
The change is to brought into effect from the reporting fortnight ending July 20, 2018. As regards
conversion of assets/liabilities in other currencies, for which reference rate is not available from
FBIL, banks may continue to use New York closing rate pertaining to the day end of the Reporting
Friday, for converting such currencies into USD. Banks may use the reference rate of FBIL for
USD/INR of the same day for conversion into MR.
Liberalised Remittance Scheme — Harmonisation of Data and Definitions (June 19, 2018): RBI has
decided that furnishing of Permanent Account Number (PAN), which hitherto was not to be insisted upon
while putting through permissible current account transactions of up to USD 25,000, shall now be
mandatory for making all remittances under Liberalised Remittance Scheme (IRS). Further, in the
context of remittances allowed under LRS for maintenance of cloSe. relatives, It has been decided, In
consultation with Government, to align the definition of 'relative' with the definition given. in Companies
Act, 2013 instead of...Companies Act, 1956.
Liberalised Remittance Scheme (IRS) for Resident Individuals - daily reporting of transactions
(April 12, 2018): Currently, transactions under Liberalised Remittance Scheme (LRS) are being
permitted by AD banks based on the declaration made by the remitter. In order to improve
monitoring and also to ensure compliance with the LRS limits, RBI has decided to put in place a daily
reporting system by AD banks of transactions undertaken by individuals under LRS, which will be
accessible to all the other ADs. Accordingly, all AD Category-I banks are required to upload daily
transaction-wise information undertaken by them under LRS at the close of business of the next
working day. In case no data is to be furnished, AD banks shall upload a 'Nil' report.
Comprehensive Guidelines on Derivatives: (April 6, 2018): As per existing guidelines, 'user suitability
and appropriateness' are applicable to all generic and structured derivative products except forex
forward contracts. Now, RBI has decided that stand-alone plain vanilla forex options (without attached
structures) purchased by clients will be exempt from the 'user suitability and appropriateness' norms,
and the regulatory requirements will be at par with forex forward contracts.
Discontinuance of Letters of Undertaking (LoUs) and Letters of Comfort (LoCs) for Trade Credits
(March 13, 2018): RBI has decided to discontinue the practice of issuance of Lelis/ LoCs for Trade
Credits for imports into India by AD Category -I banks with immediate effect (from March 13, 2018).
Letters of Credit and Bank Guarantees for Trade Credits for imports into India may continue to be
issued.
Government Banking - Issue of Letters of Credit and Bank Guarantee (August 3, 2017): RBI has decided
that RBI will not issue Letter of Credits on behalf of government and will not act as an issuing or advising
bank for government as far as transactions related to Bank Guarantees are concerned. The government
department concerned would be directly taking up the matter with any commercial bank identified by them
and all matters concerned with the issuances of LC should be dealt with by the government and the
commercial banks, without involving RBI. As LC/BG business is not part of agency banking, government can
choose any commercial bank for this purpose. The role of RBI is strictly limited to reimbursement of
payments made by the banks for such LCs/BGs on behalf of the government, after satisfying itself with the
debit mandate given by the government. Further, RBI may not issue any letter advising / recommending
opening of LC/BG to the commercial banks on behalf of government department.
Purchase of foreign exchange from foreign citizens and others (March 30, 2017): As per extant RBI
guidelines, foreign citizens (i.e. foreign passport holders) were permitted to exchange foreign exchange for
Indian currency notes up to a limit of Rs. 5000/- per week till January 31, 2017. Now, RBI has decided to
restore status quo ante regarding purchase of foreign exchange from customers by authorised persons as
mentioned in Circular dated November 27, 2009, details of which are given below: (a) Requests for payment
in cash by foreign visitors / Non-Resident Indians may be acceded to the extent of only US $ 3000 or its
equivalent. All purchases within one month may be treated as single transaction for the above purpose and
also for reporting purposes. In all other cases, APs should make payment by way of 'Account Payee' cheque /
demand draft only.
Import Data Processing and Monitoring System (IDPMS) (October 06, 2016): In order to enhance ease of
doing business and facilitate efficient data processing for payment of import transactions and effective
monitoring thereof,Import Data Processing and Monitoring System (IDPMS) has been developed in
consultation with the Customs authorities and other stakeholders. IDPMS will go live with effect from
October 10, 2016 and banks are directed to use IDPMS for reporting and monitoring of the import
transactions. Customs department has modified the Bill of Entry (BoE) format to display the AD Code of
bank -with effect from April 1, 2016 and SEZ from June 1, 2016 respectively. Primary import transaction
data (from Customs/SEZ) with effect from the above mentioned dates will be made available to
respective AD banks in the IDPMS database for further processing. Starting October 10, 2016 all
transactions will flow to IDPMS on daily basis for AD banks, to log all subsequent activities and monitor
the import transactions.
Foreign Currency Accounts by a person resident in India (June 23, 2016): Indian startup, having an
overseas subsidiary, may open a foreign currency account with a bank outside India for the purpose of
crediting to the account the foreign exchange earnings out of exports/sales made by the said startup or
its overseas subsidiary. The balances held in such accounts, to the extent they represent exports from
India, shall be repatriated to India within the period prescribed for realization of exports. In addition,
payments received in foreign exchange by an Indian startup arising out of sales/ export made by the
startup or its overseas subsidiaries will be a permissible credit to the Exchange Earners Foreign Currency
(EEFC) account maintained in India by the startup. Further, any insurance/ reinsurance company
registered with the Insurance Regulatory and Development Authority of India (IRDA) may open a foreign
currency account with a bank outside India to carry out insurance/ reinsurance business.
Export Data Processing and Monitoring System (EDPMS) (May 26, 2016): To simplify the procedure
for filing returns on a single platform and for better monitoring, RBI has decided to integrate the
returns related to (a) handling of shipping bills for caution listed exporters; (b) delayed utilisation of
advall. ICLCIVCdIilr eAport3, aild (u) expo eApuutSicit idiu ly vvith Export Data Processing and
Monitoring System (EDPMS) which has been in operation since March 1, 2014. Criteria laid down for
cautioning / de-cautioning of exporters in EDPMS are as under: The exporters would be caution listed
if any shipping bill against them remains open for more than two years in EDPMS provided no
extension is granted by bank / RBI. Date of shipment will be considered for reckoning the realisation
period. Once related bills are realised and closed or extension for realisation is granted, the exporter
will automatically be de-caution listed. The exporters can also be caution listed even before the
expiry of two years period based on the recommendation of AD banks. Banks will intimate the
exporters about their caution listing, giving the details of outstanding shipping bills. The bills from
caution listed exporters can be accepted for negotiation / purchase / discount / collection if the
exporter produces evidence of having received advance payment or an irrevocable letter of credit in
his favour covering the full value of the proposed exports. Reporting of Advance Remittance for
Exports: Presently the export data in EDPMS is being captured only from the shipping bills generated.
Now, banks will have to report all the inward remittances including advance as well as old
outstanding inward remittances received for export of goods / software to EDPMS. Outstanding
Statement (X05): RBI has decided to migrate the XOS data reported by the AD banks for half year
ended December 2015 onwards to EDPMS and discontinue separate reporting of XOS for the
subsequent periods.
Import of Rough, Cut and Polished Diamonds (March 31, 2016): Banks are permitted to approve Clean
Credit i.e. credit given by a foreign supplier to its Indian customer / buyer, without any Letter of Credit
(Suppliers' Credit) / Letter of Undertaking (Buyers' Credit) / Fixed Deposits from any Indian financial
institution for import of Rough, Cut and Polished Diamonds, for a period not exceeding 180 days from the
date of shipment. Now, RBI has delegated this power for a period exceeding 180 days from the date of
shipment to the AD banks. AD banks may allow such extension of time up to a maximum period of 180
days beyond the prescribed period/due date.
Grant of EDF Waiver for Export of Goods Free of Cost (March 03, 2016): GR waiver to exporters for
export of goods free of cost is available. The facility had been extended to the Status Holders as per
Foreign Trade Policy 2004-2009, in terms of which Status Holders shall be entitled to export freely
exportable items on free of cost basis for export promotion subject to an annual limit of Rs 10 lakh
or 2% of average annual export realization during preceding three licensing years, whichever is
higher. Later on, Government notified vide notification dated June 4, 2015 that the Status Holders
shall be entitled to export freely exportable items on free of cost basis for export promotion subject
to an annual limit of Rs 10 lakh or 2% of average annual export realization during preceding three
licensing years whichever is lower.
Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations (February
04, 2016): Following are the limits for possession or retention of foreign currency or foreign coins,
namely:- possession without limit of foreign currency and coins by an authorised. person within_ the
scope of his authority; possession without limit of foreign coins by any person; retention by a -person
resident in India of foreign currency notes, bank notes and foreign currency travellers' cheques not
exceeding US$ 2000 or its equivalent in aggregate.
Settlement of Export/ Import transactions in currencies not having a direct exchange rate (February
4, 2016): Settlement of export and import transactions where the invoicing is in a freely convertible
currency and the settlement takes place in the currency of the beneficiary, which though convertible,
does not have a direct exchange rate, can be done.
Non-Fund Based Facility' to Non-constituent Borrowers of Bank (January 07, 2016): Scheduled
Commercial Banks can grant non-fund based facilities including Partial Credit Enhancement (PCE) to
those customers, who do not avail any fund based facility from any bank in India, subject to the
following conditions: Verification of Customer credentials: The banks shall ensure that the borrower
has not availed any fund based facility from any bank operating in India. However, at the time of
granting non-fund based facilities, banks shall obtain declaration from the customer about the non-
fund based credit facilities already enjoyed by them from other banks. Submission of Credit
Information to CICs: Credit information relating to grant of such facility shall mandatorily be
furnished to the Credit Information Companies (specifically authorized by RBI). However, banks are
prohibited from negotiating unrestricted LCs of non-constituents. In cases where negotiation of bills
drawn under LC is restricted to a particular bank and the beneficiary of the LC is not a constituent of
that bank, the bank shall have the option to negotiate such LCs, subject to the condition that the
proceeds are remitted to the regular banker of the beneficiary.
Imports of Goods into India — Evidence of Import (November 26, 2015): An importer has to
submit as evidence of import, (a) the exchange control copy of the Bill of Entry for home consumption;
(b) the exchange control copy of the Bill of Entry for warehousing, in the case of 100% Export Oriented
Units (EOUs); or (c) Customs Assessment Certificate or Postal Appraisal .Form as declared by the
importer to the Customs Authorities. With the establishment of Free Trade Warehousing Zones /
SEZ Unit warehouses, imported goods can be stored therein, for re-export / re-selling purposes for which
Customs Authorities issue Ex-Bond Bill of Entry. Therefore, RBI has advised banks to consider the Bill of
Entry issued by Customs Authorities named as Ex-Bond Bill of Entry or by any other similar nomenclature,
as evidence for physical import of goods. Further, in cases where goods have been imported through
couriers, the Courier Bill of Entry, as declared by the courier companies to the Customs Authorities, may
also be considered as evidence of import of goods.
Software Export — Filing of bulk SOFTEX (November 05, 2015): As per extant guidelines, a software
exporter, whose annual turnover is at least Rs.1000 crore or who files at least 600 SOFTEX forms annually
on an alt India basis, is eligible to declare all the off-site software exports in bulk in the form of a
statement in excel format, to the competent authority for certification on monthly basis. Now, RBI
has decided to extend this facility to all software exporters. Accordingly, all software exporters can
now file single as well as bulk SOFTEX form in excel format to the competent authority for.
certification. Since the SOFTEX data from STPI/SEZ is being transmitted in electronic format to RBI,
the exporters are required to submit the SOFTEX form in duplicate as per the revised procedure.
STPI/SEZ will retain one copy and handover the duplicate copy to the exporters after due
certification.
Investment by Foreign Portfolio Investors (FPI) in Debt
In terms of AP (DIR Series) Circular No. 31 dated June 15, 2018, no FPI shall have an exposure of more
than 20% of its corporate bond portfolio to a single corporate (including exposure to entities related to
the corporate). As per circular dated 15.02.19, in order to encourage a wider spectrum of investors to
access the Indian corporate debt market, RBI decided to withdraw this provision with immediate effect.
ECB facility for Resolution Applicants under Corporate Insolvency Resolution Process As per ECB policy
dated 16.01.19, ECB proceeds cannot be utilised for repayment of domestic Rupee loans, except when the
ECB is availed from a Foreign Equity Holder as defined in the aforesaid framework. On a review on
07.02.19, RBI, to relax the end-use restrictions for resolution applicants under the Corporate Insolvency
Resolution Process (CIRP) decided and allow them to raise ECBs from the recognised lenders, except the
branches/ overseas subsidiaries of Indian banks, for repayment of Rupee term loans of the target company
under the approval route.
Accordingly the resolution applicants, who are otherwise eligible borrowers, can forward such proposals
to raise ECBs, through their AD bank, to RBI, for approval.
RBI allows importers to raise $150 million trade credit - The RBI has amended Trade Credit Policy to
allow oil/gas refining and marketing, airline and shipping companies to raise Trade Credit (TC) of up to
$150 million or equivalent per import transaction under the automatic route. Others can raise TCs up to
$50 million or equivalent per import transaction. The amended policy has been issued to banks authorized
to deal in foreign exchange (Category-I Authorized Dealer Banks or ADs). The all-in-cost (including rate of
interest, other fees, expenses, charges, guarantee fees in foreign currency or rupee) ceiling p.a. has been
pegged at the benchmark rate plus 250 bps spread. The period of TC, reckoned from the date of shipment,
will be up to three years for import of capital goods; and, up to one year or the operating cycle, whichever
is less, for non-capital goods. However, for shipyards/shipbuilders, the period for non-capital goods can go
up to three years. TCs may be secured with bank guarantees given by ADs on behalf of the importer, in
favor of the overseas lender of TC, not exceeding the amount of TC. The period of
such guarantee cannot be beyond the maximum permissible period for TC.
RBI raises FPI investment limit in G-Secs for FY20 : RBI has upped the investment limit for FY2019-20
for FPIs in Central Government securities (G-Secs) to 6% of outstanding stock of securities from 5.5% in
FY2018-19. The allocation of increase in G-Sec limit over the two sub-categories – general and long-term
- has been set at 50:50 for the year 2019-20. The entire increase in limits for SDLs (State Development
Loans) has been added to the general sub-category of SDLs. The coupon reinvestment arrangement for G-
Secs will be extended to SDLs too.
RBI eases ECB norms : To further improve the ease of doing business in India, RBI has drawn up a new
external commercial borrowing (ECB) framework allowing all eligible borrowers to raise up to $750
million per financial year under the automatic route, replacing the existing sector-wise limits. To curb
volatility in the forex market arising out of dollar demand for crude oil purchases, the framework
provides special dispensation to public sector oil marketing companies. They can raise ECB, with an
overall ceiling of $10 billion, for working capital purposes with a minimum average maturity period
(MAMP) of three years under the automatic route without mandatory hedging and individual limit
requirements. Additionally, port trusts, units in SEZs, SIDBI, Exim Bank and registered MicroFin entities
can also borrow under this framework.
Manufacturing companies can raise up to $50 million per financial year with a maturity period of one
year. Further, if the ECB is raised from a foreign equity holder and utilized for working capital, general
corporate purposes or repayment of rupee loans, the maturity period will be five years.
7. DIGITAL BANKING
Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using
authorised Payment Systems - RBI observed that a large number of customer complaints
emanate on account of unsuccessful or ‘failed’ transactions’.A ‘failed transaction’ is a transaction
not fully completed due to any reason not attributable to the customer. It could be failure in
communication links, non-availability of cash in an ATM, time-out of sessions, credits could not be
effected to the beneficiary account due to lack of full information or lack of proper information and
delay in initiating a reversal transaction. On 20.09.19, framework for TAT for failed transactions and
compensation therefor was circulated by RBI. The principle behind the TAT is based on the following :
1. If the transaction is a ‘credit-push’ funds transfer and the beneficiary account is not credited
while the debit to originator has been effected, then credit is to be effected within the prescribed
time period failing which the penalty has to be paid to the beneficiary; 2. If there is delay in
initiation of a transaction at the originator bank’s end beyond the TAT, then penalty has to be paid to
the originator.
General Instructions covering the TAT : 1. The prescribed TAT is the outer limit for resolution of failed
transactions. 2. Wherever financial compensation is involved, the same shall be effected to the
customer’s account suo moto, without waiting for a complaint or claim from customer. 3. Customers
who do not get the benefit of redress of the failure as defined in the TAT, can register a complaint to the
Banking Ombudsman of Reserve Bank of India. 4. This directive comes into effect from Oct 15, 2019. 5.
‘T’ is the day of transaction and refers to the calendar date. ‘R’ is the day on which the reversal is
concluded and funds are received by issuer / originator. Reversal should be effected at issuer /
originator end on same day when the funds are received from the beneficiary end. 6. Domestic
transactions (i.e.originator and beneficiary are in India) are covered under the framework.
Turn Around Time (TAT) and customer compensation for failed transactions using authorised
Payment Systems- 1. ATM/Micro ATM: Customer’s account debited but cash not dispensed. Pro-
active reversal (R) of failed transaction within T + 5 days.
2.a : Card to card transfer- Card a/c debited but the beneficiary card account not credited.
Transaction to be reversed (R) latest within T + 1 day 2.b : Point of Sale (PoS) (Card Present)-
including Cash at PoS A/c debited but confirmation not received at merchant location i.e., charge-
slip not generated. Auto-reversal within T + 5 days.
2.c : Card Not Present (CNP) (e-commerce)Account debited but confirmation not received at
merchant’s system. Auto-reversal within T + 5 days.
3: IMPS : Account debited but the beneficiary account is not credited.
If unable to credit to beneficiary account, auto reversal (R) by Beneficiary bank on T + 1 day.
4.a : UPI : Account debited but the beneficiary account is not credited (transfer of funds).
If unable to credit the beneficiary account, auto reversal (R) by Beneficiary bank on T + 1 day.
4.b: UPI : Account debited but transaction confirmation not received at merchant location (payment to
merchant). Auto-reversal within T + 5 days.
5.a : AEPS : A/c debited but transaction confirmation not received at merchant location. Acquirer to
initiate “Credit Adjustment” within T + 5 days.
5.b : AEPS : A/c debited. Beneficiary a/c not credited. Acquirer to initiate Credit Adjustment within T
+ 5 days. 6: APBS : Delay in crediting beneficiary’s account. Beneficiary bank to reverse within T + 1
day.
7.A : NACH : Delay in crediting beneficiary’s account or reversal of amount.
Beneficiary bank to reverse within T + 1 day.
7.B: NACH : Account debited despite revocation of debit mandate with the bank by the customer.
Customer’s bank responsible for debit. Resolution within T + 1 day.
8.a : PPIs- Cards / wallets : Off-Us transaction: The transaction will ride on UPI, card network, IMPS,
etc., as the case may be. The TAT and compensation rule of respective system shall apply.
8.B: PPIs- Cards / wallets : On-Us transaction: Beneficiary’s PPI not credited. PPI debited.
Transaction confirmation not received by merchant. R e v e r s a l effected in Remitter’s account
within T + 1 day. Compensation : Rs.100 per day in all cases, beyond the period of time limit.
IMPS = Immediate Payment System, UPI = Unified Payments Interface, AEPS = Aadhaar Enabled
Payment System (including Aadhaar Pay), APBS = Aadhaar Payment Bridge System, NACH = National
Automated Clearing House, PPI = Prepaid Payment Instruments– Cards / Wallets
Ombudsman for Digital Transactions RBI introduced the Ombudsman Scheme for Digital Transactions, 2019 u/s 18
Payment and Settlement Systems Act, 2007, w.e.f. January 31, 2019. Objective : To provide an expeditious and
cost-free apex level mechanism for resolution of complaints regarding digital transactions undertaken by
customers of the System Participants. Appointment of Ombudsman: He/she is a senior official,
appointed (max for 3 years) by RBI. 21 Ombudsman have been appointed by RBI located mostly in State
Capitals. (Sacretariat cost borne by RBI). Ombudsman is to send report to Governor RBI as on 30 th Jun
every year on general review of activities. Entities covered : System Participants (SP) are the entities
(other than a bank) participating in the payment system excluding system provider. Grounds of
complaints: Deficiency in services and nonadherence of RBI instructions by System Participants such as
Prepaid Payment Instruments; Mobile / Electronic Fund Transfers; 3) Payment through Unified
Payments Interface (UPI) / Bharat Bill Payment System (BBPS) / Bharat QR Code / UPI QR Code: Grounds
of complaint generally include: Failure in crediting merchant’s account within reasonable time;Failure to
load funds within reasonable time in wallets / cards; Unauthorized electronic fund transfer;
a) Non-Transfer / Refusal to transfer/ failure to transfer within reasonable time, balance in PPI to the
holder’s ‘own’ bank account or back to source, expiry of validity period etc., of PPI;
b) Failure or refusal to refund within reasonable time in case of unsuccessful / returned / rejected /
cancelled / transactions;
c) Non-credit / delay in crediting the account of PPI holder as per the terms and conditions;
d) Failure to effect online payment / fund transfer within reasonable time;
e) Unauthorized electronic fund transfer;
f) Failure to act upon stop-payment instructions;
g) Failure to reverse the amount debited from customer account in cases of failed payment transactions
within prescribed timeline;
h) Failure in crediting funds to the beneficiaries’ account; NOTE: For digital transactions done on third
party platforms, it will be the responsibility of the Payment Service Provider to resolve customer disputes
arising out of such transactions.
Time to file a complaint: For redressal, the complainant must first approach the System Participant
concerned. If the System Participant does not reply within a period of one month, or rejects the
complaint, or if the complainant is not satisfied with the reply given, the complainant can file the
complaint with the Ombudsman within whose jurisdiction the branch or office of the System Participant
complained against, is located. For complaints arising out of services with centralized operations, it shall
be filed before the Ombudsman within whose territorial jurisdiction the billing / declared address of the
customer is located.
Grounds of rejection by the Ombudsman: If SP is not covered under the Scheme. If one has not
approached SP concerned in the first instance for redressal.If the subject matter is not pertaining to the
grounds of complaint. Complaint not made within prescribed period. (Ombudsman may accept a complaint
made after such period, before the expiry of limitation period under Limitation Act, 1963). Complaint is
pending for disposal / dealt with at any other forum (court, consumer court etc.) Complaint settled through
Ombudsman in any previous proceedings.Complaint is frivolous or vexatious.Complaint falls under the
disputes covered under Section 24 of the Payment and Settlement Systems Act, 2007.The complaint
pertains to dispute arising from a transaction between customers.
Procedure for filing the complaint : A complaint can be filed by complainant or authorized
representative (other than Advocate), written on a plain paper and sending it by post/ fax/hand delivery or
by email. A complaint form is available on RBI’s website, though, it is not mandatory to use this format.
There are no charges or any fee for filing / resolving customers’ complaints.Types of settlement of
complaint : It can be settlement by agreement or conciliation and mediation or by way of passing of
award. Action by Ombudsman on a complaint:
The proceedings will be summary in nature.
1) Effort shall be made by Ombudsman to promote settlement through conciliation/ mediation by
agreement between parties. Based on such agreement, Ombudsman will pass an order as per terms of
settlement which becomes binding on both parties.
2) If the system Participant is found to have adhered to the norms and the complainant is informed
about this and complainant does not raise objections, within the time frame provided, the Ombudsman
may pass an order to close the complaint.
2) Ombudsman can pass an Award after providing reasonable opportunity. It is upto the complainant to
accept the Award as full and final settlement or reject it.
Award and compensation: Ombudsman can award compensation limited to loss arising directly out of
omission or commission of SP, or Rs.20 lac
(two million) whichever is lower. The compensation shall be over and above the disputed amount.
Additional compensation up to Rs.1 lac (0.1 million) can be awarded for effort, time, mental agony and
harassment. The award shall lapse, if complainant does not send acceptance for full and final
settlement, to System Participant, within 30 days of receipt of copy of award.
The System Participant shall comply with the award, within 30 days of receipt of such acceptance and
send compliance report to Ombudsman. The System Participant shall send a report of compliance to RBI
within 15 of award becoming final.
If System Participant does not implement the award, the complaint can approach RBI.
Appeal : A person aggrieved by such Award can approach the Appellate Authority (Deputy Governor-in-
Charge of the department of the RBI implementing the Scheme) within 30 days of the date of receipt of
communication of Award or rejection.
System Participant can appeal (with permission of CMD/CEO/ED) within 30 days from the date, when
acceptance was received from complainant.
The Appellate Authority may allow a further period not exceeding 30 days. Nodal officer : SP shall appoint
nodal officer at their Regional/Zonal Office who shall be responsible to provide information to Ombudsman
concerned.
OPENING OF FIRST COHORT UNDER THE REGULATORY SANDBOX (RS) The Reserve Bank announces the
opening of first cohort under the Regulatory Sandbox (RS) with ‘Retail Payments’, as its theme. The
adoption of ‘Retail Payments’ as the theme is expected to spur innovation in digital payments space and
help in offering payment services to the unserved and underserved segment of the population. Migration
to digital modes of making a payment can obviate some of the costs associated with a cash economy and
can give customers a friction-free experience. The innovative products/services which, among others,
shall be considered for inclusion under RS are as follows: • Mobile Payments including feature phone
based Payment Services: General innovation in mobile payment services has focussed on or supported
appbased access, limited to smartphones and such devices. • Offline Payment Solutions: Providing an
option of off-line payments through mobile devices for furthering the adoption of digital payments is
required. • Contactless Payments: Contactless payments, while decreasing the time taken for payment
checkout, also ease payments for small ticket payment transactions. Tokenisation technologies often
form the basis of facilitating seamless e-commerce experiences fuelled by mobile and other connected
devices. The rapid growth in devices provides a significant opportunity for payments through any form
factor and anywhere.
FURTHERING DIGITAL PAYMENTS RBI has stated that efforts have resulted in a rapid growth in the retail
digital payment systems. To further empower every citizen with an Exceptional (e) Payment Experience,
and provide her access to a bouquet of options, the RBI proposes to take the following steps: • Mandate
banks not to charge savings bank account customers for online transactions in the NEFT system with
effect from January 2020. • Operationalise the Acceptance Development Fund to increase acceptance
infrastructure w.e.f. January 1, 2020. • Constitute a Committee to assess the need for plurality of QR
codes and merits of their co-existence or convergence from both systemic and consumer viewpoints. •
Permit all authorised payment systems and instruments (non-bank PPIs, cards and UPI) for linking with
National Electronic Toll Collection (NETC) FASTags. Going forward, this will facilitate the use of FASTags
for parking, fuel, etc.
Expanding and Deepening of Digital Payments Ecosystem With a view to expanding and deepening the
digital payments ecosystem, RBI decided (07.10.19) that all State/ UT Level Bankers Committees (SLBCs/
UTLBCs) shall identify one district in their respective States/ UTs on a pilot basis in consultation with
banks and stakeholders. The identified district shall be allotted to a bank having significant footprint
which will endeavour to make the district 100% digitally enabled within one year, in order to enable
every individual in the district to make/ receive payments digitally in a safe, secure, quick, affordable
and convenient manner. This would, inter alia, include providing the necessary infrastructure and
literacy to handle such transactions. SLBCs/ UTLBCs shall endeavour to ensure that to the extent
possible, districts identified are converged with the ‘Transformation of Aspirational Districts’ programme
of the Government of India. The allotment of the identified district to a bank should be done, as far as
possible, through mutual consultation and voluntary acceptance by the bank. Further, SLBC/ UTLBC
Convenor Banks are to monitor the progress made in this regard on a quarterly basis and report the same
to concerned Regional Offices/ SubOffices of the Reserve Bank of India.
Bank / Branch details under the Central Information System for Banking Infrastructure (CISBI) RBI
maintains the directory of all bank branches / offices / Non-Administratively Independent Offices (NAIOs)
/ Customer Service Points (CSPs) in India, [known as the “Master Office File” (MOF) system], which is
updated based on Proforma-I and ProformaII, submitted by banks through e-mail. The system allots Basic
Statistical Return (BSR) code / Authorised Dealer (AD) code to bank branches / offices / NAIOs / CSPs.
Consistent with the needs of branch licencing and financial inclusion policies as well as the need for
requisite coverage of additional dimensions / features, a new reporting system, viz., Central Information
System for Banking Infrastructure (CISBI) (https:// cisbi.rbi.org.in), has been web-deployed by RBI
(11.10.19) to replace the legacy MOF system. Under the new system, all co-operative banks are required
to submit their information in a single Proforma online on CISBI portal, as compared with the earlier
system of submitting Proforma-I & Proforma-II separately through e-mail. All the past information
reported by banks has been migrated to CISBI and additional information should be reported in CISBI
henceforth. The CISBI portal contains the relevant circulars, user manuals and other relevant documents
to facilitate reporting. RBI has provided login credentials to Nodal Officers of banks for submitting their
information in CISBI. Banks should submit information on CISBI portal as per guidelines and thereafter
bank branch / office / NAIO / CSP codes would be allotted by CISBI after due validations. In case of
status change, banks need to edit only the relevant part. All cooperative banks should submit
immediately and in any case not later than one week, the information relating to opening, closure,
merger, shifting and conversion of bank branches / offices / NAIOs / CSPs online through CISBI portal. To
ensure correctness of data on CISBI, in the last week of every month, banks shall generate a ‘NIL Report’
in CISBI for position as on last day of the previous month, indicating the total number of functioning
branches, offices, NAIOs, CSPs; and submit it through CISBI after authenticating its correctness. Banks
can also use the facility to access / download the data related to them. RBI further advised that CISBI
also has provision to maintain complete bank level details (e.g. bank category, bank-group, bank code,
type of license issued, registration details, area of operation, addresses of offices, contact details of
senior officials, etc.) and history of all the changes with time stamp. After gaining first time access of
the system, banks shall ensure to submit correct and updated Bank Level information in all the fields
where submission / updation rights are available with the bank. After initial submission of information on
CISBI portal, a one-time confirmation stating that “Correct and updated Bank level information has been
submitted on CISBI” shall be sent by banks to the concerned Regional Office of Department of Co-
operative Bank Supervision within one month of issuance of this circular. Any subsequent changes in the
bank level information shall be submitted for updation on the CISBI portal on immediate basis by the
banks.
ON-TAP AUTHORISATION OF PAYMENT SYSTEMS- With intention of encouraging competition and
encourage innovation, RBI has been decided to offer ontap authorisation for the following entities: •
Bharat Bill Payment Operating Unit (BBPOU). • Trade Receivables Discounting System (TReDS). • White
Label ATMs (WLAs). The KYC requirements for retail payment systems shall be as per the Master
Directions on Know Your Customer (KYC). The payment system operators should ensure interoperability
among different retail payment systems. The authorisation would be given based on (a) merits of the
proposal, and (b) Reserve Bank’s assessment of potential for additional entities in that segment. The
RBI, after reviewing the bank’s liquidity position and its ability to pay its depositors has decided to
further enhance the limit for withdrawal to Rs. 40,000/- (Rupees Forty Thousand only), inclusive of Rs.
25,000 allowed earlier. The name of "The Catholic Syrian Bank Limited" has been changed to "CSB Bank
Limited" in the Second Schedule to RBI Act, 1934 w.e.f. June 10, 2019.
Bharat Bill Payment System - Expansion of biller categories As per RBI guidelines dated 28.11.14, BBPS,
is an interoperable platform for repetitive bill payments, which currently covers bills of five segments
viz. Direct to Home (DTH), Electricity, Gas, Telecom and Water. RBI decided (on 16.09.19) to expand the
scope and coverage of BBPS to include all categories of billers who raise recurring bills (except prepaid
recharges) as eligible participants, on a voluntary basis.
Usage of ATMs – Free ATM transactions – Clarifications It came to notice of RBI that transactions that
have failed due to technical reasons, nonavailability of currency in ATMs, etc., are also included in
number of free ATM transactions. On 14.08.19, RBI clarified that transactions which fail on account of
technical reasons like hardware, software, communication issues; non-availability of currency notes in
the ATM; and other declines ascribable directly / wholly to the bank / service provider; invalid PIN /
validations; etc., shall not be counted as valid ATM transactions for the customer. Consequently, no
charges therefor shall be levied. Further, the non-cash withdrawal transactions (such as balance enquiry,
cheque book request, payment of taxes, funds transfer, etc.), which constitute ‘on-us’ transactions (i.e.,
when a card is used at an ATM of the bank which has issued the card) shall also not be part of the
number of free ATM transactions.
CASH WITHDRAWAL AT PoS DEVICES -The Reserve Bank of India has issued a circular wherein they have
said that it has come to their notice that the instructions pertaining to Cash withdrawal at Point of Sale
(PoS) have not been implemented in letter and spirit. The central bank has reiterated the instructions
with a view to provide for cash withdrawals at PoS devices enabled for all debit cards / open loop
prepaid cards issued by banks. The instructions outlined therein, limit:  Cash withdrawal to Rs. 1000/-
per day in Tier I and II centres and Rs. 2,000/- per day in Tier III to VI centres;  Customer charges, if
any, on such cash withdrawals to not be more than 1% of the transaction amount.  The facility is made
available at merchant establishments designated by the bank after a process of due diligence. Such
merchant establishments may be advised to clearly indicate / display the availability of this facility along
with the charges, if any, payable by the customer.  The facility is available irrespective of whether the
card holder makes a purchase or not. In case the facility is availed along with the purchase of
merchandise, the receipt generated shall separately indicate the amount of cash withdrawn.  Banks
offering this facility shall have an effective customer redressal mechanism. Complaints in this regard will
fall within the ambit of the Banking Ombudsman Scheme.  Earlier this month, RBI said that banks also
can't include noncash withdrawal transactions like balance enquiry, cheque book request, payment of
taxes and funds transfer under free ATM transactions.  Banks are also advised to submit data on cash
withdrawals at PoS devices to the CGM, Deptt of Payment and Settlement Systems, Mumbai, on quarterly
basis within 15 days of the end of quarter as per the format enclosed.
PROCESSING OF E-MANDATE ON CARDS FOR RECURRING TRANSACTIONS  The Reserve Bank of India
has over the past decade, put in place various safety and security measures for card payments, including
the requirement of Additional Factor of Authentication (AFA), especially for ‘card-not-present’
transactions.  Recurring transactions based on standing instructions given to the merchants by the
cardholders were brought within the ambit of Additional Factor Authentication.  The RBI has been
receiving requests from industry stakeholders to allow processing of e-mandate on cards for recurring
transactions with AFA during e-mandate registration and first transaction, and simple / automatic
subsequent successive transactions.  Keeping in view the changing payment needs and the requirement
to balance the safety and security of card transactions with customer convenience, RBI has decided to
permit processing of e-mandate on cards for recurring transactions (merchant payments) with AFA during
e-mandate registration, modification and revocation, as also for the first transaction, and simple /
automatic subsequent successive transactions. Applicability: The e-mandate arrangement on cards shall
be only for recurring transactions and not for a ‘once-only’ payment. These guidelines is applicable for
transactions performed using all types of cards – debit, credit and Prepaid Payment Instruments (PPIs),
including wallets. Registration of card details for e-mandate based recurring transactions: A cardholder
desirous of opting for e-mandate facility on card shall undertake a one-time registration process, with
AFA validation by the issuer. An e-mandate on card for recurring transactions shall be registered only
after successful AFA validation, in addition to the normal process by the issuer.  Registration shall be
completed only after all requisite information is obtained by the issuer, including the validity period of
the e-mandate and other audit trail related requirements. The facility to modify the validity period of
the e-mandate at a later stage, if required, shall also has to be provided for.
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 fixed by the RBI (currently Rs. 2,000/- per transaction).  Any
modification in existing e-mandate shall entail AFA validation by the issuer. Processing of first
transaction and subsequent recurring transactions:  While processing the first transaction in e-mandate
based recurring transaction series, AFA validation shall be performed. If the first transaction is being
performed along with the registration of e-mandate, then AFA validation may be combined. All such AFA
validation shall be as per extant instructions of the RBI.  Subsequent recurring transactions shall be
performed only for those cards which have been successfully registered and for which the first
transaction was successfully authenticated and authorised. These subsequent transactions may be
performed without AFA. Pre-transaction notification:  As a risk mitigant and customer facilitation
measure, the issuer shall send a pre-transaction notification to the cardholder, at least 24 hours prior to
the actual charge / debit to the card. While registering e-mandate on the card, the cardholder shall be
given facility to choose a mode among available options (SMS, email, etc.) for receiving the pre-
transaction notification from the issuer in a clear, unambiguous manner and in an understandable
language.  The facility for changing this mode of receiving pretransaction notification, shall also be
provided to the cardholder. The pre-transaction notification shall, at the minimum, inform the
cardholder about the name of the merchant, transaction amount, date / time of debit, reference
number of transaction/ e-mandate, reason for debit, i.e., e-mandate registered by the cardholder.  On
receipt of the pre-transaction notification, the cardholder shall have the facility to opt-out of that
particular transaction or the e-mandate. Any such opt-out shall entail AFA validation by the issuer. On
receipt of intimation of such an opt-out, the issuer shall ensure that the particular transaction is not
effected / further recurring transactions are not effected. A confirmation intimation to this effect shall
be sent to the cardholder.  Post-transaction notification: In line with the extant instructions, the issuer
shall send post-transaction alert / notification to the cardholder. This notification shall, at the minimum,
inform the cardholder about the name of the merchant, transaction amount, date / time of debit,
reference number of transaction / e-mandate, reason for debit, i.e., e-mandate registered by the
cardholder.
Transaction limit and velocity check:  The cap / limit for e-mandate based recurring transactions
without AFA will be Rs. 2,000/- per transaction. Transactions above this cap shall be subject to AFA. 
The maximum permissible limit for a transaction under this arrangement shall be Rs. 2,000/-.  No
charges shall be levied or recovered from the cardholder for availing the e-mandate facility on cards for
recurring transactions.  The limit of Rs. 2,000/- per transaction is applicable for all categories of
merchants who accept repetitive payments based on such e-mandates. Suitable velocity checks and other
risk mitigation procedures shall be put in place by issuers.
Withdrawal of e-mandate:  The issuer shall provide the cardholder an online facility to withdraw any e-
mandate at any point of time following which no further recurring transactions shall be allowed for the
withdrawn e-mandate. (Note: The exception to this will be a pipeline transaction for which pre-
transaction notification has already been sent to the cardholder, but the debit has not been
communicated to or received by the cardholder, and the emandate withdrawal happens during the
interregnum.) Information about this facility to withdraw e-mandate at any point of time, shall be clearly
communicated to the cardholder at the time of registration and later on whenever felt necessary. The
withdrawal of any e-mandate by the cardholder shall entail AFA validation by the issuer. In respect of
withdrawn e-mandate/s, the acquirers shall ensure that the merchants on-boarded by them, delete all
details, including payment instrument information.
Dispute resolution and grievance redressal:  An appropriate redress system shall be put in place by
the issuer to facilitate the cardholder to lodge grievance/s. Card networks shall also put in place dispute
resolution mechanism for resolving these disputes with clear Turn Around Time (TAT). The card networks
shall make suitable arrangements to separately identify chargebacks / dispute requests in respect of e-
mandate based recurring transactions. RBI instructions on limiting liability of customers in unauthorised
transactions shall be applicable for such transactions as well.
USAGE OF ATMS – FREE ATM TRANSACTIONS -  RBI has informed that it has come to their notice that
transactions that have failed due to technical reasons, nonavailability of currency in ATMs, etc., are also
included in the number of free ATM transactions.  RBI has clarified that transactions which fail on
account of technical reasons like hardware, software, communication issues; non-availability of currency
notes in the ATM; and other declines ascribable directly / wholly to the bank / service provider; invalid
PIN / validations; etc., shall not be counted as valid ATM transactions for the customer. Consequently, no
charges therefor shall be levied.  Non-cash withdrawal transactions (such as balance enquiry, cheque
book request, payment of taxes, funds transfer, etc.), which constitute ‘on-us’ transactions (i.e., when a
card is used at an ATM of the bank which has issued the card) shall also not be part of the number of free
ATM transactions.
National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) systems – Waiver
of charges RBI reviewed the various charges levied by it on the member banks for transactions processed
in the RTGS and NEFT systems. To provide an impetus to digital funds movement, RBI on 11.06.19,
decided that with effect from July 1, 2019, processing charges and time varying charges levied on banks
by Reserve Bank of India (RBI) for outward transactions undertaken using the RTGS system, as also the
processing charges levied by RBI for transactions processed in NEFT system will be waived by RBI. The
banks are advised to pass on the benefits to their customers for undertaking transactions using the RTGS
and NEFT systems with effect from July 1, 2019.
Security Measures for ATMs RBI decided to implement following recommendations of Committee on
Currency Movement (CCM) [Chair: Shri D.K. Mohanty] as per circular dated RBI-14.06.2019:
a) All ATMs shall be operated for cash replenishment only with digital One Time Combination (OTC) locks.
b) All ATMs shall be grouted to a structure (wall, pillar, floor, etc.) by Sept 30, 2019, except ATMs
installed in highly secured premises such as airports, etc. which have adequate CCTV coverage and are
guarded by state / central security personnel. c) Banks may also consider rolling out a comprehensive
esurveillance mechanism at the ATMs for timely alerts and quick response.
Discontinuation of the requirement of Paper to Follow (P2F) for State Government Cheques With a
view to enhancing efficiency in cheque clearing, Reserve Bank has introduced Cheque Truncation System
(CTS) for clearance of cheques, facilitating the presentation and payment of cheques without their
physical movement. P2F was discontinued for Central Govt. cheques with effect from February 2016.
Taking this initiative forward, RBI decided (20.06.19) in consultation with the Office of the Comptroller &
Auditor General of India (C&AG), Government of India, to dispense with the current requirement of
forwarding the paid State Government cheques in physical form (commonly known as P2F) to the State
Government departments/treasuries
INCREASE IN RTGS OPERATING HOURS -Presently, for customer transactions, RTGS is available for from
8:00 am to 6:00 pm and for inter-bank transactions from 8:00 am to 7:45 pm. To increase the availability
of the RTGS system, RBI decided (21.08.19) extended operating hours of RTGS and commence operations
from 7:00 am. RTGS time window w.e.f Aug 26, 2019 will be as under: Sr. No. Event Time 1. Open for
Business 07:00 hours 2. Customer transactions (Initial Cut-off) 18:00 hours 3. Inter-bank transactions
(Final Cut-off) 19:45 hours 4. IDL Reversal 19:45 - 20:00 hours 5. End of Day 20:00 hours
The RTGS time window with effect from August 26, 2019 will, therefore, be as under :
Event Time
Open for Business 07.00 hours
Customer transactions (Initial Cut-off) 18.00 hours
Inter-bank transactions (Final Cut-off) 19.45 hours
IDL Reversal 19.45 hours – 20.00 hours
End of Day 20.00 hours
TECHNICAL SPECIFICATIONS : ACCOUNT AGGREGATOR (AA) ECOSYSTEM The NBFC-AA consolidates
financial information of a customer held with different financial entities, spread across financial sector
regulators adopting different IT systems and interfaces. In order to ensure that such movement of data is
secured, duly authorised, smooth and seamless, it has been decided to put in place a set of core
technical specifications for the participants of the AA ecosystem. Reserve Bank Information Technology
Private Limited (ReBIT), has framed specifications for all and published the same on its website. All
regulated entities of the Bank, acting either as NBFC-AA or Financial Information Providers (FIP) or
Financial Information Users (FIU) are expected to adopt the technical specifications published by ReBIT.
It shall be the responsibility of the NBFC-AA to ensure that its IT systems have all features necessary to
carry out its functions strictly in conformity with the NBFC. WITHDRAWAL OF EXEMPTIONS HOUSING
FINANCE INSTITUTIONS Housing Finance Institutions as defined under Clause (d) of Section 2 of the
National Housing Bank Act, 1987 are currently exempt from the provisions of Chapter IIIB of Reserve Bank
of India Act, 1934. RBI has withdrawn these exemptions and make the provisions of Chapter IIIB except
Section 45-IA of Reserve Bank of India Act, 1934, applicable to them.
RBI allows WLATM operators to source cash, generate income from ads: In a bid to enhance the viability
of white-label ATMs (WLATMs), the RBI has allowed them to buy wholesale cash from RBI and currency
chests, source cash from any scheduled bank, and display advertisements pertaining even to non-financial
products/services within the WLATM premises. Further, banks can issue co-branded ATM cards with the
authorized WLATMs, and, may extend the benefit of ‘on-us’ transactions where the customer/cardholder
and ATM are of the same bank to their WLATMs. The permission given to WLATM operators aka WLAOs in
December 2016 to source cash from retail outlets, has been withdrawn. WLAOs can buy wholesale cash,
above a threshold of one lakh pieces (and in multiples thereof) of any denomination, directly from its issue
offices and currency chests, against full payments. They can offer bill payment and interoperable cash
deposit services, subject to technical feasibility and certification by the National Payments Corporation of
India (NPCI). They can display advertisements pertaining to non-financial products/services anywhere within
the WLATM premises, including the WLATM screen, except the main signboard.
PAYMENT AND SETTLEMENT SYSTEM IN INDIA : VISION 2019-2021
The Reserve Bank of India has placed on its website the “Payment and Settlement Systems in India: Vision 2019 –
2021”. The Payment Systems Vision 2021 with its core theme of ‘Empowering Exceptional (E) payment
Experience’ aims at empowering every Indian with access to a bouquet of e-payment options that is safe, secure,
convenient, quick and affordable. It envisages to achieve a ‘highly digital’ and ‘cash-lite’ society through the
goal posts of Competition, Cost effectiveness, Convenience and Confidence (4Cs).
OBJECTIVES: Enhance Customer experience, including robust grievance redressal; Empower payment
System Operators and Service Providers; Enable the payments Eco-system & Infrastructure; Put in place
Forward-looking Regulations; and Undertake Risk-focused Supervision. The ‘no- compromise’ approach
towards safety and security of payment systems remains a hallmark of the Vision.
TARGETS UNDER VISION 2019-2021: Increase digital payment transaction of GDP by 15%. Increase payment
system operators fourfold increase in digital transactions.Increase debit card transactions by 35% & increase total
card acceptance infrastructure to six times. Reduce currency in circulation with no specific target. Reduce the
volume of cheque-based payments to less than 2%. Reduce pricing of electronic payment services by at
least 100 basis points. Improve the security of digital payment systems. Facilitate mobile-based payment
transactions.
Real Time Gross Settlement (RIGS) System - Implementation of Positive Confirmation (November
15, 2018): Presently, the National Electronic Funds Transfer (NEFT) system provides for sending a
positive confirmation to the remitter of the funds regarding completion .of the funds transfer, thus
giving an assurance to the remitter that the funds have been successfully credited to the beneficiary
account. Now, RBI has decided that banks will provide the same fadlity to the remitter of funds
under the RTGS system as well. Initially, the positive confirmation feature in RTGS would be
available for member banks wherein both remitter and beneficiary banks access RTGS through client
interface I SFMS member interface. Member banks are expected to communicate the same to their
customers. The positive confirmation feature would be subsequently enabled for member banks
accessing RTGS through other channels as well. A new message format (camt.059) is being introduced
to communicate an acknowledgement to the remitting bank containing the date and time of credit to
beneficiary account. This message would flow from the beneficiary bank to the remitter bank
through the SFMS. After receiving the positive confirmation from the beneficiary bank ; the remitter
bank shall initiate an SMS and / or generate an e-mail to the remitter. All banks should put in place
systems to ensure straight-through-processing (STP) based confirmation processing. The beneficiary
bank shall ensure that such confirmation message is sent as soon as the amount is credited to the
beneficiary account in CBS while the confirmation message from the remitting bank shall be
necessarily sent on a real time basis and in any case not beyond one hour after receipt of credit
message from the beneficiary bank. The system of sending positive confirmation to the customers
shall be operationalised by banks at the earliest but not later than two months from 15 November
2018.
Cassette - Swaps in ATMs (April 12, 2018): RBI had constituted a Committee on Currency Movement
(CCM) headed by Shri D.K. Mohanty, Executive Director to review the entire gamut of security of the
treasure in transit. In order to mitigate risks involved in open cash replenishment/ top-up, RBI has
advised that banks may consider using lockable cassettes in their ATMs which shall be swapped at the
time of cash replenishment. The above may be implemented in a phased manner covering at least
one third ATMs operated by the banks every year, such that all ATMs achieve cassette swap by March
31, 2021.
Storage of Payment System Data (6 April 2018): RBI has decided that all system providers shall
ensure that the entire data relating to payment systems operated by them are stored in a system
only in India. This data should include the full end-to-end transaction details / information collected
/ carried / processed as part of the message / payment instruction. For the foreign leg of the
transaction, if any, the data can also be stored in the foreign country, if required. System providers
shall ensure compliance of above within a period of six months and report compliance of the same to
the RBI by October 15, 2018. System providers shall submit the System Audit Report (SAR) on
completion of the requirement givenabove. The audit should be conducted by CERT-IN empaneled
auditors certifying completion of activity.
Prohibition on dealing in Virtual Currencies (VCs) (April 6, 2018): In view of the associated risks,
RBI has decided that, with immediate effect, entities regulated by the Reserve Bank shall not deal in
VCs or provide services for facilitating any person or entity in dealing- with or settling VCs. Such
services include maintaining accounts, registering, trading, settling, clearing, giving loans against
virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and
transfer / receipt of money in accounts relating to purchase/ sale of VCs. Regulated entities which
already provide such services shall exit the relationship within three months from the date of this
circular.
National Electronic Funds Transfer (HEFT) system — Settlement at half-hourly intervals (May 08,
2017): RBI has decided to introduce 11 additional settlement batches during the day (at 8.30 am, 9.30
am, 10.30 am 5.30 pm.and 6.30 pm), taking the total number of half hourly settlement batches during
the day to 23. The starting batch at 8.00 am and closing batch at 7.00 pm shall remain the same. The
return discipline shall also remain the same i.e., B+2 hours (Settlement batch time plus two hours) as per
extant practice.
Preservation of CCTV recordings (December 13, 2016): As per extant guidelines, in order to facilitate
identification of people abetting circulation of counterfeit notes, banks should cover the banking
hall/area and counters under CCTV surveillance and recording and preserve the recording. Now, RBI has
further advised banks to preserve CCTV recordings of operations at bank branches and currency chests
for the period from November 08 to December 30, 2016, until further instructions, to facilitate
coordinated and effective action by the enforcement agencies in dealing with matters relating to illegal
accumulation of new currency notes.
NEFT — Customer Service and Charges (March 17, 2016): Banks were required to submit data
pertaining to NEFT transactions by walk-in customers on a quarterly basis starting from quarter
ended March 31, 2014. RBI has now discontinued the submission of this report.
RTGS service charges for members and customers (February 4, 2016): Processing charge per
transaction: Every outward transaction will attract flat processing charge at the earlier cap of Rs0.50
(exclusive of service tax) and a time varying charge as under:
Time of Settlement at RBI Time varying charge per outward
Srno. transaction
From To
(exclusive of service tax)
1 08:00 hours 11:00 hours Nil
2 After 11:00 13:00 hours Rs 2.00
3 After 13:00 16:30 hours Rs 5.00
4 After 16:30 Rs 10.00
RTGS: Customer Charges: The maximum charges that can be recovered by a member (if it so desires)
from its customers will remain unchanged as under. Customers should not be charged for inward
transaction, as hitherto.The revised service charge for RTGS Members will come into effect from
01.04.2016
RTGS Transaction Maximum Customer Charges (exclusive of service tax)
Inward transactions Free
Outward transactions
Rs 2 lakh to Rs 5 lakh Rs 25 + applicable time varying charge, subject to a maximum
Above Rs 5 lakh Rs 50 + applicable time varying charge, subject to a maximum
Discontinuation of the requirement for Paper to Follow (P2F) for Central Government cheques
under Cheque Truncation System (December 31, 2015): RBI in consultation with the Office of the
Controller General of Accounts (CGA), Ministry of Finance, has decided to dispense with the current
requirement of forwarding the paid Central Government cheques in physical form. (commonly
known as P2F) to the Government departments. The government cheques would henceforth be paid
in CTS clearing solely based on their electronic images. The paid cheques in physical form would be
retained by the presenting bank. The presenting banks are required to preserve the physical
instruments in their custody securely for a period of 10 years. Drawee banks shall preserve the
images of all government cheques for a period of 10 years with themselves or through the National
Archival System of National Payments Corporation of India (NPCI).
Mobile Banking Transactions in India - Customer Registration for Mobile Banking (December 17,
2015): The National Payment Corporation of India (NPCI) has developed the mobile banking
registration service / option on the National Financial Switch (NES). The service is ready to be
deployed on ATMs of all the NFS member banks. All the banks participating in NFS should carry out
necessary changes in their respective ATM switches and enable the capability of customer
registration for mobile hanking at all their ATMs latest by 31st March 2016.
RBI relief for e-wallet users in fraud cases : RBI has absolved customers using prepaid payment
instruments (PPIs) viz. mobile wallets, prepaid payments cards, and paper vouchers such as Sodexo, of
liabilities arising out of a fraud, if the incident is reported within three days. If it is a third-party breach,
where the transgression is neither by the PPI issuer nor the customer but elsewhere in the system, the
customer will have no liability if they report it within three days. If the fraud is reported within four to
seven days, the liability will be the transaction value or ₹10,000 per transaction, whichever is lower.
RBI's panel to boost digitization of payments : In order to encourage digitization of payments and
enhance financial inclusion through digitization, the RBI is setting up a high level Committee on
deepening of digital payments. The Committee will be chaired by former UIDAI Chairman Mr. Nandan
Nilekani, and shall also include, former RBI Deputy Governor Mr. H.R. Khan, Mr. Kishore Sansi (former
Head of Vijaya Bank) Ms. Aruna Sharma (former Secretary, Ministry of Information Technology and Steel),
and Mr. Sanjay Jain (Chief Innovation Officer, Centre for Innovation, Incubation & Entrepreneurship
(CIIE), IIM Ahmedabad). The committee shall review the existing status of digitization of payments in
India, identify the gaps in the ecosystem, suggest ways of bridging those gaps, and assess the current
levels of digital payments in financial inclusion. It will also undertake cross-country analyses to identify
what best practices can be adopted to accelerate digitization of the economy and financial inclusion
through digital payments. It will suggest measures to strengthen the safety and security of digital
payments; and, is also expected to provide a roadmap for increasing customer confidence while
accessing financial services through digital modes.
RBI permits card networks to offer tokenization services : RBI has permitted authorized card payment
networks to offer card tokenization services to any token requestor, or third-party app providers.
Presently, this facility shall be offered through mobile phones/tablets only.All existing instructions of the
RBI on safety and security of card transactions, including the mandate for additional factor of
authentication (AFA) and PIN entry, shall be applicable for these transactions. The networks shall hold
ultimate responsibility for the services. They will not be allowed to recover any charges from customers
for availing this services.Before providing card tokenization services, the networks will have to set up a
mechanism for periodic system audit of all entities involved in providing the services. This system audit
shall be undertaken by empaneled auditors of the Indian Computer Emergency Response Team (CERT-In),
who shall send a copy of the audit report with their comments, to the RBI.Details of the number of cards
registered for the services, and, transaction data shall be submitted at monthly intervals to RBI's
Department of Payment and Settlement Systems.The card networks have to mandatorily ensure that the
cardholder’s PAN cannot be found out from the token and vice versa, by anyone except the card
network. Also, the registration of a card on the token requestor’s app shall be done only with explicit
customer consent through AFA, and not through forced, default or automatic selection of check boxes,
radio buttons or similar devices. Card networks will also need to set up a dispute-resolution process and a
mechanism to ensure that the transaction request has originated from an identified device.
8. GENERAL BANKING
Revision of Interest Rates on Small Savings Schemes w.e.f. 01.10.2019 to 31.12.2019 and also same
wef 01.01.2020 to 31.03.2020
Scheme Revised Rate of Interest Compounding frequency
Senior Citizen Savings Scheme (SCSS) 8.6 % p.a. Quarterly and paid
Public Provident Fund Scheme (PPF) 7.9 % p.a. Annually
KisanVikasPatra (KVP) 7.6 % p.a. Annually
(will mature in 113 months)
SukanyaSamriddhi Account Scheme 8.4 % p.a. Annually
Reserve Bank of India, has informed that the Agency Commission rates on eligible Government
transactions has been revised as under, and has to be carried out with effect from July 01, 2019:
Sl Type of Transaction Unit Existing Rates Revised Rates
No
1 Receipts - Physical Per transaction Rs 50/- Rs 40/-
2 Receipts – e-mode Per transaction Rs 12/- Rs 9/-
3 Pension Payments Per transaction Rs 65/- Rs 75/-
4 Payments other than Per Rs 100 turnover 5.5 Paise 6.5 Paise
Pension
Claim: A review of claim process was done. Based on review and also taking into consideration, the
references received from agency banks in this regard, RBI decided to replace the current process of
centralised claims submission with a system whereby applicable GST (18% at present) shall be paid along
with agency commission by respective ROs of RBI / CAS, Nagpur. For eligible government transactions
done with effect from July 01, 2019, agency banks shall submit the agency commission claims, including
applicable GST amount, as per revised agency commission rates indicated above, to RBI at respective ROs
/ CAS, Nagpur as per the extant instructions issued by RBI in this regard. TDS on GST shall be deducted as
applicable by RBI at the time of making agency commission payment.
Remittance of government receipts (physical receipts) to Government account Office of Controller
General of Accounts, Ministry of Finance has prescribed revised timelines (on 19.09.19) for credit of
physical government receipts into government accounts at RBI, in supersession of earlier instructions on
this matter. As per these time lines, the period is T + 1 day (including put through). For branches in
North Eastern States the period is T + 2 days (including put through). There is no change e-receipts time
line which continues to be T + 1 working day as per Govt. circular dated 9.3.16. The instructions become
effective from October 1, 2019
Recovery of Interest on delayed remittance of Government Receipts into Government Account As per
RBI circular dated 13.02.13, in order to bring uniformity in the procedure of reporting both central and
State government transactions to Reserve Bank, it was advised that the petty claims of delayed period of
penal interest involving amount of Rs.500/- or below will be ignored and excluded from the purview of
penal interest. To bring further uniformity in the procedure for reporting both central and state
government transactions to RBI, it decided (26.09.19) with the approval of Comptroller and Auditor
General of India that instructions given in para 7.4 of CGA’s OM S-11012/1(31)/AC(22)/2015/ RBD/332-
424 dated March 9, 2016, will be made applicable to State government transactions also i.e ignoring
petty claims of penal interest involving an amount of Rs.500/or below and excluding them from the
purview of penal interest, and applying the limit of penal interest of Rs.500/- on per transaction basis.
SOVEREIGN GOLD BONDS: 2019-20 Government of India, in consultation with the Reserve Bank of
India, has decided to issue Sovereign Gold Bonds (SGB). The SGB will be issued every month in tranches
from June 2019 to Sept. 2019 as per the calendar specified below: S.No. Tranche Date of Subscription
Date of Issuance 1 2019-20 Series I June 3-7, 2019 June 11, 2019 2 2019-20 Series II July 8–12, 2019 July
16, 2019 3 2019-20 Series III Aug. 5-9, 2019 Aug.14, 2019 4 2019-20 Series IV Sept. 9-3, 2019 Sept.17,
2019 The Bonds will be sold through SCBs (except Small Finance Banks and Payment Banks), Stock
Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges
viz., NSE and BSE. The features of the Bond are: a) Issuance: To be issued by Reserve Bank India on
behalf of the Government of India. b) Eligibility: The Bonds will be restricted for sale to resident
individuals, HUFs, Trusts, Universities and Charitable Institutions. c) Denomination: The Bonds will be
denominated in multiples of gram(s) of gold with a basic unit of 1 gram. d) Tenor: The tenor of the Bond
will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment
dates. e) Minimum Size: Minimum permissible investment will be 1 gram of gold. f) Maximum Limit: The
maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar
entities per fiscal (April-March). A self-declaration to this effect will be obtained. The annual ceiling will
include bonds subscribed under different tranches during initial issuance by Govt. and those purchased
from the Secondary Market. g) Joint Holder: In case of joint holding, the investment limit of 4 KG will be
applied to the first applicant only. h) Issue Price: Price of Bond will be fixed in Indian Rupees on the basis
of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers
Association Limited for the last 3 working days of the week preceding the subscription period. The issue
price of the Gold Bonds will be Rs.50 per gram less for those who subscribe online and pay through digital
mode. i) Payment Option: Payment for the Bonds will be through cash payment (upto a maximum of Rs.
20,000) or demand draft or cheque or electronic banking. j) Issuance form: The investors will be issued
a Holding Certificate for the same. The Bonds are eligible for conversion into demat form. k) Redemption
Price: The redemption price will be in Indian Rupees based on previous 3 working days simple average of
closing price of gold of 999 purity published by IBJA. l) Sales Channel: Bonds will be sold through
Commercial banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and
recognised stock exchanges viz., NSE and BSE, either directly or through agents. m) Interest Rate: The
investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the
nominal value. n) Collateral: Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is
to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time. o) KYC
Documentation: Know-your-customer (KYC) norms will be the same as that for purchase of physical gold.
KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required. Tax treatment:
The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961. The capital
gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will
be provided to long term capital gains arising to any person on transfer of bond. q) Tradability: Bonds
will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI. r)
SLR Eligibility: Bonds acquired by the banks through the process of invoking lien/hypothecation/pledge
alone, shall be counted towards Statutory Liquidity Ratio. s) Commission: Commission for distribution of
the bond shall be paid at the rate of 1% of the total subscription received by the receiving offices and
receiving offices shall share at least 50% of the commission so received with the agents or sub agents for
the business procured through them.
Disclosure on Exposure to Infrastructure Leasing & Financial Services Limited (ILFS) and its group
entities -RBI has advised banks to refer to the National Company Law Appellate Tribunal’s (NCLAT) order dated
February 25, 2019 in respect of I.A No. 620 of 2019 in Company Appeal (AT) No. 346 of 2018, in terms of which “no
financial institution will declare the accounts of ‘Infrastructure Leasing & Financial Services Limited’ or its entities
as ‘NPA’ without prior permission of this Appellate Tribunal”. In this context, banks and AIFIs have been advised
by RBI on 24.04.19, to disclose in their notes to accounts, the information in the prescribed proforma.
Wholesale Price Index (WPI) WPI measures the average change of the price of a fixed set of goods at
first point of bulk sale in a commercial transaction in the domestic market over a given period of time.
The monthly WPI presented in the table are compiled and published by the Office of the Economic
Adviser, under the Ministry of Commerce and Industry, Govt. of India. The current WPI series (Base 2011-
12 = 100) has 697 items in the commodity basket, for which 8,331 price quotations are obtained. All
items having large transactions in the economy are considered for compilation of the index to the extent
feasible. Thus the series has a representative basket of commodities as well as their varieties/grades and
markets. These items are aggregated at sub-group/group/ major group/all commodities index. The first
release of monthly WPI is generally after two weeks at the month-end, which is ‘provisional’ in nature
because some price quotations are received belatedly. The ‘final’ index is released a month after the
provisional index, as by that time almost all the required price quotations become available. The index
numbers are compiled on the basis of Laspeyres’ formula as weighted average of price relatives.
Incentive for improving service to non-chest branches On 23.05.19, RBI decided to allow the large
modern Currency Chests to increase the service charges to be levied on cash deposited by non-chest bank
branches from the existing rate of Rs.5/- per packet of 100 pieces to a higher rate subject to a maximum
of Rs.8/- per packet. For this purpose, only a Currency Chest fulfilling the Minimum Standards for a
Currency Chest as detailed (details given hereunder) shall be eligible to be classified as a large modern
Currency Chest. Banks may approach the Issue Office of Reserve Bank under whose jurisdiction the
Currency Chest is located for such classification. The increased rates can be charged only after such
classification by the Issue Office concerned. The Non-Chest bank branches linked with such large modern
Currency Chests may be advised of the applicability of the increased rates at least 15 days in advance.
Minimum Standards for a Currency Chest (08.04.19) RBI decided to have following minimum standards
for setting up new CCs: i. Area of the strong room/ vault of at least 1500 sq. ft. For those situated in
hilly / inaccessible places (as defined by central / state government/ any appropriate authority), the
strong room/ vault area of at least 600 sq. ft. ii. Processing capacity of 6,60,000 pieces of banknotes per
day. For those situated in the hilly/ inaccessible places, capacity of 2,10,000 pieces of banknotes per
day. iii. Amenability to adoption of automation and adaptability to implement IT solutions. iv. CBL of
Rs.10 billion, subject to ground realities and reasonable restrictions, at the discretion of the Reserve
Bank.
INCENTIVE FOR IMPROVING SERVICE TO NON-CHEST BRANCHES  As a measure towards incentivising
modern Currency Chests (CCs) for improving service to non-chest branches, the RBI has decided to allow
them to increase the service charges levied by them on cash deposited by non-chest bank branches from
the existing rate of Rs.5 per packet of 100 pieces to a higher rate of maximum Rs.8/- per packet.  For
this purpose, only a Currency Chest fulfilling the following minimum standards are eligible: a) Area of the
strong room / vault of at least 1500 sq. ft. For those situated in hilly / inaccessible places, the strong
room/ vault area of at least 600 sq. ft. b) Processing capacity of 6,60,000 pieces of banknotes per day.
For those situated in the hilly / inaccessible places, capacity of 2,10,000 pieces of banknotes per day. c)
Amenability to adoption of automation and adaptability to implement IT solutions.
d) Currency Balance Limit (CBL) of Rs.10 billion, subject to ground realities and reasonable restrictions,
at the discretion of the RBI. e) Adherence to other extant technical specifications relating to
construction, etc.
Deferral of Implementation of Indian Accounting Standards (Ind AS)
On 05.04.18, the implementation of Ind AS was deferred by one year pending necessary legislative
amendments to the Banking Regulation Act, 1949 and level of preparedness of many banks. RBI informed
on 22.03.19 that the legislative amendments recommended by the Reserve Bank are under consideration
of the Government of India. Accordingly, RBI has decided to defer the implementation of Ind AS till
further notice.
LATEST GUIDELINES ABOUT REPORTING OF CURRENCY CHEST TRANSACTIONS
1) REPORT OF CURRENCY CHEST TRANSACTIONS The minimum amount of deposit into / withdrawal
from currency chest will be Rs.1,00,000 and thereafter, in multiples of Rs.50,000.
a) Time Limit for Reporting The currency chests / Link Offices should invariably report all transactions
through CyM – CC portal on the same day by 7 pm. The Sub-Treasury Offices (STOs) should report all
transactions directly to the Issue Office of the Reserve Bank by 7 pm on the same day. b) Relaxation in
respect of strike period in banks Relaxation in the reporting period on account of strike situation will be
considered on case-to-case basis.
2) LEVY OF PENAL INTEREST: a) Delay in Reporting: In the event of delay in reporting currency chest
transactions, penal interest at the rate indicated in paragraph 3 of this circular will be levied on the
amount due from the chest holding bank for the period of delay. Penal interest will be calculated on T+0
basis i.e. penal interest will be levied in respect of transactions not reported by currency chests / Link
Offices to the Issue Office on the same business day within the time limit prescribed above. Penal
interest will also be charged for delay in reporting by STOs directly linked to Issue Department of the
circle.
b) Wrong Reporting: Penal interest will be levied in respect of cases of wrong reporting in the same
manner till the date of receipt of corrected advice by RBI. As debits/credits to banks' current accounts
are raised on the basis of the transactions reported by the currency chests / Link Offices, penal interest
will invariably be levied in all cases of wrong reporting by the currency chests. It is expected that
currency chests / Link Offices would ensure the correctness of figures reported on the CyM - CC portal.
Particular care should be taken to ensure that remittances of fresh notes/notes to the currency chests
are not reported as 'deposit' transactions on the portal.
c) Penal interest for inclusion of ineligible amounts in the currency chest balances
(i) Penal interest will be levied in all cases where the bank has enjoyed 'ineligible' credit in its current
account with RBI on account of wrong reporting/delayed reporting/ non-reporting of transactions. Penal
measures will also be taken in cases of shortages in chest balances/remittances, shortages due to
pilferage/ frauds, counterfeit banknotes detected in chest balances/remittances as per the prevailing
“Scheme of Penalties”.
(ii) Further, only cash held in the custody of joint custodians and 'freely available' to them is eligible for
inclusion in the chest balances. Thus, cash kept for safe custody in sealed covers for whatever
reasons/cash in trunks/bins under the lock and key of any official/s other than the Joint Custodians or
bearing a third lock put by any official in addition to the two locks of the Joint Custodians is not eligible
for being included in the chest balances. If such amounts are included in chest balances, these will be
treated as instances of wrong reporting and will attract penal interest at the rate specified.
(iii) In all the above cases, penal interest will be levied from the date of inclusion of 'ineligible' amounts
in chest balances till the exclusion of such amounts from chest balances. Penal measures for shortages in
chest balances / remittances, shortages due to pilferage / frauds, counterfeit banknotes detected in
chest balances/remittances will be taken on the basis of prevailing “Scheme of Penalties”.
3) LEVY OF PENALTY : a) Reporting of Soiled note remittances to RBI: Soiled note remittances to RBI
should not be shown as withdrawal by chests/link offices. In case such remittances to RBI are wrongly
reported as 'withdrawals', a penalty of Rs.50,000 will be levied irrespective of the value of remittance
and period of such wrong reporting. b) Reporting of diversions in CyM – CC portal: All currency chest
diversions (both between chests of the same bank and between chests of different banks) have to be
reported through ‘Diversion Module’ of CyM-CC Portal. The CC sending the diversion should initiate the
diversion entry. The receiving CC should acknowledge the same. Diversions must not be reported as
Deposit / Withdrawal. A penalty of Rs.50,000 will be levied for such wrong reporting.
c) Delayed reporting where currency chests had “Net Deposit”: Penal interest at the prevailing rate for
delayed reporting of the instances where the currency chest had reported “net deposit” may not be
charged. However, in order to ensure proper discipline in reporting currency chest transactions, a flat
penalty of Rs.50,000 may be levied on the currency chests for delayed reporting irrespective of the value
of net deposit.
4) RATE OF PENAL INTEREST: Penal interest shall be levied at the rate of 2% over the prevailing Bank
Rate for the period of delayed reporting / wrong reporting/non-reporting / inclusion of ineligible
amounts in chest balances. Levy of penal interest in respect of currency chests at treasuries: The above
instructions shall be applicable to currency chests at treasury/sub-treasury offices also.
5) REPRESENTATIONS
a) Delayed Reporting: As the sole criterion for levy of penal interest for delayed reporting is the number
of days of delay, there should ordinarily be no occasion for banks to request for reconsideration of the
Reserve Bank's decision in individual cases. However, representations, if any, on account of genuine
difficulties faced by chests especially in hilly/remote areas and those affected by natural calamities,
etc., may be made to the Issue Office concerned through the Head / Controlling office of the bank
concerned within a month from the date of debit of the bank concerned.
b) Wrong Reporting: In the case of wrong reporting representations for waiver will not be considered. c)
As the intention behind the levy of penal interest is to inculcate discipline among banks so as to ensure
prompt / correct reporting, pleas by banks for waiver of penal interest on grounds that
delayed/wrong/non-reporting did not result in utilization of the Reserve Bank's funds or shortfall in the
maintenance of CRR/SLR or that they were the result of clerical mistakes, unintentional or arithmetical
errors, first time error, inexperience of staff etc., will not be considered as valid grounds for waiver of
penal interest. Further, we will take a serious view of all such lapses.
REVIEW OF THE PERFORMANCE OF BANKS  The Finance Minister reviewed the performance of banks
recently in a meeting with the top management of Public Sector Banks, HDFC Bank, ICICI Bank, Axis
Bank, Kotak Mahindra Bank and Citi Bank.  The meeting is the first of a series of meetings convened to
discuss current economic issues with key stakeholders, including some of the industry sectors whose
growth has been affected in recent months. This meeting was on the banking sector to be followed by
meetings with the MSME sector, the automobile sector, industry associations, financial market
stakeholders, and real estate and home-buyers.  The Government will factor in the takeaways from
these consultations for appropriate policy responses to maintain a high growth trajectory and to address
sector-specific issues. The meeting on the banking sector focused on the following aspects:
A) OVERALL CREDIT: Overall credit growth from the banking system continues to be at 12%, which is
marginally lower than the growth of 13.3% at the end of March 2019. However, with turnaround in the
NPA cycle, high provision cover of over 75%, and record recovery, bank balance-sheets are healthier than
before. Banks are now, therefore, in position to step up lending.
B) CONTACTLESS DIGITAL LENDING:  Banks committed to step up affordable and hassle-free credit with
a special focus on the MSME and consumer finance sectors.  Banks have decided to increase the in-
principle approval limit for contactless digital lending to MSMEs on the PSB59minutes.com portal to Rs. 5
crore.  Further, banks would be expanding the contactless digital lending facility through the portal to
retail lending products for personal loans, vehicle loans and home loans.
C) CO-ORIGINATION OF LOANS: Banks committed to leverage co-origination of loans jointly by banks and
NBFCs under RBI’s co-origination policy. This will combine the advantages of lower cost funds and large
financing capacity of banks with the doorstep reach of the NBFC sector, to the benefit of both. Banks will
also enhance consumer ease through doorstep delivery of lending and repayment services.
D) NBFC AND HFC SECTOR:  Bank credit to the NBFC and HFC sector has risen by nearly Rs. 90,000 crore
since Sept. 2018, helping address the sector’s liquidity needs. In addition, pool buy-outs of over Rs.
40,000 crore by Banks have helped the NBFC and HFC sector reduce their asset liability mismatch. 
Banks committed to continue supporting the sector by making prudent use of partial credit guarantee
from the Govt. for purchase of pooled assets of NBFCs and HFCs of up to Rs. 1 lakh crore.  National
Housing Bank has also brought out a new scheme to enable HFCs to take refinance from NHB for their
pool of existing developer loans as well as individual housing loans and HFCs can then use the liquidity so
provided exclusively for individual loans for affordable housing.
E) AUTOMOBILE SECTOR: The automobile sector has witnessed falling sales. Sales in this sector have been
driven by vehicle loans, in which NBFCs had a major share. In view of the decline in NBFC credit for
vehicle finance, banks have committed to step up credit support for vehicle purchases.
F) MSME SECTOR:  Banks would redouble efforts to extend cheaper, hassle-free and cash-flow based
credit to MSMEs by leveraging GST, digital payments and alternate data. Banks would also expedite
restructuring of viable MSME units facing stress, under the special MSME restructuring dispensation
available till March 2020.  The recommendations of the U. K. Sinha committee would be taken forward.
The committee had highlighted the need to meet working capital requirements of India’s growing MSME
service. Banks agreed to come out with specific working capital products for service sector MSME units.
G) INTEREST RATE TRANSMISSION: Since December 2018, monetary policy has been eased substantially
with policy rates being cut and the policy outlook being changed to accommodative. Banks agreed to
take steps as per RBI guidelines to review their lending rates.
H) DIGITALISATION:  As a result of Government’s thrust on digitalization, digital transactions have grown
to 769% of GDP by March 2019, up from 726% a year ago. The recent amendments mandating that
business establishments with over Rs. 50 crore turnover accept digital payments and waiver of charges on
NEFT and RTGS will give a fillip to further digitalisation.  Banks committed to review charges on digital
payments with a view to making them cheaper for customers as compared to cash payments. They also
committed to expand services available through mobile and Internet banking and offer services on these
digital platforms in regional languages as well.  Banks also articulated some issues they have been facing
in service tax which will be examined by the Govt.
RBI GOVERNOR MEETS CEOs OF PSBs  The Governor, Reserve Bank of India held a meeting with the
CEOs of the public sector banks and the Chief Executive of Indian Banks Association (IBA) on July 19,
2019.  In his opening remarks, the Governor acknowledged discernible improvements in the banking
sector while underscoring that several challenges still remain to be addressed, particularly with regard to
the stressed asset resolution and credit flows to needy sectors. During the meeting the following issues
were discussed:  Less than desired level of transmission of monetary policy rates;  Credit and deposit
growth on the back of a slowing economy; flow of credit to needy sectors while following prudent
lending, robust risk assessment and monitoring standards;  Improving recovery efforts;  Giving impetus
to resolution of stressed assets facilitated by revised framework for resolution announced by the RBI. 
Strengthening internal control mechanism for improved fraud risk management;  Recent initiatives to
address issues relating to NBFCs and the role banks can play in mitigating lingering concerns;  Deepening
digital payments.  The Governor also underlined the importance of expanding and deepening digital
payments ecosystem in line with the recommendations of the Report of the Committee on Deepening of
Digital Payments headed by Sh. Nandan Nilekani and RBI’s Payment System Vision Document 2021.  In
this context, on the suggestion of the Governor, Banks agreed to identify one district in each state to
make it 100% digitally enabled within a time frame of one year in close coordination and collaboration
with all stakeholders, including SLBCs, State Governments, Regional offices of RBI, etc.  To the extent
feasible, such districts may be converged with the 'Transformation of Aspirational Districts' programme of
the Government of India.
Security / Inspection needs and Movement of Treasure (April 13, 2016): RBI, vide circular dated
November 14, 2008 in respect of construction of new Currency chests advised banks to maintain
Smoke Detection and Fire Alarm System, as also the Fire Fighting System in good working order
through service contracts. RBI, vide circular dated April 13, 2016 advised that all the banks having
currency chests should ensure conducting of fire audits bi-annually (once in two years) by the
officials from the District Fire Department. The banks may also ensure that the working condition of
the Hotline and other security related gadgets, Viz, access control, CCTV, etc. are checked once in
a fortnight by the CC officials.
Amendments to Reserve Bank of India (Note Refund) Rules, 2009 (September 7, 2018): RBI has
made amendments to the Reserve Bank of India (Note Refund) Rules, 2009 to enable the public to
exchange mutilated notes in Mahatma Gandhi (New) series at bank branches and RBI offices, which
are smaller in size compared to the earlier series. There is a change in the minimum area of the
single largest undivided piece of the note required for payment of full value for notes of rupees
fifty and above denominations, which is detailed in the amendments. 1. The value of a mutilated
note of less than rupees fifty denomination may be refunded in full if the undivided area of the
single largest piece of the note is as specified in column (5) of the Table below.
1
Minimum area (in cm2)
Denomination Length widgth(cm) Denomination Area (in required for
(cm) cm2) full value*
1 9.7 6.3 61.11 31
2 10.7 6.3 67.41 34 .
5 11.7 6.3 73.71 37
10 13.7 6.3 86.31 44
10 (New) 12.3 6.3 77.49 39
20 14.7 6.3 92.61 47
20 (New) 12.9 6.3 81.27 41
(2) The payment of claim in respect of note .of rupees fifty and above denominations shall be made
in the following manner: (i) Full value of the mutilated notes of the above denominations shall be
payable if the area of the single largest undivided piece of the note presented is more than 80
percent of the area of the respective denomination rounded off to the next complete square
centimeter; (ii) if the undivided area of the single largest undivided piece of the note presented is
equal to or more than 40 percent and less than or equal to 80 percent of the area of the respective
denomination rounded off to the next complete square centimeter, half the value of the note is
payable. (iii) If the area of the single largest undivided piece of the note is less than 40 percent, no
value shall be payable, and the claim shall be rejected. (iv) if the claim of mutilated notes of rupees
fifty and above denominations consist of a note composed of two pieces of the same note and the two
pieces, individually have an area equal to or more than 40 percent of the total area of the note in that
denomination then the claim may be refunded for full value of the note.
TABLE 2
Minimum area (in Minimum area (in
Denominati Length Width Area (in cm2) required for cm2) required for
on (cm) (cm) cm2) payment of full payment of half
(1) (2) (3) (4) value
, (5) value
(6)
50 14.7 7.3 107.31 86 43
50 (New MG 13.5 15.7 6.6 7.3 89.10 72 36
SeriesL
100 114.61 92 46
100 (New MG 14.2 6.6 93.72 75 38
Series)
200 14.6 6.6 96.36 78 39
500 15.0 6.6 99.00 80 40
2000 16.6 6.6 109.56 88 44
Review of Currency Distribution & Exchange Scheme (CDES) (March 01, 2018): RBI has been providing
several Incentives to banks, from time to time for Installation of various machines by them to encourage
technology absorption in their currency operations for Improved customer service. RBI, has now decided
to withdraw' the incentives which was being given to the banks for Installation of Cash Recyclers and
ATMs dispensing only lower denomination notes.
Acceptance of coins (I-ebruary 15, 2018): As per RBI guidelines, banks should accept coins of all
denominations tendered at their counters either for exchange or for deposit in accounts. It will be
preferable to accept coins, particularly, in the denominations of Rs 1 and 2, by weighment.
However, accepting coins packed in polythene sachets of 100 each would perhaps be more
convenient for the cashiers as well as the customers. Such polythene sachets may be kept at the
counters and made available to the customers. A notice to this effect may be displayed suitably
inside as also outside the branch premises for information of the public. To obviate the problems of
storage of coins at the branches, coins may be remitted to the currency chests. The stock thus built
in the currency chest should be utilised for the purpose of recirculation. In case the stocks of these
coins reach beyond the holding capacity of the currency chest for lack of demand, the Issue
Department of the RBI may be approached for remittance of coins.
Levy of Penal Interest — Delayed Reporting (February 9, 2018) Presently, penal interest is levied for all
cases where the bank has enjoyed "ineligible" credit in its current account with the RBI on account of
wrong / delayed / non-reporting of transactions i.e. the currency chest had reported a net deposit.
However, instances of delayed reporting where the currency chest had "net deposit" i.e. the currency
chest did not enjoy RBI funds, are being dealt with differently by Issue offices of RBI. Now, RBI has
decided that, penal interest at the prevailing rate for delayed reporting of the instances where the
currency chest had reported "net deposit" may not be charged. However, in order to ensure proper
discipline in reporting currency chest transactions, a flat penalty of Rs 50,000 may be levied on the
currency chests for delayed reporting as in the case of wrong reporting of soiled note remittances to RBI
/ diversions shown as "Withdrawal".
Fire Audit of Currency Chests (October 25, 2018): RBI, vide circular dated April 13, 2016 had advised
all chest-maintaining banks to ensure that fire audits of currency chests are conducted once in two years
by the officials from the District Fire Department. In case of non-availability of officials of the District
Fire Department, the fire audit can also be conducted by the agencies approved by the respective State
/ District Fire Departments.
Reporting of Transactions by agency banks to RBI (November 30, 2017): As per the extant
instructions, state government transactions (electronic as well as in physical mode) of previous
month reported after 8th of the succeeding month and those pertaining to earlier months should be
reported to RBI through a separate statement for accounting, after being confirmed by the
competent authorities of concerned state government. RBI has now decided that, for Central
Government transactions (electronic as well as in physical mode), if the transactions or any
adjustments thereof are reported after a gap of 90 days from the date of transaction, agency banks
have to obtain prior approval from concerned ministry/department and submit the same to RBI
separately at the time of reporting such transactions for settlement.
Scheme of Penalties for bank branches based on performance in rendering customer service to the
members of public (October 12, 2017): 1. Penalties: Penalties to be imposed on banks for deficiencies in
exchange of notes and coins/remittances sent to RBI/operations of currency chests etc. are as follows:
Sr.NoNature of Irregularity Penalty
i. Shortages in soiled note remittances and For notes in denomination upto Rs.50: Rs.50/- per piece
currency chest balances In addition to the loss For notes in denomination of
Rs.100 & above: Equal to the value of the denomination per
piece in addition to the loss. Shortages of 100 pieces and
above per remittance shall be debited immediately.
Penalty may be levied on reaching a limit of 100
pieces in a cumulative manner.
ii. Counterfeit notes detected in soiled note Penalty on account of detection of counterfeit notes by
remittances and currency chest balances. RBI from soiled note remittance of
banks and in currency chest balances shall be
levied as given below: Penalty at 100% of the notional
value of counterfeit notes, in addition to the recovery of
loss to the extent of the notional value of such notes, will
be imposed under the following circumstances: a) When
counterfeit notes are detected in the soiled note
remittance of the bank. b) If counterfeit notes are
detected in the currency chest balance
of a bank during Inspection / Audit by RBI.
iii. Mutilated notes detected in soiled note Rs 50/- per piece irrespective of the denomination
remittances and currency chest balances Mutilated notes of 100 pieces and above per remittance
shall be debited immediately. Penalty may be levied on
reaching a limit of 100 pieces in a cumulative manner.
iv. Non-compliance with operational guidelines Penalty of Rs 5000 for each irregularity. Penalty will
by currency chests detected by be enhanced to Rs.10,000 in case of repetition.
RBI officials a.Non-functioning of Penalty will be levied immediately.
CCTV
b. Branch cash/documents kept In
strong room
c.Non-utilization of NSMs for sorting of notes
(NSMsnot used for sorting of
high denomination notes
v. received
Violationover the counter
of any termor not used for Rs 10,000 for any violation of agreement or deficiency •
of agreement
with RBI of service. Rs 5 lakh in case there are more than 5
(for opening and maintaining currency instances of violation of agreement/deficiency in
chests) or deficiency in service in providing service by the The levy of such penalty will be placed
in public
exchange facilities, as detected by RBI
domain. Penalty will be levied immediately.
officials e.g. a) Non-issue of
coins over the counter to any member
of public despite having stock.
Refusal by any bank branch to exchange
soiled notes
/ refusal by any currency chest branch to
adjudcate
mutilated notes tendered by any
member of public
Non conduct of surprise
verification of chest
- balances, at least at bimonthly intervals,
by officialS
unconnected with the custody thereof and
by the
officials from the Controlling Office once in
Denial of facilities/services to linked
Other banks.
Non acceptance of lower denomination
denomination of Rs 50 and below)
members of public and linked
Detection of mutilated /counterfeit
issuable packets prepared
branches.
2. Operational Guidelines on levy of penalties: The Competent Authority to decide the nature of
irregularity will be the Officerin-Charge of the Issue Department of the Regional Office under whose
jurisdiction the defaulting currency chest/bank branch is located. Appeal against the decision of the
Competent Authority may be made by the Controlling Office of the currency chest/branch to the
Regional Director of the Regional Office concerned, within one month from the date of debit, who may
decide whether the same can be accepted/ rejected. Appeals for waiver of penalty made on grounds
such as staff being new/untrained, lack of awareness of staff, corrective action having been taken/will
be taken, etc. will not be considered.
Issue of Rs 10 banknotes with improved security features (Mar 09, 2017): RBI has issued Rs 10
denomination banknotes in the Mahatma Gandhi Series-2005 with inset letter 'L' in both the number
panels, bearing the signature of Dr. Urjit R. Patel, Governor, RBI, and the year of printing '2017' printed
on the reverse of the banknote. The numerals in both the number panels of these banknotes are in the
ascending size from left to right while the first three alpha-numeric characters (prefix) remain constant
in size.
Chest Balance Limit / Cash Holding Limit (November 29, 2016): As per extant guidelines, the
balance in a currency chest, exceeding the Chest Balance Limit / Cash Holding Limit will be deemed
to be bank's own cash, not allowing for inter-chest fungibility. In the wake of deposits of SBNs in
massive quantity and accumulations thereof, RBI has advised that SBNs deposited in the currency
chests, since November 10, 2016 will be considered as part of the chest balance in the soiled note
category but such deposits will not be reckoned for calculating Chest Balance Limit / Cash Holding
Limit. A review of the above will be taken up in the second fortnight of February 2017.
Capacity Building in Banks and AIFIs (August 11, 2016): RBI advised banks to implement following
recommendations on capacity building: Banks should identify specialised areas for certification of the
staff manning key responsibilities like Treasury operations; Risk management; Accounting — Preparation
of financial results, audit function; Credit management; marketing third party retail products and
wealth management products. The banks should ensure that by end-March 2017, the employees in
relevant areas have commenced the process of obtaining necessary certifications.
Facility for Exchange of Soiled/ Mutilated/ Imperfect Notes (July 14, 2016): (i) Exchange of soiled
notes: Where the number of notes presented by a person is up to 20 pieces with a maximum value of
Rs.5000 per day, banks should exchange them over the counter, free of charge. Where the number
of notes presented by a person exceeds 20 pieces Or Rs.5000 in value per day, banks may accept
them, against receipt, for value to be credited later. Banks may levy service charges ensuring that the
charges are reasonable and are not out of line with the average cost of providing these services.
In case tendered value is above Rs.50000, banks are expected to take the usual precautions.
Exchange of mutilated and imperfect notes by non chest branches: Where the number of notes
presented by a person is up to 5 pieces per day, non-chest branches should normally adjudicate
the notes as per the procedure laid down in Note Refund Rules, 2009 and pay the exchange value
over the counter. If the non-chest branches are not able to adjudicate the mutilated notes, the notes
may be received against a receipt and sent to the linked currency chest branch for adjudication. The
probable date of payment should be informed to the tenderers on the receipt itself and the same
should not exceed 30 days. Bank account details should be obtained from the tenderers for crediting
the exchange value by electronic means. Notes presented in -Bulk: Where the number of ,notes
presented by a person is more than 5 pieces not exceeding Rs.5000 in value, the tenderer should be
advised to send such notes to nearby currency chest branch by -insured post giving his / her bank
account details (a/c no, branch name, IFSC, etc) or get them exchanged thereat in person. All other
persons tendering mutilated notes whose value exceeds Rs.5000 should be advised to approach nearby
currency chest branch. Currency chest branches receiving mutilated notes through insured post should
credit the exchange value to the account of sender by electronic means within 30 days of receipt of
notes.
Change in Daily minimum cash reserve maintenance requirement: RBI has decided to reduce the
minimum daily maintenance of the Cash Reserve Ratio from 95% of the requirement to 90% from the
fortnight beginning April 16, 2016.
INCENTIVE FOR IMPROVING SERVICE TO NON-CHEST BRANCHES
 RBI has decided to allow the large modern Currency Chests to increase the service charges to be levied on
cash deposited by non-chest bank branches from the existing rate of Rs. 5/- per packet of 100 pieces to a
higher rate subject to a maximum of Rs.8/- per packet. For this purpose, only a Currency Chest fulfilling the
Minimum Standards for a Currency Chest shall be eligible to be classified as a large modern Currency Chest.
 Banks may approach the Issue Office of Reserve Bank under whose jurisdiction the Currency Chest is located
for such classification. The increased rates can be charged only after such classification by the Issue Office
concerned.
OUTSOURCING OF CASH MANAGEMENT – RECONCILIATION OF TRANSACTIONS
RBI had constituted a Committee on Currency Movement [Chair: Shri D.K. Mohanty, Executive Director, Reserve
Bank of India] to review the entire gamut of security of the treasure in transit. The recommendations of the
ommittee relating to timely reconciliation of transactions (i.e. ATM cash replenishment) between the bank, the
service provider and its sub-contractor have been examined. The Bank shall follow the procedure as under:
a) Cash indents by the Service Provider shall be made at least a day in advance (T-1 where T is the day of cash
loading), in consultation with the chest / nodal branch. Multiple points of cash withdrawal may be avoided
and shall be restricted to one in each centre. However, metropolitan centres may have two points of cash
withdrawal.
b) Reconciliation of transactions shall be done between the bank, the service provider and its sub-contractors
at least on a T+3 basis.
c) In the event of a dispute or the reporting of alleged / attempted breach of security / laid down
procedures, access to video footage of the ATM may be provided by the bank to the service provider and its
subcontractors on request.
Further, as a part of outsourcing arrangements for cash management, the bank shall encourage their
service provider and its sub-contractors to:
a) Put in place an efficient digital records management system for data retrieval and reconciliation.
b) Create and maintain a data base of employees at industry level through any unique mode / code of
identification by the Self Regulatory Organisation to ensure that they possess unblemished records.
RBI APPROVED MODERN CURRENCY CHESTS TO HIKE THE RATE OF SERVICE CHARGES RBI has announced that
it is to allow large modern currency chests to increase the service charges on cash deposited by non-chest bank
branches from the existing rate of Rs.5 per packet of 100 pieces to a higher rate subject to a maximum of Rs.8
per packet. For this, only a currency chest (CC) that fulfills the minimum standards will be eligible to be
classified as a large modern currency chest. The increased rates can be charged only after such classification by
the issue office concerned. The functions of currency chests includes as follows: To meet currency requirement
of public, To withdraw unfit notes, To make payment requirement of the Government, To provide an
exchange facility from one denomination to another, To exchange the mutilated notes.To avoid frequent
movement of cash
Depositor Education and Awareness Fund Scheme, 2014 (June 07, 2018): As per guidelines dated
June 26, 2014, RBI had specified that the rate of interest payable by banks to the depositors/claimants
on the unclaimed interest bearing deposit amount transferred to the DEA Fund shall be 4% simple
interest per annum until further notice. Now, RBI has decided that the rate of interest payable by banks
to the depositors/claimants on the unclaimed interest bearing deposit amount transferred to the Fund
shall be 3.5% simple interest per annum with effect from July 01, 2018. The settlement of all claims
received by the banks on or after July 01, 2018 will be at this rate, until further notice.
Small Saving Schemes — Payment of Agency Commission (February 01, 2018): All Public Sector Banks,
ICICI Bank Ltd., Axis Bank Ltd., and HDFC Bank Ltd., have been authorised by Government to receive
subscriptions under National Saving Time Deposit Scheme, 1981, National Saving (Monthly Income
Account) Scheme, 1987, National Saving Recurring Deposit Scheme, 1981 and National Saving Certificates
(VIII Issue) Scheme, 1989 in addition to the existing small saving schemes. It has been decided to pay
agency commission to authorised banks for handling the work relating to the above four small saving
schemes also as per the extant rates. All the transactions i.e. receipt, payment, penalty, interest, etc.
may be directly reported to the Central Account Section, Reserve Bank of India, Nagpur on a daily basis
like the transactions of Public Provident Fund, 1968, in order to have uniformity in reporting,
reconciliation and accounting.
Conduct of Government Business by Agency Banks — Payment of Agency Commission (June 29,
2017): The following activities do not come under the purview of agency bank business and are
therefore not eligible for payment of agency commission: (a) Furnishing of bank
guarantees/security deposits, etc. through agency banks by government contractors/suppliers,
which constitute l.,,nking transactions undertaken by banks for their customers; (b) The banking
business of autonomous/statutory hldies/Municipalities/ Corporations/Local Bodies; (c) Payments of
a capital nature such as capital contributions/subsidies/grants made by governments to cover losses
incurred by autonomous/statutory bodies/ Municipalities/ Corporations/Local Bodies; (d) Prefunded
schemes which may be implemented by a Central Government Ministry/Department (in consultation
with CGA) and a State Government Department through any bank.
Recording of PPO Number in the passbook of Pensioners / Family Pensioners (June 8, 2017): Banks
should record the PPO number in all the pension passbooks of the pensioners/family pensioners issued
to them. This is to alleviate the difficulties reported by pensioners/family pensioners to get duplicate
Pension Payment Orders (PPO) in case of missing of original PPO, transfer of pension account from one
bank/branch to another bank/branch, commencement of family pension to spouse or dependent
children after the death of pensioner, etc. in the absence of ready availability of PPO numbers.
Compliance with Provisions of 114B of the Income Tax Rules, 1962 (November 16, 2016): With a
view to ensure compliance with provisions of 114B of the Income Tax Rules, 1962, the banks are
advised as under: (a) Anybody depositing more than Rs 50,000/ - in cash in their bank account has
to submit a copy of the PAN card in case the bank account is not seeded with PAN; (b) In addition
to the above provision, in the same IT Rules, PAN reporting requirements are there for other
transactions, which banks need to insist upon.
Dishonour of cheques — Modification in procedure (August 04, 2016): As per extant guidelines,
banks have introduced a condition for operation of accounts with cheque facility that in the event
of dishonour of a cheque valuing rupees one crore and above drawn on a particular account of the
drawer on four occasions during the financial year for want of sufficient funds in the account, no
fresh cheque book would be issued. Now, RBI has decided to leave it to the discretion of the
banks to determine their response to dishonour of cheques of the account holders.
From July 1, insurers to provide claim-tracking mechanism :The Insurance Regulatory and Development
Authority of India (IRDAI) has mandated that w.e.f. July 1, all insurers must provide customers clear
updates - including a tracking mechanism on policies. It has also directed insurers to collect mobile
numbers and e-mail IDs of the policy holders at the point-of-sale and also on an ongoing basis as part of
policy servicing.
NBFCs under RBI’s ombudsman scheme :RBI has extended the coverage of ombudsman scheme to non-
deposit taking non-banking financial companies (ND-NBFCs) for expeditious redressal of complaints against
deficiency.
9. CURRENT BANKING, FINANCE & ECONOMY
Economic Survey 2018-19: Important Highlights
Guided by the dictum of "blue-sky thinking", the Economic Survey underscored the ambitious agenda of
applying principles of behavioural economics to achieve 8 percent of sustained GDP growth to make India
a $5trillion economy by 2024-25. The government has estimated gross domestic product growth of 7% for
the fiscal year 2019-2020. The theme of the Economic Survey 2019 is about enabling a ―shifting of
gears".
Survey sees Financial Year 2020 GDP growth at 7%, higher growth on stables macros. India needs to grow
at 8% per year to be $5 trillion economy by Financial Year 2025. A faster legal process should be the top
priority. Savings and growth are positively co-related. Savings must increase more than investment.
Survey argues that nudging behaviour change is the simplest way to solve many social issues. Top
policymakers must ensure actions are predictable. Policymaking needs: 1. Clear Vision 2. Strategic
blueprint 3. Tactical tools for constant recalibration. The success of MGNREGS shows govt. schemes can
make a difference on the ground with skillful use of technology. A minimum wage policy for the bottom
rung of wage earners to drive up demand and strengthening the middle class. Indian MSMEs need to be
freed from shackles that convert them into dwarfs. MSMEs need to be seen as a source of innovation,
growth and job creation. Policies should be reoriented forMSMEs growth, create greater profits for their
owners and contribute to job creation and productivity in the economy. NBFC stress reason for Financial
Year 2019 slowdown. Decline in NPAs should push up CAPEX cycle. The general fiscal deficit is seen at
5.8% in Financial Year 2019 Vs. 6.4% in Financial Year 2018. Investment rate seen higher in Financial
Year 2020 on improved demand. Oil prices are seen declining in Financial Year 2020. Accommodative
MPC policy to help cut real lending rates.
Union Budget 2019-20: In a Nutshell India‘s first full-time woman Finance Minister Nirmala Sitharaman
presented the maiden budget.
Expenditure: The government proposes to spend Rs 27,86,349 crore in 2019. Receipts: The receipts
(other than net borrowings) are expected to increase by 14.2% to Rs 20,82,589 crore.
GDP growth: The government has assumed a nominal GDP growth rate of 12% (i.e., real growth plus
inflation) in 2019-20. Deficits: Revenue deficit is targeted at 2.3% of GDP. Fiscal deficit is targeted at
3.3% of GDP. Ministry allocations: Among the top 13 ministries with the highest allocations, the highest
percentage increase is observed in the Ministry of Agriculture and Farmers‘ Welfare (82.9%), followed by
Ministry of Petroleum and Natural Gas (32.1%) and Ministry of Railways (23.4%).
Surcharge on income tax: Currently, a surcharge of 15% is levied on the income of individuals earning
over one crore rupees, and 10% on income of individuals earning between Rs 50 lakh and one crore
rupees. In the Union Budget 2019-20, the surcharge on income tax for individuals earning between two
crore rupees and five crore rupees has been increased to 25% and for persons earning over five crore
rupees has been increased to 37%.
Corporation tax: Currently, companies with annual turnover of less than Rs 250 crore pay corporate
income tax at the rate of 25%. This threshold has been increased to Rs 400 crore.
Tax on cash withdrawals: A TDS of 2% will be levied by financial companies and post offices on individuals
for cash withdrawals exceeding one crore rupees in a year from a bank account.
Tax exemption for affordable housing: An additional tax deduction of up to Rs 1,50,000 will be provided
on interest paid on loans for self-occupied house owners. The conditions for availing this deduction are:
(i) the loan must be sanctioned in FY 2019-20, (ii) the stamp duty on the house should not exceed Rs 45
lakh rupees, and (iii) the individual should not own another residential house property as of the date of
the home loan. Tax exemptions for electric vehicles: A tax deduction of up to Rs 1,50,000 will be
provided on interest paid on loans to purchase an electric vehicle. This deduction will be applicable for
loans sanctioned between FY 2019-20 and FY 2022-23.
Banking and Finance: The government plans to partially guarantee (for first 10% of loss) Public Sector
Banks for funds provided in a pooled manner to NBFCs.
Government borrowings: Currently, the gross borrowing programme of the government is funded entirely
through domestic borrowings. The government plans to raise a part of its borrowings abroad in foreign
currency.
Industry: The minimum public shareholding in listed companies will be increased from 25% to 35%. A
new electronic fund raising platform will be created for listing social enterprises and voluntary
organisations. The present policy of 51% stake of government in non-financial PSUs will be modified to
include stake of government controlled institutions.
Investments: 100% Foreign Direct Investment (FDI) will be permitted for insurance intermediaries. Local
sourcing norms will be eased for FDI in the single brand retail sector. Further, relaxing of the FDI norms
in aviation, media and insurance sectors will be examined. Statutory limit for Foreign Portfolio
Investment will be increased from the current 24% to sectorial limits. Foreign shareholding limits in PSUs
will be increased to the maximum permissible sectorial limit.
Agriculture and allied activities: Pradhan Mantri Matsya Sampada Yojana has been proposed to address
infrastructure gaps in the fisheries sector. 10,000 new Farmer Producer Organisations will be setup over
the next five years. The central government will work towards adoption of zerobudget farming.
Rural Development: Under the Pradhan Mantri Gram Sadak Yojana, 1.25 lakh km of road will be
upgraded at an estimated cost of Rs 80,250 crore in the next five years. 100 new clusters will be setup
under the Scheme of Fund for Upgradation and Regeneration of Traditional Industries (SFURTI). All rural
households will be provided with piped water supply by 2024 under the Jal Jeevan Mission. Swachh
Bharat Mission will be expanded to undertake solid waste management in every village.
Social Justice: An overdraft of Rs 5,000 will be provided to women self-help group (SHG) members who
hold Jan-Dhan accounts. Further, a loan up to one lakh rupees will be provided under the MUDRA scheme
to one woman in every SHG.
Social Security: A new pension benefit scheme, namely Pradhan Mantri Karam Yogi Maandhan Scheme,
has been announced for traders and small shopkeepers with annual turnover of less than Rs 1.5 crore.
Education: The new National Education Policy will be introduced. The National Research Foundation will
be setup to promote funding and coordinate research in the country. A Study in India programme will be
launched to encourage foreign students in higher education.
Budget Allocation at a Glance: Rs. 60,000 crores MGNREGA (Under PM Gram Sadak Yojana) , Rs. 75,000
crores PM Kisaan Samman,Rs. 25,853 crores Pradhan Mantri Awas Yojana (rural + urban) Rs. 19,000
crores Pradhan Mantri Gram Sadak Yojana Rs. 14,000 crores Pradhan Mantri Fasal Bima Yojana Rs.
13,750 crores AMRUT and Smart Cities Mission ,Green Revolution Rs. 11,000 crores Mid-Day Meal
Programme Rs. 10,001 crores, National Rural Drinking Water Mission Rs. 9,774 crores ,Pradhan Mantri
Krishi Sinchai Yojana Rs. 70,000 crores Public Sector Banks.
Schemes Launched By Union and State Governments
1. The committee have to submit its 1st report within 15 days to the GST Council Secretariat.
Insurance Regulatory & Development Authority of India (IRDAI) has set up a 13-member committee
under IRDAI Executive Director Suresh Mathur .
2. ETMONEY India‘s largest app for financial services has integrated with Unified Payment Interface
as a payment method.
3. The Nandan Nilekani committee has suggested a host of measures, including elimination of
charges, round-the-clock RTGS and NEFT facility.
4. The Reserve Bank of India constituted a sixmember committee to review the ATM interchange fee
structure with a ―view to increase the ATM deployment in the unbanked areas‖.
5. NSE Clearing Ltd. will head the panel set up by SEBI to review margins on derivatives. A Standing
Group of Secretaries (GoS) has been constituted on e-Commerce by Ministry of Commerce and
Industry.
LATEST COMMITTEES IN NEWS
S.NO. Purpose for which Committee is formed Headed by
1 Panel on Economic Capital Framework (ECF), formed by RBI has Bimal Jalan
finalised its report on surplus RBI reserves
2 Inter-Ministerial Committee‖ on legality of cryptocurrencies and Secretary Subhash
blockchain Chandra Garg
3 To review margins on derivatives the panel will submit its NSE Clearing Ltd
recommendations to the Secondary Market Advisory Committee
4 Beekeeping Development Committee Bibek Debroy
5 Committee give recommendations for MSME sector U.K. Sinha
6 RBI‘s to review the regulatory and supervisory framework for Core Tapan Ray
Investment Companies
7 IRDAI has set up committee to review the regulatory framework on IRDAI Executive Director
microinsurance & recommend measures to increase the demand for Suresh Mathur
such products
8 To strengthen digital payments as well as to boost financial inclusion Nandan Nilekani
through Financial Technology
9 Determining the Methodology for Fixation of the National Minimum Anoop Satpathy
Wage‖
10 CBDT formed a 4-member committee to look into the matter of Sanjeev Sharma
taxation related pain points and submit its final report and
recommendations by mid-March
11 To review the ATM interchange fee structure with a ―view to V G Kannan
increase the ATM deployment in the unbanked areas
12 Chief Ministers for transforming Indian agriculture and raising Maharshtra CM Devendra
farmers‘ income Fadnavis
IMF cuts World and India growth rates The World Bank-International Monetary Fund (IMF) annual
meetings kicked off on a somber note, with the IMF downgrading global growth in 2019 to 3%, the slowest
since the global financial crisis. India‘s growth projections have also been downgraded to 6.1% and 7.0%
in 2019 and 2020 respectively. The IMF projected the U.S. would grow at 2.4% and 2.1% in 2019 and 2020
respectively. For China, growth was projected to grow at 6.1% and 5.8% in 2019 and 2020.
NITI Aayog launches India Innovation Index 2019 - NITI Aayog with Institute for Competitiveness as the
knowledge partner released the India Innovation Index (III) 2019. Karnataka is the most innovative major
state in India. Tamil Nadu, Maharashtra, Telangana, Haryana, Kerala, Uttar Pradesh, West Bengal,
Gujarat, and Andhra Pradesh form the remaining top ten major states respectively. Sikkim and Delhi
take the top spots among the northeastern & hill states, and union territories/citystates/small states
respectively. Delhi, Karnataka, Maharashtra, Tamil Nadu, Telangana, and Uttar Pradesh are the most
efficient states in translating inputs into output.
WEF‘s Global Competitiveness Index World Economic Forum has released the Global Competitiveness
Index report. In total, there are 103 indicators distributed across the 12 pillars on which the performance
of the countries was evaluated. As per the WEF‘s released report, India has moved down 10 places to
rank 68th on an annual global competitiveness index which was topped by Singapore. Here is the
detailed ranking of India in individual pillars across which the performance of the countries was
evaluated:
World Bank‘s Ease of Doing Business Ranking - World Bank has released Ease of Doing business
Rankings which includes 190 countries. As per the rankings, India has jumped 14 places and has been
ranked at 63rd among 190 countries. New Zealand and Somalia retained their 1st and 190th spot
respectively. From 2020, the World Bank has expanded its ease of doing business survey to 2 more
cities: Bengaluru and Kolkata in addition to Delhi and Mumbai that are currently surveyed. The World
Bank has decided to have four cities from every country with a population above 100 million.
Union Cabinet approves extension of PM-KISAN scheme - Govt has approved the extension of Pradhan
Mantri Kisan Samman Nidhi (PM-KISAN) to all the farmers in the country. Earlier the benefit of the
scheme was applicable to farmers having two hectares of land.  Nearly 14 crores 50 lakh farmers will be
now covered under the revised scheme.  Total burden on the exchequer will be over 87,000 crore
rupees for the year 2019-20.  Over three crore farmers have been benefited so far.  Six thousand
rupees per year is being given in three installments to the farmers, under the scheme. Centre also
approved the Pradhan Mantri Kisan Pension Yojana under which small and marginal farmers will get a
minimum fixed pension of 3,000 rupees per month on attaining the age of 60 years. Pradhan Mantri Kisan
Pension Yojana scheme aims to initially cover 5 crore farmers in the first 3 years.  PM-KISAN scheme was
launched in Uttar Pradesh‘s Gorakhpur on 24th February 2019 by transferring the first installment of
2,000 each to over one crore farmers.
Deposits in Jan Dhan Yojana accounts crosses Rs 1 lakh crore
Deposits in bank accounts opened under Jan Dhan scheme have crossed the Rs 1 lakh crore mark. As
per the latest finance ministry data, the total balance in over 36.06 crore Pradhan Mantri Jan Dhan
Yojana accounts was at Rs 1,00,495.94 crore as on 03rd July 2019. The PMJDY was launched on 28th
August 2014, with an aim to provide universal access to banking facilities to the people in the country.
RBI board finalizes UTKARSH 2022- RBI board has finalized a three year roadmap to improve regulation
and supervision, among other functions of the central bank. This medium term strategy named UTKARSH
2022, is in line with the global central banks‘ plan to strengthen the regulatory and supervisory
mechanism. Worldwide, all central banks strengthen the regulatory and supervisory mechanism,
everybody is formulating a long-term plan and a medium-term plan.
India slips to 7th largest economy in 2018 - According to the World Bank, India has been pushed to the
7th place in the global GDP rankings in 2018. In 2017, India had emerged as the 6th largest economy.
The US remains the top economy with a GDP of $20.5 trillion in 2018. China was the 2nd largest economy
with $13.6 trillion, while Japan took the 3rd place with $5 trillion. India‘s GDP was at $2.7 trillion in
2018, while UK and France were at $2.8 trillion. India still remains the fastest-growing major economy in
the world.
Key banking sector news
RBI introduced a new semi-closed prepaid payment instrument (PPI) which can be used for transaction
of goods and services up to a limit of Rs 10,000.
ICRA said that the asset quality for the banking sector continues to improve with declining slippages
and expected improvements in recoveries during FY20. Decline in NPAs will improve solvency profile of
Banks.
As per RBI report, in the coming years the financial health of PSBs should increasingly be assessed by
their ability to access capital markets instead of depending excessively on the government.
RBI has red-flagged banks’ reliance of retail loans over slowing economic activity and negative
consumer sentiment.
According to latest RBI report, cancellation of NBFC registrations skyrocketed by more than eight folds
in 2018-19, compared to the previous year. 169 and 224 NBFC registrations were cancelled in FY17 and
FY18 respectively, which suddenly surged to 1,851 cancellations in FY19.
Top banks that use collateralised borrowing and lending obligation (CBLO) instruments have reached
out to their tax advisers, seeking clarity on whether they could face problems under the goods and
services tax regime.
Banks reported a total fraud of ₹71,543 crore in FY19, a 74% increase as against ₹41,167 crore in
FY18. PSBs accounted for 55.4% of the number of cases and 90.2% of the amount involved.
Major banking sector developments
State Bank of India : SBI Chairman Rajnish Kumar said that banks cannot go beyond a threshold to
bring down interest rates on deposits as India lacks social security schemes and likewise cannot lend at
lower rates to corporates as the risk of default is too high. SBI Chairman nudged the industry to enrich
their borrowing capacity so as to boost investment in the economy, asserting there is no dearth of funds
and most of the banks will be in a better position by March-end. According to RBI report, SBI tops in
highest no.of complaints comprising nearly half of the total complaints received against 18 PSU banks.
PNB and BOB followed SBI in terms of such complaints.
Punjab National Bank : PNB had issued and allotted Rs. 1,500 crore Tier - II Basel III compliant capital
bonds at a coupon of 8.15% per annum on private placement basis. According to the copy of complaint
posted on CBI website, PNB alleges that Jagadish Khattar founder of Carnation Auto India Pvt Ltd of
Rs.110 cr has cheated bank in Jul’19. IDBI Bank expected to come out of the PCA framework in the last
quarter of the current fiscal with the support of capital infusion and recovery from large IBC cases.
Department of Financial Service conveyed the sanction for release of the fresh capital infusion fund of
Rs 2,153 crore to Allahabad Bank. According to media report Syndicate Bank has received credit rating
revision from CRISIL as AA rating for perpetual Tier I bond (Rs.777Cr) and lower Tier II Bonds under BASEL
II (Rs.2225 cr).
ICICI Bank : India’s biggest food delivery app Swiggy Launches their Own Wallet powered by ICICI Bank.
YES Bank : Hinduja Group flagship firm Ashok Leyland said that it has inked a pact with Yes bank for
vehicle finance for a period of 2 years. According to RBI media report, business of Payment Banks (PB)
continues to hover around. Despite an improvement in net interest income and non-interest income PBs
aggregate losses increased to 21% to Rs.626.8 Cr in FY19.
Banking Current Affairs-
Rajnish Kumar, Chairman of SBI has been elected as- Chairman of Indian Banks’ Association (IBA) • •
Kolkata-born Abhijit Banarjee, his wife Esther Duflo and Michael Kremer of Harward University have won
the Prize for their experimental approach to alleviating Global Poverty- Noble Economics Prize. Rating
Agency according to which, “Indian Banks are the Most Vulnerable in AsiaPacific” because they have
lower capital ratios and their capital will be wiped out under stress scenario- Moody’s. • Bank which has
launched Digital Fixed Deposit Product and can be opened in three minutes without opening a savings
account – AXIS Bank • Bank which got RBI approval for raising the Authorised Capital from Rs.800 Crore to
Rs.1100 Crore.-Yes Bank. • Bank which has opened its Melbourne Office becoming the First Indian Bank to
have a branch in the Australian State of Victoria- SBI. • Eminent Economist has been appointed as
Executive Director for India on the Board of International Monetary Fund (IMF)- Surjit S Bhalla. • Banks
which have also been included as members by the Credit Guarantee Fund Trust by which they may avail
the guarantee cover for loans given to MSMEs- Scheduled Urban Co-operatives Banks. • Bank Fraud case
in which Sarang Wadhawan and Rakesh Wadhawan, Promoters of Housing Development Infrastructure
Limited, have been arrested by the policePMC Bank Fraud Case. • Growth Forecast which has been
sharply reduced from earlier 7.4% to 6.1% by RBI- India’s GDP Growth Forecast. India jumped two levels
to 7th Position from the 9th last year inBrand Finance Nation Ranking 2019. • RBI has given nod to Kerala
State Government to set up its own bank by merging district cooperative banks – Kerala Bank. •
• In past 10 years, DICGC has settled 427 claims of Co-operative Banks but they have settled the claim of
– Only One Commercial Bank. •Regulator which has banned the use of Direct Selling Agents (DSAs) to
source retail loans and carry out physical verification of documents of borrowers- RBI. • India moves up
14 ranks to 63rd Ranking in- Ease of Doing Business 2020 Survey. • Bureau which has recommended the
name of Challa Sreenivasulu as MD at SBI- Banks Board Bureau. • A Joint Venture between the BSE and
USbased Insurance Exchange EBIX has received In-principle Approval from IRDAI to act as- Direct
Insurance Broker. •Persons who will now be eligible to apply for the National Pension System at par with
NRIs- Overseas Citizens of India.
The finance service company, Ujjivan Small Finance Bank (SFB) has launched an instant digital savings
account (SA) along with Fixed Deposit (FD) and Privilege Savings Account to offer distinctive banking and
digital services to its customers. The amalgamation of Vijaya Bank and Dena Bank into the BoB has come
into effect and merged entity would also receive Rs 5,042 crore fund infusion from the government. SBI
Card announced the launch of ‗SBI Card Pay‘, a feature which allows contactless payment using mobile
phones at PoS terminals. Vreedhi Financial Services has secured a nonbanking finance company licence
from the Reserve Bank of India to provide credit and other services to micro-enterprises operating in tier
II-III cities and small towns. RBI has imposed a penalty of Rs 35 lakh on Tamilnad Mercantile Bank for
violating norms on fraud classification and notification. RBI set the average base rate to be charged from
borrowers by non-banking financial companies (NBFCs) and micro-finance institutions (MFIs) at 9.21% for
the first quarter of the next fiscal (AprilJune). Kotak Mahindra Bank will charge customers for UPI
transactions starting 1st May 2019. For each Kotak Bank account, the first 30 UPI fund transfers will be
free, after which a charge will be levied on all fund transfers from the bank account. RBI has tweaked
Liquidity Coverage Ratio (LCR) norms to provide an additional 2% window to lenders. Karnataka Bank
entered into an MoU with Bharti AXA Life Insurance Company to distribute the latter‘s life insurance
products. Lakshmi Vilas Bank approved the merger of the private sector lender with Indiabulls Housing
Finance (IBH) through a share swap deal. The RBI came out with guidelines for banks to set up new
currency chests, which include a minimum area of 1,500 square feet for strong room. The new chests
should have a processing a capacity of 6.6 lakh pieces of banknotes per day. The currency chests should
have CBL of Rs 1,000 crore, subject to ground realities and reasonable restrictions, at the discretion of
the Reserve Bank. Emirates Islamic has announced the launch of Chat Banking services for customers via
WhatsApp, marking a global first in the Islamic banking sector. The bank‘s customers will now able to
conduct daily banking activities via WhatsApp in a seamless and hassle-free manner.
RBL Bank has partnered with credit profiler CreditVidya to improve the lender‘s customer experience.
Through this partnership, the private sector lender will be able to gain significant insights into its
customer base. The Institute for Development and Research in Banking Technology (IDRBT), an arm of
RBI, has launched a 5G Use Cases Lab for banking and financial sector. The 5G technology, along with
blockchain, will be progressively adopted by banks. IDBI Bank has launched ‗NRI-Insta-Online‘ account
opening process for NRIs residing in the Financial Action Task Force (FATF) member countries. The
person will not be required to furnish physical documents as well as KYC proofs for opening an account
with the bank. IDBI Bank will introduce two Repo Linked Products Suvidha Plus Home Loan and Suvidha
Plus Auto Loan. The Cabinet has approved a capital infusion of Rs 4,557 crore into IDBI Bank. ECL
Finance Ltd, a subsidiary of Edelweiss Financial Services, and Central Bank of India have signed an
agreement for priority sector lending to (MSME's) customers. The State Bank of India opened its
Melbourne office and becoming the first Indian bank to have a branch in the Australian state of Victoria.
UCO Bank has launched 3 new digital products called, UCash, Digilocker and an app in Kolkata, West
Bengal. Axis Bank has launched the ‗Express FD‘, a digital fixed deposit product that allows a customer
to open an FD account in 3 minutes through the digital mode without opening a savings account with the
bank. Standard Chartered Bank, a British multinational banking and financial services company has
launched a DigiSmart credit card. Finance Minister Nirmala Sitharaman has announced that Public Sector
Banks will organise ‗loan melas‘ or ―Shamiana meetings‖ in 400 districts. Airtel Payments Bank launched
―Bharosa savings account‖ services, designed for deepening the financial inclusion in the country.
10. ONE LINER QUESTIONS-ANSWER ON RBI POLICIES (01.01.2019 to
31.12.2019)
1. As per the Fourth Bi-monthly Monetary Policy statement 2019-20 and w.e.f. 4th Oct. 2019 Reserve
Bank of India has changed the Bank Rate from 5.65% to ______: 5.40%
2. As per the Fourth Bi-monthly Monetary Policy statement 2019-20, Reserve Bank of India has changed
the Repo Rate from 5.40% to ______ w.e.f. 4th Oct. 2019: 5.15%
the Reverse Repo Rate from 5.15% to ______ w.e.f. 4th Oct. 2019: 4.90%
the Marginal Standing Facility from 5.65% to ______ w.e.f. 4th Oct. 2019: 5.40%
5. Reserve Bank of India has changed the Statutory Liquidity Ratio (SLR) 18.75% to ______ w.e.f. 12th
Oct. 2019: 18.50%
6. As per RBI policy, the loan accounts can be taken over by banks from other banks: After obtaining
credit information from the transferor bank
7. With effect from Jan 05, 2019, Statutory Liquidity Ratio shall be cut by ___ basis points every
quarter? 25 basis points
8. Statutory liquidity ratio shall be cut in stages on quarterly basis to bring it to ___% of net demand and
time liabilities by 11.04.2020? 18.00%
9. Average base rate of 5 largest commercial banks to be used by NBFC-Micro Finance Institutions for
Jan-Mar 2019 quarter is? 9.15%
10. RBI has fixed the limit on stock of External Commercial Borrowing at ___ % of GDP at current market
prices? 6.5%
11. Based on GDP fitures as on 31.03.18, what is the limit on stock ECB fixed for the current financial
year 2018-19? a USD 160 billion
12. Expert Committee appointed by RBI for Economic Capital Framework for RBI is headed by: Dr. Bimal
Jalan
13.As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an individual resident can
borrow up to _____ from relative outside India? USD 250000
14. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an Indian student studying
abroad can borrow up to _____ to meet fee and expenses. USD 250000
15. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an AD in India holding
VOSTRO account of a foreign bank, can allow OD up to Rs.___: Rs.500 cr
16. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an importer in India can
raise trade credit for import up to ____ per transaction: USD 50 million
17. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an Indian import can raise
trade credit with a minimum average maturity of ___ for non-capital goods? 1 year
18. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an Indian import can raise
trade credit with a minimum average maturity of ___ for capital goods? 3 years
19. As per RBI directions (Jan 2019) for MSME restructuring loans of GST-registered MSMEs can be
restructured for total exposure up to? Rs.25 cr
restructured. On restructure of such loan, the asset classification shall be: will not be downgraded
restructured. Such restructuring should be implemented by: 31.03.20
restructured. For such accounts, what is additional provision, which banks have to make? 5%
23. As per revision in DAY-NRLM scheme, the min no. of members in a group enterprise, for the purpose
of financing can be: 3
24. As per RBI guidelines, the Loan System of Credit Delivery w.e.f. 1.4.19 is applicable for corporate
borrowers availing fund based working capital of ___ from banking system? Rs.1500 millon
25. As per RBI guidelines on Loan System of Credit Delivery, the working capital loan components should
be ___ of availed working capital limit, to start with? 40%
26. As per RBI guidelines on Loan System of Credit Delivery, what is min repayment period of working
capital loan? 7 days
27. All transactions, involving payment of interest on rupee deposits shall be rounded off to ___ nearest
Re.1
28. 02 All transactions, involving payment of interest on FCNR-B deposits shall be rounded off to ___
decimal places : two
29. A term deposit is maturing on Sunday, a non-business working day. Bank makes payment on Monday, a
working day. Interest shall be paid: up to Monday
30. Generally interest on current account balances cannot be paid. But it can be paid in accounts in the
name of: deceased customers
31. In case of saving bank account, differential rates of interest may be provided for any end-of-day
balance : exceeding Rs.1 lac
32. Interest on domestic rupee savings deposits shall be calculated on : on daily product basis
33. The term Bulk Deposit means single Rupee term deposits of : Rs.2 cr and above
34. Banks can offer term deposits without premature withdrawal option for term deposits accepted from
individuals (held singly or jointly) for : above Rs.15 lac
35. In case of term deposits, differential interest rate shall be offered only on : bulk deposits b deposit
of Rs.15 lac and above c deposit of Rs.100 lac or above d deposits of less than Rs.2 cr
36. Interest on savings deposit shall be credited at ____ intervals. quarterly or shorter
37. Banks can pay interest on the minimum credit balance in the composite cash credit (KCC) account of
a farmer during the period ____ :from 10th to last day of each calendar month
38. What penalty can be recovered by banks for pre-mature withdrawal of term deposits by customers?
bank discretion if penality is brought to customer notice before acceptance of deposit
39. Banks can not open saving bank account and pay interest in the name of which of the following? a KVI
Boards b No profit no loss companies as per permitted by Central Govt. c Agriculture produce
marketing committee d all types of SHG
40. Crop loan upto an amount of Rs.___ can be allowed without any collateral security as per RBI
direction of February 2019: a Rs.1 lac b Rs.1.60 lac c Rs.2.20 lac d Rs.3 lac
41.In its monetary and credit policy review of Feb 2019, RBI decided to fix the risk weight for all
exposure to NBFCs to: as per their rating by SEBI approved rating agencies
42. KCC facility extended by RBI during Feb 2019, does not cover which of the following activities? a
fisheries b poultry c dairy d none of the above
43. For interest subvention under MSME 2018 scheme, to be eligible, an MSME needs to have, which of the
following? Udyog Aadhaar number and GSTN Number
44. Under MSME Interest subvention Scheme 2018, incremental TL or WC given to MSME is eligible for an
amount up to Rs.: 100 lac
45. Under MSME Interest subvention Scheme 2018, subsidy shall be calculated as ___ of outstanding
balance from time to time, on incremental amount of WC or TL from date of notification: 2%
46. Under PM Shram Yogi Maan Dhan (PMSYM), an unorganized sector worker with monthly income up to
Rs.___ is eligible: Rs.15000
47. Under PM Shram Yogi Maan Dhan (PMSYM), an unorganized sector worker within age group of ___ is
eligible: 18 to 40
48. Under PM Shram Yogi Maan Dhan (PMSYM), an unorganized sector worker shall be able to get a
monthly pension of ____ on completion of age of 60 years. Rs.3000
49. As per NI (Amendment) Act 2018, court can direct drawer of a cheque to deposit ___ % amount of
cheque as interim compensation to holder (complainant) : 20%
50. As per NI (Amendment) Act 2018, court can direct drawer of a cheque to pay amount of
compensation, within a period of: 60 days and extended period of 30 days
51. As per NI (Amendment) Act 2018, Appelate court can direct drawer of a cheque to deposit ___ %
amount of fine or compensation if he wants to make appeal against decision of the trial court: 20%
52. As per NI (Amendment) Act 2018, court can direct the payee (complainant) to return the
compensation within ____ if drawer is not held guilty: 60 days and extended period of 30 days
53. The following routes are available for borrowers under External Commercial Borrowing? a approval
route and automatic route
54. Which of the following cannot be form of ECB for INR denominated ECB? FCCBs and FCEBs
55. Normally under ECB, the minimum average maturity period cannot be less than? 3 years
56. Manufacturing sector companies may raise ECBs with MAMP of 1 year for ECB up to ____ million or its
equivalent per financial year. :USD 50 million
57. All-in-cost ceiling for ECB is prescribed by RBI at: Benchmark + 4.5%
58. Prepayment charge/ penal interest for default or breach of covenants under ECB should not be more
than ____ over and above the contracted rate of interest on the outstanding principal amount and
will be outside the all-in-cost ceiling. : 2%
59. Infrastructure space companies are required to mandatorily hedge ____ of their ECB exposure in case
average maturity of ECB is less than 5 years. :70%
60. Under the ECB framework, all eligible borrowers can raise ECB up to ___ million or equivalent per
financial year under auto route. : USD 750 million
61. Under the ECB framework, govt. recognized startup borrowers can raise ECB up to ____ million or
equivalent per financial year under auto route.: USD 3 million
62. To secure borrowing under ECB, which of the type of security can be allowed by banks? charge on
immovable or immovable property or financial securities
63. To raise funds under automatic route of ECB, which of the following is required? loan registration
number from RBI
64. Public Sector Oil Marketing Companies (OMCs) can raise ECB for working capital purposes with
minimum average maturity period of 3 years under the automatic route without mandatory hedging
and individual limit requirements up to ____ or equivalent. USD 10000 million
65. Under Insolvency and Bankruptcy Code 2016 (IBC2016), insolvency is failure of a company or LLP to
pay due amount of ____ or above : 1 lac
66. Under Insolvency and Bankruptcy Code 2016 (IBC2016), insolvency is failure of individuals or
partnership to pay due amount of ____ or above. : Rs.1000
67. Insolvency and Bankruptcy Code 2016 (IBC-2016), for corporates, the involvency process can be
initiated at: shareholders or employees
68.Which of the following is not part of pillars of Insolvency and Bankruptcy Code 2016 (IBC2016)?
Insolvency Resolution Professionals
69. Under Insolvency and Bankruptcy Code 2016 (IBC2016), who prepares the insolvency resolution plan? a
insolvency resolution professionals
70. Under Insolvency and Bankruptcy Code 2016 (IBC2016), an insolvency resolution plan is required to be
approved by ___ of creditors by vote (voting rights) : 66%
71. Under Insolvency and Bankruptcy Code 2016 (IBC2016), National Company Law Tribunal can decide
admission of a case with a period of ___: 14 days
72. Under Insolvency and Bankruptcy Code 2016 (IBC2016), insolvency resolution professional is required
to place the resolution plan before creditors within : 180 days
73. Under Insolvency and Bankruptcy Code 2016 (IBC2016), if a resolution plan is not approved by
financial creditor within stipulated period, time period can be extended by National Company Law
Tribunal by: 90 days
74.Under Insolvency and Bankruptcy Code 2016 (IBC2016), a corporate debtor may be put into
liquidation if (which one is correct, out of the following): a a 66% majority of the creditor’s
committee decides to liquidate the corporate debtor; b creditor’s committee does not approve a
resolution plan within 180 days (or within the extended 90 days); c debtor contravenes the agreed
resolution plan and an affected person makes an application to the NCLT to liquidate the corporate
debtor. d all the above
75. Kissan Credit Card can be issued to: a owner cultivator farmers and tenant farmers b SHG or JLG of
farmers c Animal husbandry farmers and fisheries d all the above
76. Kissan Credit Card limit is sanctioned for a period of 5 years. 1st year limit is sanctioned as: c (area
under cultivation x scale of finance) + 30%
77. Kissan Credit Card limit for 3rd is sanctioned by adding __ being escalation cost: 10% + 2nd year
limit
78. The long term loan limit under KCC should be sanctioned taking into account the investment such as
land development, minor irrigation, farm equipment etc. for a period up to : 5 years
79. Under KCC scheme, the marginal farmer can be sanctioned a flexible limit of: Rs.10000 to Rs.50000
80. For KCC, which of the following statement is not correctly stated? a validity period can be
determined by bank b periodic review period can be determined by bank c rate of interest can be
determined by bank d none of the above
81.What is the normal repayment period of long term loan under KCC ? 5 years
82. The margin requirement is not applicable on KCC for an amount up to? Rs.1.60 lac
83. The collateral security requirement is waived on KCC for an amount up to? Rs.1.60 lac
84. In KCC, if there is recovery tieup, banks can consider waiver of collateral security for a loan up to
Rs:. Rs.3 lac
85. Cost of cultivation for wheat is Rs.15000 per acre. What shall be KCC limit for 2nd year? Rs.21450
Lead Bank Scheme
86.Which of the following is not part of Lead Bank Scheme fora? National Level Banks committee
87. Meetings of Block Level Bankers’ Committee (BLBC) are held on ___ basis, under Lead Bank Scheme?
quarterly
88. Who is chairs the quarterly meeting of Distt. Consultative Committee under Lead Bank Scheme? a
Regional Director - RBI b General Manager-NABADRD c Distt. Collector d Regional Manager of SLBC
Convenor Bank
89. The Lead Distt. Manager under Lead Bank Scheme is required to convene ___ public meeting at
various locations in the district. :half yearly
90. The Distt. Level Review Committee (DLRC) meeting should be held ___ under Lead Bank Scheme?
quarterly
91. State Level Bankers’ Committee is chaired by? CMD or ED of SLBC Convenor Bank
92. State Level Bankers’ Committee meetings are held on ___ basis? quarterly
93. All District Credit Plans under Lead Bank Scheme are required to launched by ____ every year, after
these are aggregated in State level plans? 1 st April
94. Under Lead Bank Scheme, there are various reporting statements. The format of which of these does
match? Annual Credit Plan (ACP) : LBSMIS-1
95. Under Lead Bank Scheme, bank branches in Rural and Semi-urban places are required to achieve a
credit deposit ratio of ___, separately on all India basis. :60%
96. No Due Certificate from the individual borrowers (including SHGs & JLGs) in rural and semiurban
areas for all types of loans including loans under Government Sponsored Schemes, irrespective of the
amount involved is not to be taken one amount of loan is up to: not to be taken irrespective of
amount of loan
97. The preparation of potential linked plan for next year, is to be completed under Lead Bank Scheme
by: August
98. To be eligible to avail loan and capital subsidy under PM Awas Yojna for MIG-1, what is the annual
household income ceiling? Rs.12 lac
99. To be eligible to avail loan and capital subsidy under PM Awas Yojna for MIG-2, what is the annual
household income ceiling? Rs.18 lac
100. Rate of interest subsidy under PM Awas Yojna for MIG housing is ___ per annum: 4% for MIG-1 and
3% for MIG2
101. Eligible loan amount for interest subsidy under MIG under PM Awas Yojna is: Rs.9 lac for MIG-1
and Rs.12 lac for MIG-2
102. Dwelling unit carpet area to be eligible for interest subsidy under MIG under PM Awas Yojna is:
160 sq meters for MIG-1 and 200 sq meters for MIG-2
103. Who can invest in Sovereign Gold Bond Scheme (SGB) 2019-20Series I/II/III/IV? a Individuals only b
HUF only c Trust only d all
104. What is denomination of Sovereign Gold Bond Scheme (SGB) 201920- Series I/II/III/IV? One gram
of gold or multiple
105. The issue price of gold bonds under Sovereign Gold Bond Scheme (SGB) 2019-20- Series I/II/III/IV,
is Rs. ___ per gram, less than nominal value? Rs.50
106. What is rate of interest on gold bonds under Sovereign Gold Bond Scheme (SGB) 2019-20- Series I/
II/III/IV? 2.5%
107. What is redemption period of gold bonds under Sovereign Gold Bond Scheme (SGB) 2019-20- Series
I/ II/III/IV? 8 years
108. What is max limit of subscription per individual, to gold bonds under Sovereign Gold Bond Scheme
(SGB) 2019-20- Series I/II/III/ IV? 4 kg per financial year
109. What has been added to list of official valid documents (OVD) under RBI KYC Directions 2019?
Aadhaar
110. Under RTGS, what is the initial cut-off period i.e. period for customer transactions? 7 am to 6 pm
111. Time varying charges under RTGS per outward transaction, in addition to flat processing charges,
after 6 pm, are? Rs.10 BUT NOW WAIVED.
112. Large modern currency chest can recover commission of ___ per packet of 100 pieces, from non-
currency chest bank branches Rs.8
113. As per Union Govt. final Budget for 2019-20, interest on home loan for 1st time buyer to purchase
house valued up to Rs.45 lac, will get total tax deduction up to:Rs.3.50 lac
114. As per Union Govt. final Budget for 2019-20, surcharge on income tax for individuals increased
from __ to __ with taxable income of Rs.2 cr to Rs.5 cr. 15% to 25%
115. As per Union Govt. final Budget for 2019-20, surcharge on income tax for individuals increased
from __ to __ with taxable income above Rs.5 cr. 15% to 37%
116. As per Union Govt. final Budget for 2019-20, individuals and HUFs to deduct 5% tax at source on
payments made to resident contractors and professionals where aggregate payments exceed Rs.__
during a financial year? Rs.50 lac
117. As per Union Govt. final Budget for 2019-20, filing of income tax return is mandatory if amount
spent on foreign travel exceeds Rs.___ or annual electricity bill exceed Rs.___ or the balance in their
current account with a bank is more than Rs.___ Rs.2 lac or Rs.1 lac or Rs.1 cr respectively.
118. As per Union Govt. final Budget for 2019-20, entire lumpsum withdrawal from National Pension
Scheme which is limited to ___ of accumulated amount, shall be exempted from tax as against 40%
presently. 60%
119. As per Union Govt. final Budget for 2019-20, a listed company which wants to buy back its shares,
has to pay ___ tax on buy back. 20%
120. As per Union Govt. final Budget for 2019-20, corporate tax has been reduced to 25% for companies
with turnover up to Rs.___ in 2017-18? Rs.400 cr
121. As per Union Govt. final Budget for 2019-20, TDS shall be ___ on cash withdrawals exceeding Rs.1
cr duing an year from an account bank or post-office. 2%
122. As per Union Govt. final Budget for 2019-20, business with turnover exceeding Rs.___cr to provide
for electronic mode of payment without levying any charges or MDR. Rs.50 cr
123. As per Union Govt. final Budget for 2019-20, if a business with prescribed turnover fails to provide
for electronic mode of payment without levying any charges, the penalty will be ___ per day. Rs.5000
124. As per Union Govt. final Budget for 2019-20, the highest effective tax rate on an individual
including cess and surcharge shall be: 42.7%
125. As per Union Govt. final Budget for 2019-20, where PAN is required, a person can provide details
of ___ instead of PAN. Aadhaar
126. As per Union Govt. final Budget for 2019-20, the disinvestment target is Rs.___. Rs.105000 cr
127. As per Union Govt. final Budget for 2019-20, the govt. will provide additional capital to public
sector banks to the tune of Rs.___ Rs.70000 cr
128. As per Union Govt. final Budget for 2019-20, a life line of Rs.___ has been provided by Govt. to
ease shortage of credit to fundamentally sound NBFCs by promising to bear the first loss of up to 10%
of assets purchased by PSBs from NBFCs, for 6 months? Rs.100000 cr
129. As per Union Govt. final Budget for 2019-20, under National Pension Scheme, the contribution for
all central govt. employees has been enhanced from existing 10% to ___ of basic pay? 14%
130. As per Union Govt. final Budget for 2019-20, on interest on loan taken for purchase of electric
vehicle, interest up to Rs.___ will get additional income tax deduction? Rs.
131. As per Union Govt. final Budget for 2019-20, companies with large promoter stake can have max
__% of share capital compared to 75% previously? 65%
132. As per Union Govt. final Budget for 2019-20, which authority shall be new regulator in case of
housing finance companies? RBI
133. As per Union Govt. final Budget for 2019-20, what can be the level of foreign direct investment in
insurance intermediaries? 100%
134. As per Union Govt. final Budget for 2019-20, govt. proposes to lower stake in non-financial public
sector undertakings below: 51%
135. As per Union Govt. final Budget for 2019-20, the standup India scheme has been extended up to
the year: 2025
136. An interest rate option contracts that can be exercised only on the expiration date. European
option
137. Interest rate derivative contract that involves exchange of interest payments on a notional
principal amount, on a future date, at agreed rates, for a defined forward period. Forward rate
agreement
138. A financial derivative contract whose value is derived from one or more interest rates, prices of
interest rate instruments, or interest rate indices. interest rate derivative
139. A standardized interest rate derivative contracts traded on a recognized stock exchange to buy or
sell a notional security or any other interest-bearing instrument or an index of such instruments or
interest rates at a specified future date, at a price determined at the time of the contract. interest
rate futures
140. An option contract whose value is based on Rupee interest rates or interest rate instruments.
Interest rate option
141. A series of interest rate call options (called caplets) in which the buyer of the option receives a
payment at the end of each period when the underlying interest rate is above a rate agreed in
advance (strike rate) c interest rate cap
142. A series of interest rate put options in which the buyer of the option receives a payment at the
end of each period when the underlying interest rate is below the strike rate. interest rate floor
143. A derivative contract where a market participant simultaneously purchases an interest rate cap
and sells an interest rate floor on the same interest rate for the same maturity and notional principal
amount. interest rate collar
144. A derivative contract which involves simultaneous purchase of an interest rate floor and sale of an
interest rate cap on the same interest rate for the same maturity and notional principal amount.
reverse interest rate collar
145. A derivative contract that involves exchange of a stream of agreed interest payments on a
‘notional principal’ amount during a specified period. interest rate swap
146. An option on interest rate swaps. A swaption gives the buyer the right, but not the obligation, to
enter into an interest rate swap. interest rate swaption
147. A financial derivative contract whose value, in absolute terms, changes more than proportionately
to the change in the underlying risk :leveraged derivative
148. Interest rate futures based on any Rupee denominated money market interest rate or money
market instrument. Money market futures
149. A financial derivative contract that gives the buyer the right, but not the obligation, to either buy
(call option) or sell (put option) an asset at a pre-determined price (known as the strike price) by a
specified date (known as the expiration date). Option
150. An interest rate swap based on the Overnight Mumbai Interbank Outright Rate (MIBOR) benchmark
published by Financial Benchmarks India Pvt. Ltd (FBIL). overnight indexed swaps
151. A financial derivative contract which is a combination of cash and/or generic derivative
instrument. structured derivative
152. As per RBI directions, the operating hours of RTGS wef 26.08.19 for customer transactions are: 7
am to 6.00 pm
153. As per RBI directions, the operating hours of RTGS wef 26.08.19 for interbank transactions are: 7
am to 7.45 pm
154. As per RBI directions, bank loans for on-lending to NBFC for term lending to agriculture up to
Rs.____, per borrower, shall be classified as priority sector loans: Rs.10 lac
155. As per RBI directions, bank loans for on-lending to NBFC for lending lending to Micro and Small
enterprises up to Rs.____, per borrower, shall be classified as priority sector loans: Rs.20 lac
156. As per RBI directions, bank loans for on-lending to housing finance companies for lending for
housing to individuals up to Rs.____, per borrower, shall be classified as priority sector loans: Rs.20
lac
157. As per RBI directions, bank loans for on-lending to NBFCs can be allowed under an overall cap,
which is ____ of individual bank’s total priority sector loans? 5%
158. As per RBI directions, which of the following transactions will be included in the no. of valid
transactions allowed by banks free of charge, under ATM access policy of RBI? a currency notes not
available in ATM b transaction failed for technical reasons c invalid PIN d none of the above
159. Under interest subvention scheme for fisheries and animal husbandry farmers available for 2018-
19 and 2019-20, what is the eligible loan amount? Rs.2 lac
19 and 2019-20, if a farmer is availing crop loan also, what is the total eligible loan amount on
aggregated basis? Rs.3 lac
19 and 2019-20, what is the rate of subvention? 2%
19 and 2019-20, what is the rate of additional subvention for prompt payment of loan? 3%
19 and 2019-20, what is the rate of interest, which banks can charge to the borrower? 7%
164. As per RBI bi-monthly monetary policy review in August 2019, what change has been made in risk
weight on consumer credit under Regulatory Capital guidelines? reduced from 125% to 100%
165. Under Large exposure framework applicable from 1.4.19, a bank’s exposure to a single NBFC is
restricted to ___ of bank’s Tier-1 capital. 20%
166. On 21.08.19, RBI permitted processing of e-mandate on cards for recurring transactions (merchant
payment) without additional factor of authentication (AFA), for an amount of single transaction up to
Rs.__ Rs.2000
167. As per Dr. Bimal Jalan Committee recommendations accepted by RBI, RBI’s economic capital has 2
components? realized equity and revaluation balances
168. As per Dr. Bimal Jalan Committee recommendations the range of realized equity to cover credit
and operational risk should be between: 5.5% to 6.5%
169. As per Dr. Bimal Jalan Committee recommendations the range of economic capital of RBI should
be between : 20% to 24.5%
170. In case of a failed ATM transactions (a/c debited but cash not dispensed), the turn-around time
(restoration of amount) fixed by RBI w.e.f. 1.10.19, is: T + 5 days
171. The turn-around time in respect of failed e-transaction does not match in which of the following:
IMPS = T + 5 days
172. In which of the following failed e-transactions, the turn-around time is not T + 5 days : National
Automated clearing house
173. A ‘failed transaction’ is a transaction which has not been fully completed due to any reason not
attributable to the customer. This does not include, which of the following? a failure in
communication links b non-availability of cash in an ATM c time-out of sessions d all the above
174. Incremental export credit over corresponding date of the preceding year can be included in
priority sector lending classification, where the export credit to an individual borrower is up to Rs.__
? Rs.40
175. Incremental export credit over corresponding date of the preceding year can be included in
priority sector loans in case of eligible exporters. The total such amount on aggregate basis can be
upto ___ per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is
higher? 2%
176. Generally, tenure of external concurrent auditors with a bank shall not be more than ___ years on
continuous basis: 5 years
177. No concurrent auditor shall be allowed to continue with a branch/business unit for a period of
more than ___ years. :3 years
178. The system-wide average of the last 3 years achievement of priority sector targets with regard to
overall direct lending to noncorporate farmers is notified by RBI every year. The applicable system
wide average figure for computing achievement under priority sector lending for the FY 2019-20 is
___. 12.11%
179. Effect from April 1, 2019, a bank’s exposure to a single NBFC is restricted to ___ per cent of its
Tier I capital: 15%
180. Consumer credit, including personal loans but excluding credit card receivables attracts a risk
weight of ___ per cent for capital adequacy purpose? 100%
181. Agency banks are required to spread disbursal of pension over the last ___ of the month, except
for the month of March: last 4 working days
182. Agency banks are required to credit the pension for the month of March on: 1 st working day of
April
183. Bank branches are required to have structured interaction with a cross section of pensioners
serviced at the branch on quarterly basis, where the number of pensioners of all governments and
departments exceeds a fixed number, say: 100 or 200
184. Deposit Insurance and Credit Guarantee Corporation (DICGC) provide deposit insurance for which
of the following? a commercial banks b cooperative banks c small finance banks and payment banks d
ALL of the above
185. What is the max eligible amount of deposit for insurance cover as per Deposit Insurance and
Credit Guarantee Corporation (DICGC) scheme? a Rs.10000 b Rs.50000 c Rs.100000 d Any amount of
eligible deposit
186. What is the max amount of claim that shall be paid by DICGC in case of need, per customer per
bank, in same name and same capacity: Rs.100000
187. Which of the following deposit is eligible for insurance under DICGC scheme? a inter-bank deposit
b deposit of Central and State Govt. c deposit of a bank in overseas branch d none of the above
188. The premium payable on DICGC deposit insurance cover is ___ per Rs.100 per annum. 10 p
189. Deposit insurance claim is payable by DICGC, in which of the following events? a winding up of a
bank b amalgamation of a bank c reconstruction of a bank d any of the above
190. Under on-tap authoration of payment system guidelines of RBI, which of the following is eligible
to apply for authorization? a Bharat Bill Payment Operating Unit b Trade Receivables Electronic
Discounting System c White Label ATM d any of the above
191. Under on-tap authoration of payment system guidelines of RBI, what is min net worth condition of
Bhart Bill Payment Operating Unit? Rs.100 cr
192. Under on-tap authoration of payment system guidelines of RBI, what is min paid up equity capital
condition of Trade Receivables Electronic Discounting System? Rs.25 cr
193. For expanding and deepening the digital payments ecosystem, State/ UT Level Bankers
Committees (SLBCs/ UTLBCs) shall identify one district in their respective States/ UTs in consultation
with banks and stakeholders to make at least — — 100% digitally enabled, on pilot basis? one district
194. RBI has deferred to implement last tranche of 0.625% of CCB and now will be implemented as on :-
31.03.2020
195. The percentage of CCB to be maintained :- 2.5%
196. PPIs issued by authorized Non-Bank, max days to reverse the amount of un-authorized transaction into
customer’s account:- 10 days
197. The overall maximum time for resolution of complain ______ days :- 90 days
198. The customer’s liability would be _______ if contributory fraud or negligence on the part of the PPI
issuer or third party breach but reported within 3 days to the PPI issuer :- zero
199. Maximum customer’s liability if reported within 4 days to 7 days – Rs. ______ or transaction amount
whichever is lower :- 10000
200. Maximum customer’s liability if reported after 7 days –: as per board approved policy
201. Un-authorised electronic transactions (in case of banks), the customer’s liability will be Rs. __________
in case of BSBD, Rs. _______ in case of other SB accounts and Rs. _________ in case of CA/OD/CC, if the
transaction reported within 4 to 7 days:- 5000, 10000, 25000
202. ECB under automatic route upto USD _____ or equivalent per financial year:- 750 mi
203. As per RBI monetary policy dated 07.02.2019, Penal interst on shortfall in reserve requirements
depending on the duration of shortfalls is Bank Rate plus _______ % or Bank Rate plus _______ %. :- 3, 5
204. As per RBI notification dated 21.02.2019 2% interest subvention is applicable till ______:- 31.03.2020
205. Interest subvention is applicable for MSME with valid udyog Aadhar and GSTN upto a maximum financial
assistance of Rs. __________ lakh.:- 100
206. Interst subvention shall be admissible for any period during which the account remains NPA – Yes/No: No
207. Nodal office of eligible lending institutions should submit their half yearly claims to _________:- SIDBI
208. Trade Finance in the forms of Buyers’ Credit and Suppliers’ Credit to Indian Importer upto USD _______
or equivalent per import transaction for oil/gas refining marketing, airline and shipping companies. :- 150
mi
209. Trade Finance in the forms of Buyers’ Credit and Suppliers’ Credit to Indian Importer upto USD _____
or equivalent per import transaction for other companies. :- 50 mi
210. The period of Trade Finance reckoned from the date of shipment, shall be upto ________ years for
import of capital goods and _______ year or the operating cycle whichever is less for non capital goods.:- 3,
1
211. For shipyards / ship builders the period of TC for import of non capital goods can be upto _____year. :-
3 years
212. All in cost ceiling for TC should be benchmark rate plus ________ bps spread. :- 250
213. R-Return on fortnightly basis to be reported under ____________ :- FETERS
214. The limit of FPI investment in Central Govt. Securities (G-Sec), State Development Loans (SDLs) and
Corporate Bonds shall be ______%, ______% and ______% of outstanding stocks of securities respectively in
FY 2019-20.Large Exposures Framework (LEF) (01.04.2019) 33 to 39. :- 6, 2, 9
215. For the purpose of reckoning exposure limits under LEF, an Indian branch of a foreign GSIB will be
considered as any other Indian bank and can accordingly take exposure upto _______% of its Tier I capital on
another non-GSIB in India:- 25%
216. The interbank exposure limit of an Indian branch of a foreign G-SIB with its Head Office will be ______%
of its Tier I capital in India :- 20%
217. Under the LEF, the sum of all exposure values of a bank (measured as specified in paragraphs 7, 8, 9
and 10 of this framework) to a counterparty or a group of connected counterparties (as defined in paragraph
6 below) is defined as a ‘Large Exposure(LE)’, if it is equal to or above ______ percent of the bank’s eligible
capital base :- 10%
218. It has been decided that henceforth, banks should disclose divergences, if either or both of the following
conditions are satisfied: (a) the additional provisioning for NPAs assessed by RBI exceeds _____ per cent of
the reported profit before provisions and contingencies for the reference period, and (b) the additional
Gross NPAs identified by RBI exceed _____ per cent of the published incremental Gross NPAs for the
reference period. :- 10, 15
219. Ombudsman Scheme for Non-Banking Financial Companies (NBFCs) is applicable for (a) are authorized to
accept deposits; (b) are Non-Deposit Taking Non-Banking Financial Companies having customer interface,
with assets size of Rupees _______ crore or above, as on the date of the audited balance sheet of the
previous financial year 100
220. The CRILC-Main Report shall be submitted on a monthly basis if aggregate exposure is Rs. _______ Cr
or above 5
221. Resolution Plans involving restructuring / change in ownership in respect of account where the
aggregate exposure of lenders is  1 billion and above, shall require independent credit evaluation
(ICE) of the residual debt by credit rating agencies (CRAs) specifically authorized by the Reserve Bank
for this purpose. While accounts with aggregate exposure of  ________ billion and above shall
require two such ICEs, others shall require one ICE :- 5
222. Where a viable Resolution Plan in respect of a borrower is not implemented within 180 days from
the end of Review Period, all lenders shall make additional provisions_______% of total outstanding.
20
223. Where a viable Resolution Plan in respect of a borrower is not implemented within 365 days from the
end of Review Period, all lenders shall make additional provisions _______% of total outstanding (other than
additional provision made for above):- 15
224. If the change in ownership is implemented under this framework, then the classification as ‘standard’
shall be subject to the condition among others is that the new promoter shall have acquired at least _____
per cent of the paid up equity capital as well as voting rights of the borrower entity and shall be the single
largest shareholder of the borrower entity:- 26
225. Some modifications have come under maintaining BSBD accounts in bank are as under;
(a) No limit on number and value of deposits that can be made in a month
(b) Minimum of four withdrawals in a month, including ATM withdrawals
(c) not be eligible for opening any other savings bank deposit account in that bank
(d) If have other SB account in that bank, he/she will be required to close it within 60 days from the
date of opening a BSBD Account
226. Which statement is false?
227. The reimbursement of MDR claims will be handled directly by _________________ w.e.f. january 01,
2019 instead of RBI. MeitY
228. An electronic trading platform for buying/selling foreign exchange by retail customers of banks,
FX-Retail, is ready for rollout by _____________ CCIL
EXPECTED QUESTIONS ON BUDGET 2019-20

1) The focus of the Union Budget for 2019-20 is ‘Gaon, Gareeb aur Kisan’, as the government aims to
provide houses, electricity and clean cooking facility to all rural households by.:2022
2) India is all set to become US$ trillion economy by the end of FY2020. :3
3) India was a US$ 1.85 trillion economy in 2014 and it has reached trillion in five years, the fastest
growing major economy and the sixth largest economy in world. :US$ 2.7
4) India targets to become economy in the next five years and might become a US$ 10 trillion
economy in the next eight years thereafter. US$ 5 trillion
5) India is now the __ largest economy in the world. : 6th
6) Indian economy is globally the _____largest in Purchasing Power Parity (PPP) terms. 3rd
7) The Government has assumed a nominal GDP growth rate of __ (i.e., real growth plus inflation) in
2019-20. The nominal growth estimate for 2018-19 was 11.5%.: 12%
8) Total expenditure for 2019-20 is budgeted at Rs. 2,786,349 crore, an increase of __ from 2018-19
(budget estimates). :14.09%
9) The receipts (other than net borrowings) are expected to increase by to Rs. 20,82,589 crore,
owing to higher estimated revenue from corporation tax and dividends. a)13.8% b)12.4% c)14.2%
d)15.5%
10) Revenue deficit is targeted at of GDP, which is higher than the revised estimate of 2.2% in 2018-
19: 2%
11) Fiscal deficit is targeted at of GDP, lower than the revised estimate of 3.4% in 2018-19. : 3.3%
12) The government is estimated to breach its budgeted target for fiscal deficit (3.3%) in 2018-19 and the
medium term fiscal target of __ in 2019-20. : 3.1%
13) Among the top 13 ministries with the highest allocations, the highest percentage increase is
observed in the ________ (82.9%), followed by Ministry of Petroleum and Natural Gas (32.1%) and
Ministry of Railways (23.4%). : Ministry of Agriculture & Farmers Welfare
14) As per the budget, target of Rs. crore of disinvestment receipts set for the FY 2019-
20.:1,05,000
15) Individual taxpayer with annual income up to Rs. lac will get full tax rebate and hence will not
be required to pay any tax. : 5
16) In the Union Budget 2019-20, the surcharge on income tax for individuals earning between two crore
rupees and five crore rupees has been increased to ___% and for persons earning over five crore rupees
has been increased to ____%. a) 25%; 37% b) 30%; 40% c) Now Rolled Back d) a and c
17) Currently, companies with annual turnover of less than Rs. 250 crore pay corporate income tax at
the rate of 25%. This threshold has been increased to Rs cr. : 400
18) A TDS of 2% will be levied by financial companies and post offices on individuals for cash withdrawals
exceeding rupees in a year from a bank account to promote less cash economy. :1 cr
19) Enhanced interest deduction up to Rs. ______ for purchase of an affordable house for self-occupied
house owners. The conditions for availing this deduction are that the loan must be sanctioned in FY 2019-
20 and the stamp duty on the house should not exceed Rs. 45 lakh rupees. Further, the individual should
not own another residential house property as of the date of the home loan. : 3,50,000
20) A tax deduction of up to Rs. will be provided on interest paid on loans to purchase an electric
vehicle. This deduction will be applicable for loans sanctioned between FY 2019-20 and FY 2022-23.
1,50,000
21) The Road and Infrastructure Cess on petrol and highspeed diesel has been increased by rupee per
litre. Excise duty has also been increased by one rupee per litre for these products. : One
22) The customs duty on gold and precious metals has been increased from 10% to _ . : 12.5%
23) Business establishments with annual turnover more than Rs. shall offer low cost digital modes
of payment to their customers and no charges to be imposed on customers as well as merchants. : 50 cr
24) NPAs of commercial banks reduced by over Rs. 1 lakh crore over the last year. Record recovery of
over Rs. _____ crore effected over the last four years. Provision coverage ratio at its highest in seven
years. : 4 lakh
25) The government plans to partially guarantee for first ____% of loss to Public Sector Banks for funds
provided in a pooled manner to NBFCs. : 20%
26) As per the Budget 2019-20, Rs. __ crore will be provided for recapitalisation of Public Sector Banks.
70,000
27) The central government will invest Rs.___ lakh crore in infrastructure over the next five years.
100/-
28) The minimum public shareholding in listed companies will be increased from 25% to . :28%
29) Government has proposed granting of loans up to Rs 1 crore for MSMEs within 59 minutes through a
committed online portal. Under the Interest Subvention Scheme for MSMEs, a sum of has been
allocated for FY 2019-20. : Rs.350 cr
30) The Budget proposes to extend the pension benefit to about three crore retail traders & small
shopkeepers whose annual turnover is less than Rs. crore under ‘Pradhan Mantri Karam Yogi Maandhan
Scheme’. : Rs 1.5 cr
31) SFURTI: Common Facility Centres (CFCs) to be setup to facilitate cluster based development for
making traditional industries more productive, profitable and capable for generating sustained
employment opportunities. Full form of SFURTI : Scheme of Fund for Upgradation and Regeneration of
Traditional Industries
32) ASPIRE: 80 Livelihood Business Incubators (LBIs) & 20 Technology Business Incubators (TBIs) to be
setup in 201920. Full Form of ASPIRE : Scheme for Promotion of Innovation, Rural Industry and
Entrepreneurship
33) Capital gains exemptions from sale of residential house for investment in Start-ups extended till
FY21
34) The Budget has proposed to consider issuing Aadhaar Card for NRIs with Indian Passports on their
arrival without waiting for days. : 180
35) As per the Budget, for Insurance intermediaries Foreign Direct Investment (FDI) will be permitted
upto ________: 100%
36) Statutory limit for Foreign Portfolio Investment will be increased from the current to sectoral
limits. : 24%
37) Government to meet public shareholding norms of ___% for all listed PSUs and raise the foreign
shareholding limits to maximum permissible sector limits for all PSU companies which are part of
Emerging Market Index. : 25%
38) The focus of the government is on the ___ for addressing critical gaps in the value chain, including
infrastructure, modernization, traceability, production, productivity, post-harvest management, and
quality control. : Pradhan Mantri Matsya Sampada Yojana’ (PMMSY)
39) To work towards adoption of model which can help in doubling our farmers’ income in time
for our 75th year of Independence. :Zero Budget Farming
40) Under the Pradhan Mantri Gram Sadak Yojana, lakh km of road will be upgraded at an
estimated cost of Rs. 80,250 crore in the next five years. : 1.25lac
41) To ensure 'Har Ghar Jal' by _ all rural households will be provided with piped water supply under
the Jal Jeevan Mission.: 2024
42) India plans electricity, clean cooking facilities for all Indian families by . 2022
43) Under, Pradhan Mantri Awas Yojana – Urban (PMAYUrban), over 81 lakh houses with an investment of
about Rs. ____ lakh crore sanctioned of which construction started in about 47 lakh houses.: 4.83
44) An overdraft of _ will be provided to women self-help group (SHG) members who hold Jan-Dhan
accounts. Further, a loan up to __ rupees will be provided under the MUDRA scheme to one woman in
every SHG. : Rs 5000; one lakh
45) The Budget has provided for Rs. ____ crore (US$ 60 million) provided for ‘World Class Institutions’
for FY20. : Rs 400/-
46) being developed by National Council for Science Museums to sensitize youth & society about
positive Gandhian values. Gandhipedia
47) A dispute resolution cum amnesty scheme called the is being introduced for resolution and
settlement of legacy cases pending under various Acts, including the Central Excise Tax, 1944, and the
Sugar Cess Act, 1982. : Sabka Vishwas Legacy Dispute Resolution Scheme
48) Under the RBI Act, RBI may set a minimum net worth requirement for NBFCs between Rs. 25 lakh and
two crore rupees. The amendment allows RBI to set the minimum requirement up to Rs. crore. 100
49) The RBI may remove any director of a non-government NBFC and replace him with a temporary
director for a period of ___ years. : 3yrs
50) In case of NBFC, penalties for certain offences has been increased. For example, failure to furnish
information under the Act is punishable with Rs. 2,000. This has been increased to Rs.______. Further,
the penalty for an auditor for failing to comply with the directions of the RBI has been increased from Rs.
5,000 to Rs._______.1,00,000/-;10,00,000/-
51) Government will provide a one-time six months' partial credit guarantee to public sector banks to buy
high-rated pooled assets worth Rs. _____ lakh crore from NBFCs. : 1
52) As per the amendment in National Housing Bank Act, 1987, to register as a housing finance
institution, a company must have a net-owned fund of Rs. 25 lakh, or higher notified amount. This
threshold is being increased to Rs. _____cr or more. : 10
53) National Housing Bank Act is being amended to transfer the powers to regulate to _______: RBI
54) The Insurance Act, 1938 is being amended requiring net owned funds of at least Rs. _____ crore for
registration of foreign insurers engaged in re-insurance business and operating in an International
Financial Services Centre set up in Special Economic Zones. 1,000
55) The Securities and Exchange Board of India,1992 imposes penalties on entities which fail to furnish
information required under law to a stock exchange or furnish incorrect information to the stock
exchange. These penalties range from one lakh rupees to ______ crore rupees. The Act is being
amended to extend the penalty for failure to furnish this information to the SEBI in addition to the stock
exchange. :One
56) Presently under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970; the
Board of Directors of the bank will include four whole time directors. The Act is being amended to
increase the number of directors to _____. :5
57) As per the amendment in General Insurance Business (Nationalisation) Act, 1972; Indian insurance
companies will be reorganised into __ insurance companies (excluding the General Insurance
Corporation):. four
58) Prohibition of Benami Property Transactions Act, 1988 is being amended to increase penalties under
the Act. In addition to existing penalties, any person who fails to comply with summons or furnishes
false information will be liable to pay Rs. _______ for each such failure. Further, under the Act, prior
sanction is required for prosecution of certain offences under the Act from the CBDT. The sanctioning
authority has been changed to Commissioner, Director, Principal Commissioner, or Principal Director of
Income Tax. : 25,000
59) The Finance Bill changes the definition of ‘assessee’ in the Black Money (Undisclosed Foreign Income
and Assets) and Imposition of Tax Act, 2015. Currently, the Act applies to a resident of India. The Bill
amends this to make the Act applicable to both Indian residents and non-residents as defined under the
___________. Income Tax Act
60) The Prevention of Money Laundering Act, 2002 is being amended to increase the responsibilities of
reporting entities (such as, banks and other financial institutions). These entities will be additionally
required to authenticate identities of their clients, the source of their funds, and the nature of
relationship between the transacting parties. Data obtained while verifying transactions must be kept for
_______ years. : 5
61) SEBI Act, 1992 is being amended to add capital expenditure to the list of expenses incurred by the
General Fund maintained by SEBI. Additionally, the Bill amends the Act to constitute a Reserve Fund
which will be credited with ______ of the annual surplus of the General Fund. Further, the
amendment adds penalties for concealment, destruction, or falsification of records, or access to
unauthorised information. The penalties may range from Rs. 1 lakh rupees to up to Rs. _____ crore or
three times the amount of profits made from the act, whichever is higher. 25%;10
62) India’s Ease of Doing Business ranking under the category of paying taxes jumped from 172 in 2017 to
in the 2019.: 121
63) Aadhaar and _ to be interchangeable and permit those who do not have to file Income Tax
returns by only citing their Aadhaar number: PAN;PAN
64) Taxpayers having annual turnover of less than can now file quarterly returns. : Rs 5 cr
65) Direct tax incentives proposed for an IFSC; 100% profitlinked deduction in any ten-year block within
a fifteen-year period; exemption from dividend distribution tax from current and accumulated income to
companies and mutual funds; exemptions on capital gain to Category-III Alternative Investment Funds
(AIFs). Full form of IFSC: International Financial Services Centre (IFSC)
66) STT restricted only to the difference between settlement and strike price in case of exercise of
options. Full form of STT is _____: Securities Transaction Tax
67) a PSE, incorporated as a new commercial arm of Department of Space. New Space India
Limited (NSIL))
68) new Indian diplomatic Missions in Africa approved in March, 2018, out of which 5 already
opened. Another 4 new Embassies intended in 2019-20. : 18
69) iconic Tourism Sites being developed into model world class tourist destinations. : 17
70) As per the third Bi-monthly Monetary Policy 2019-20 resolution, the Reverse repo rate under the LAF
determined with a spread of 25 bps below the repo rate reduced to ___ per cent.: 5.40
11. ONE LINER QUESTIONS-ANSWER ON RBI POLICIES ( 01.01.2017 to 31.12.2018)

1. According to Section 215 of Insolvency and Bankruptcy Code (IBC), 2016, a financial creditor like a bank,
is required to submit financial information and information relating to assets in relation to which any
security interest has been created, to : Information Utilities
2. The Insolvency and Bankruptcy Board of India (IBBI) has appointed as the first Information Utility under the
IBBI (IUs) Regulations, 2017. National E-Governance Services Limited
3. Under Insolvency and Bankruptcy Code 2016, for insolvency resolution, the default amount should be
minimum: Rs.100000
4. Under Insolvency and Bankruptcy Code 2016, for insolvency resolution, the case can be filed with:
National Company Law Tribunal
5. There are 4 pillars under Insolvency and Bankruptcy Code 2016. Which one of this is not stated correct?
Credit Information companies.
6. Under Insolvency and Bankruptcy Code 2016, what is the time limit available with the financial creditor
to take a decision on insolvency resolution plan, with permission from NCLT? 180 days
7. For making a reference to NCLT under Insolvency and Bankruptcy Code 2016, what %age of creditor
should give their consent: 75% creditor by voting right.
8. Under Insolvency and Bankruptcy Code 2016, if a case is referred to NCLT and the creditors do not take
any decision on the resolution plan, what is further course of action? NCLT will order the liquidation.
9. What is the limit for investment by Foreign Portfolio Investors for the quarter January – March 2018 for
investment Central? a Government Securities? INR 64 billion.
10. What is the limit for investment by Foreign Portfolio Investors for the quarter January – March 2018 for
investment in State Development Loans (SDLs)? INR 58 billion.
11. What is e-Kuber? digital payment system operated by RBI.
12. The maximum merchant discount rate (MDR) for small merchants at physical POS can be 0.40% with a
maximum of: Rs.200.
13. The maximum merchant discount rate (MDR) for other merchants at physical POS can be 0.40% with a
maximum of: Rs.1000
14.Negative gap between total revenue receipts and total revenue expenditure, is called: Revenue Deficit
15. Negative gap between (revenue receipts plus non-debt capital receipts) and total expenditure, is called:
Fiscal Deficit
16. Effective revenue deficit is calculated as: Revenue deficit less grants for creation of capital assets
17. Primary deficit is calculated as: fiscal deficit less interest payments.
18. As per Central Govt. Budget 2018-19 proposals, for larger financing of MSMEs, which of the following
action is proposed? on boarding banks and corporates on TReDS platform.
19. As per Central Govt. Budget 2018-19 proposals, the lending under MUDRA target has been fixed at:
Rs.300000 cr.
20. As per Central Govt. Budget 2018-19 proposals, govt. will contribute ____ of new employees in EPF for
all the sectors for next 3 years. 12% of wages.
21. As per Central Govt. Budget 2018-19 proposals, which of the following are proposed to be merged into
one entity? public sector general insurance companies.
22. As per Central Govt. Budget 2018-19 proposals, the equity of which of the following is proposed to be
transferred from RBI to Govt. of India? National Housing Bank
23. What is the lending target for small and marginal farmers (within priority sector) in respect of foreign
banks with 20 or more branches w.e.f. 1.4.2018? 8.0% of ANBC or CEOBE, whichever is higher
24. What is the lending target for micro enterprises (within priority sector) in respect of foreign banks with
20 or more branches w.e.f. 1.4.2018? 7.5% of ANBC or CEOBE, whichever is higher.
25. With effect from 01.04.2018, the base rate of bank should be linked with which of the following:
Marginal cost-based lending rate.
26. As per provisions of Code of Bank’s Commitment to Customers-2018, if bank changes terms and
conditions of its products, it has to inform the customers: 30 days before the change
27. As per provisions of Code of Bank’s Commitment to Customers-2018, the bank is required to update the
credit status of a borrower with Credit Information Companies within: 30 days.
28. As per provisions of Code of Bank’s Commitment to Customers-2018, if a customer lodges a complaint
with the bank, it will be finally disposed off within? 30 days.
29. As per provisions of Code of Bank’s Commitment to Customers-2018, to contact a borrower, bank official
or agent, can approach them: between 10 am to 5 pm.
30. As per provisions of Code of Bank’s Commitment to Customers-2018, if a customer opens a new account
but is not satisfied and wants to switch to some other account, he can do so within ____ without payment of
any charges : 14 days.
31. As per provisions of Code of Bank’s Commitment to Customers-2018, if bank wants to change the
minimum balance condition, it can be done ____: by giving 30 days advance notice.
32. As per provisions of Code of Bank’s Commitment to Customers-2018, banks will inform the customer at
least ____ before account is classified as inoperative / dormant and the consequences thereof at last
recorded address and / or e-mail. 3 months.
33. As per provisions of Code of Bank’s Commitment to Customers-2018, under normal circumstances, bank
will not close customer account without giving at least ____ notice indicating the reasons for such closure.
30 days.
34. As per provisions of Code of Bank’s Commitment to Customers-2018, banks will settle the claims in
respect of deceased depositors and release payments to survivor(s) / nominee within aperiod not exceeding
___ from the date of receipt of the claim. 15 days.
35. As per provisions of Code of Bank’s Commitment to Customers-2018, banks will return to borrower, all
the securities / documents / title deeds to mortgaged property within ______ days of the repayment of all
dues agreed to : 15 working days
36. As per provisions of Code of Bank’s Commitment to Customers-2018, banks will process a request for
transfer of borrowal account and convey their concurrence or otherwise within _____ of receipt of request.
2 weeks
37. As per RBI directives on resolution of stressed assets, if a loan account shows some irregularity in CC
account or fails to pay term loan dues on time or delays in meeting obligation under non-fund facilities, it is
called: stressed asset.
38. As per RBI directives on resolution of stressed assets, if a loan account shows some irregularity in CC
account for 43 days or fails to pay term loan dues with in 43 days, it is classified as: SMA-1 account
39. As per RBI directives on resolution of stressed assets, default in CC or OD account means that the o/s
balance remaining above limit or DP, for more than ___ days: 30 days
40. As per RBI directives on resolution of stressed assets, in respect of loan accounts with exposure of
Rs.2000 cr or above, the resolution plan is to be implemented within : 180 days
41. As per RBI directives on resolution of stressed assets, if a resolution plan is not implemented within
stipulated period, the lenders shall file insolvency application (singly or jointly), under Insolvency and
Bankruptcy Code 2016 (IBC), within: 15 days
42. As per RBI directives on resolution of stressed assets, the term ‘specified period’ begins from the date
of implementation and goes up to the date by which, at least ___ % of o/s principal debt as per RP and
interest capitalisation sanctioned as part of the restructuring, is repaid. 20%
43. As per RBI directives on resolution of stressed assets, after change of ownership in respect of a
borrowing entity, for an account (stressed asset) to be classified as standard after resolution plan, one of the
conditions is that the new promoter should be a single largest shareholder with a share of ___ % in the paid
up equity of the company: 26%
44. As per RBI directives on resolution of stressed assets, large accounts (i.e. aggregate exposure of lenders
is Rs.1 billion and above) are to qualify for an upgrade to standard category, to demonstrate satisfactory
performance and the credit facilities shall also be rated as investment grade i.e. ____ as at the end of
‘specified period’ by CRAs accredited by RBI for bank loan ratings. b BBB- or better.
45. Initiation of legal proceeding as a pre-condition for invoking of guarantees, is waived by CGTMSE in
respect of those credit facilities covered under CGS, where the aggregate outstanding amount considered
eligible for claim settlement by CGTMSE does not exceed ____ per claim. Rs.50000
46. The lending institution under CGTMSE guarantee, may invoke the guarantee in respect of credit facility
within a maximum period of ____ years subject to certain other conditions. three years
47. Under a claim cap conditions, the claims of the respective member lending institution under CGTMSE
guarantee scheme, will be settled to the extent of ____ times of the fee including recovery remitted during
the previous financial year. two times
48. Any claim lodged / received exceeding prescribed limit in CGTMSE guarantee scheme : will be
suspended till payout is brought within the cap limit.
49. Under CGTMSE credit guarantee scheme, the standard rate of annual guarantee fee for loans to women,
micro enterprises or loans in North Eastern States, up to Rs.5 lac, after 1st year, is ___ , for loans
sanctioned or renewed on or after 1.4.2018?: 1.00% of outstanding amount
50. Under CGTMSE credit guarantee scheme, the standard rate of annual guarantee fee for loans other than
to women, micro enterprises or loans in North Eastern States, up to Rs.5 lac, during 1st year, is ___ , for
loans sanctioned or renewed on or after 1.4.2018? 1.00% of sanctioned amount.
to women, micro enterprises or loans in North Eastern States, up to above Rs.5 lac to Rs.50 lac, after 1st
year, is ___ , for loans sanctioned or renewed on or after 1.4.2018? : 1.50% of outstanding balance.
micro enterprises or loans in North Eastern States, up to above Rs.5 lac to Rs.50 lac, during 1st year, is
___ , for loans sanctioned or renewed on or after 1.4.2018? : 1.35% of outstanding amount.
micro enterprises or loans in North Eastern States, up to above Rs.50 lac to Rs.200 lac, during 1st year, is
___ , for loans sanctioned or renewed on or after 1.4.2018? 1.80% of sanctioned amount.
to women, micro enterprises or loans in North Eastern States, up to above Rs.50 lac to Rs.200 lac, after 1st
year, is ___ , for loans sanctioned or renewed on or after 1.4.2018?: 1.80% of outstanding amount .
55. In respect of credit facilities sanctioned or renewed on or after 1.4.2018, CGTMSE provides guarantee
cover @ ___ of amount in default, where the amount is Rs. 50 lac or above? 75%
56. Under CGTMSE credit guarantee scheme, the retail trade loans in MSE are guaranteed to the extent
of __ if sanctioned or renewed on or after 1.4.2018: Rs.10 lac to Rs.100 lac
57. Under CGTMSE credit guarantee scheme, the guarantee fee for 1st year for retail trade loans in MSE is
___ if sanctioned or renewed on or after 1.4.2018: 2.00% of sanctioned amount.
58. Under CGTMSE credit guarantee scheme, the guarantee cover for retail trade loans in MSE is ___ of
amount of default, if sanctioned or renewed on or after 1.4.2018: 50% .
59. According to current RBI guidelines, which of the following can be issued by banks: letter of credit.
60. The ways and means advance limit for the 1st quarter of FY 2018- 19, has been fixed RBI for Central
Govt. at: Rs.60000.
61. If there is overdraft in case of Ways and Means advance, RBI charges interest at : repo rate + 2%.
62. Responsibility of administering the valuation of govt. securities, w.e.f. 1.4.2018 is done by: Financial
Benchmark India Pvt Ltd.
63. For remittance allowed by authorized dealers, under Liberalized Remittance Scheme of RBI, the report
of transactions is to be sent ____ from April 2018 onwards: on a daily basis
64. In order to mitigate the risk involved in open cash replenishment / top up in case of ATM cash
replenishment, RBI has directed banks to use: lockable cassettes in their ATMs
65. In order to mitigate the risk involved in open cash replenishment / top up in case of ATM cash
replenishment, RBI has directed banks to complete the implementation of using lockable cassettes in their
ATMs, latest by: 31.03.2021
66. In view of high risk associated, RBI has advised banks not to deal with or provide any support to entities
dealing with: virtual currencies
67. All payment system providers are required to store entire data relating to payment systems operated by
them: system located in India.
68. If a bank engages services of a service provider for cash management logistic, the networth of the
service provider, should be: Rs.100 cr or above
69. If a bank engages services of a service provider for cash management logistic, the fleet size of the
service provider, should be: at least 300 specifically fabricated cash vans owned or leased
70. If a bank engages services of a service provider for cash management logistic, the no. of cash
custodians and security guards should be: 2 + 2
71. Under The Fugitive Economic Offenders Ordinance, 2018, the authorized officer can file application for
declaration of a person as Fugitive Economic Offender (FEO), in : Special Court
72.Under The Fugitive Economic Offenders Ordinance, 2018, if the authorized officer provisionally attaches
the property it has to file application in the competent court within: 30 days
73. Under The Fugitive Economic Offenders Ordinance, 2018,appeal against decision of Special Court can be
made to: High Court
74. In normal course, generation of E-Way Bill under GST is mandatory where the value of goods to move, is:
more than Rs.50000
75. Under GST regime, the validity period of E-Way bill where the distance is up to 100 kms is: One day
76. As per Basel III Framework for Liquidity Risk measurement, there are 2 minimum standards relating to
liquidity. These include: net stable funding ratio, liquidity.
77. Net stable funding ratio (NSFR) is calculated, with the help of following? : net stable funds / required
stable funds..
78. The net stable funding ratio, as being implemented in India should be: 100% or more
79. Under net stable funding ratio,which of the following is not part of available stable funding? deposits
placed with other insitutions with min maturity of one year.
80. What is the associated ASF factor value for demand and time deposit with min maturity of one year for
net stable funding ratio calculation, under NSFR guidelines? : 95%.
81. Which of the following is not part of required stable funding for the purpose of net stable funding ratio,
as part of NSFR? : a CRR balances b SLR investment c standard loans d none of the above.
82. What is included in off-balance sheet items requiring stable funding, as part of NSFR: bank Garantee.
83. What is the associate RSF factor for bank guarantee, as part of NSFR?: 5%.
84. What is the periodicity of sending report to RBI relating to NSFR?: quarterly.
85. What is the minimum capital which sponsor bank must contribute for an IFSC Banking Unit? : USD 20
million.
86. Rate of interest which bank are required to pay to customer on balance in their account transferred
to Depositor Education Awareness Fund, w.e.f. 1.7.2018 is___ % p.a. simple: 3.5%.
87. For a home loan to be classified in priority sector lending, the cost of house in metro centres
(population 10 lac and above) is restricted to: Rs.45 lac
88. For a home loan to be classified in priority sector lending, the amount of loan in metro centres
(population 10 lac and above) is restricted to: Rs.35 lac
89. For a home loan to be classified in priority sector lending, the cost of house in non-metro centres
(population below 10 lac) is restricted to: Rs.35 lac
90. For a home loan to be classified in priority sector lending, the amount of loan in non-metro centres
(population below 10 lac) is restricted to: Rs.25 lac
91. For a housing projects for economically weaker section (EWS) and low income group (LIG), to be
included in priority sector lending, the annual family income in respect of EWS can be: Rs.3 lac
92. For a housing projects for economically weaker section (EWS) and low income group (LIG), to be
included in priority sector lending, the annual family income in respect of LIG can be: Rs.6 lac
93. For the purpose of remittance in Liberalized Remittance Scheme of RBI for maintenance of close
relative, the definition of ‘relative’ is same as in case of: Companies Act 2013
94. If RBI intends to take enforcement action against a Statutory Auditor for deficiency, it can do so by
giving a show cause notice of : 15 days
95. As per RBI schedule for upgrading of ATMs, all ATMs are to be upgraded latest by: Jun 2019
96. As per changes proposed to be carried in Loan System of Credit Delivery, the eligible working capital
fund based loan means credit limit of Rs.___ and above. Rs.150 cr
97. As per changes proposed to be carried in Loan System of Credit Delivery, for eligible working capital
fund based loan, the loan portion, to start with, shall be ___% of limits: 40%
98. As per changes proposed to be carried in Loan System of Credit Delivery, for eligible working capital
fund based loan, the minimum period of loan portion, shall be: 7 days.
99. Under Golden Monetization Scheme as amended in Jun 2018,short term bank deposit can be with a
maturity of: 1 to 3 years with broken period
100. Under Golden Monetization Scheme as amended in Jun 2018, medium term govt. deposit can be
with a maturity of: 5 to 7 years with broken period
101. Under Golden Monetization Scheme as amended in Jun 2018, how much commission is payable to
agency banks: 1%
102. Sale of a govt. security by a bank, which it does not own, to other bank is called: short sale
103. Which of the following entities are not allowed by RBI to undertake short sale?: Regional Rural
Banks
104. What is max limit on short sale in respect of liquid securities? : 2% of the total outstanding stock
of each security, or, Rs.500 crore whichever is higher.
105. What is max limit on short sale in respect of other securities? : 1% of the total outstanding stock
of each security, or, Rs.250 crore whichever is higher.
106. Short sales transaction undertaken by the eligible entities is required to be covered within a
period of _____ from the date of transaction : 3 months.
107. The short sale position executed in the OTC market should be reported by a bank on the NDSOM
platform within ____ of the execution of the trade. : 15 minutes.
108. A govt. security that has been authorized for issuance but not yet actually issued by issuer so far
is called: when issued security.
109. The securities eligible for ‘When Issued’ transactions do not include:securities issued by State
Governments
110. In case an entity is not able to deliver securities sold on a ‘When Issued’ basis to the buyer on the
date of issue, the transaction will be settled as per the default settlement mechanism of ____ Clearing
Corporation of India Limited (CCIL).
111. The open position limits (long or short position) in the ‘When Issued’ market can be max ___ for
primary dealers and scheduled commercial banks?: max 25% of the notified amount in the auction.
112. The open position limits (short position) in the ‘When Issued’ market can be max ___ for Other
eligible entities?: max 10% of the notified amount in the auction.
113. All OTC When Issued transactions shall be reported to NDS-OM within 15 Minutes of the trade.
114. A settlement mechanism which stipulates that transfer of funds from the buyer of securities is
made simultaneously with the transfer of securities by the seller of securities, is called: delivery vs
payment
115. The difference between the market value of the collateral security and the amount
borrowed/lent against that collateral security is called: haircut
116. An instrument for borrowing funds by selling securities with an agreement to repurchase the
securities on a mutually agreed future date at an agreed price which includes interest for the funds
borrowed, is called: repo
117. An instrument for lending funds by purchasing securities with an agreement to resell the
securities on a mutually agreed future date at an agreed price which includes interest for the funds lent, is
called : reverse repo
118. Under Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018, securities eligible for
repo do not include which of the following: (a)Govt. securities (b) Listed corporate bonds and debentures (c)
commercial paper and certificate deposit (d) none of the above.
119. Under Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018, which of the following
are eligible to participate in repo transaction: (a) listed companies (b) all India financial institutions (c)
regulated entities (d) all the above.
120. Under Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018, what is the minimum and
max tenor of a repo transaction? : min 1 days max one year
121. Agency banks are required to submit their agency commission claims to the Reserve Bank of India
within ____ from the end of the quarter during which the transactions have been conducted. : 60 days.
122. The applicable system wide average figure for computing achievement under priority sector
lending with regard to overall direct lending to non corporate farmers, for the FY 2018-19 is 11.99%.
123. With effect from 15.09.2018, while issuing demand draft, pay order, banker’s cheque, etc., the
issuing bank shall include: name of the purchaser.
124. To change the liquidity conditions in banking system, RBI sells and buys govt. securities. It is
called: open market operations
125. For the purpose of Facility to Avail Liquidity for Liquidity Coverage Ratio, how much amount can
be carved out from SLR as a percent of NDTL w.e.f. Oct 01, 2018: 15%
126. Under RBI’s ECB policy for manufacturing sector, the minimum average maturity for amount up
to USD 50 million can be: 1 year
127. Indian banks, can act as arranger and underwriter for Rupee denominated bonds (RDB) issued
overseas and in case of underwriting an issue, their holding cannot be more than 5% of the issue size after 6
months of issue.
128. Banks and NBFCs can co-originate priority sector loans. Out of the following type of NBFCs, which
one is eligible for this purpose: NBFC – non-deposit taking systematically important.
129. Banks and NBFCs can co originate priority sector loans as per RBI guidelines. What is the
minimum percent of credit risk by way of direct exposure, that the NBFC has to take? : 20% of credit risk
130. The Bank and the NBFC shall open an escrow type common account for pooling respective loan
contributions for disbursal as well as to appropriate loan repayments from borrowers, without holding the
funds for usage of float.
131. Banks and NBFCs can co originate priority sector loan as per RBI guidelines. The asset
classification status of these loans shall be: independent of each other
132. Any complaint registered by a borrower with the NBFC and/or bank under co-origination of
priority sector loans, shall also be shared with the bank/ NBFC and in case, the complaint is not resolved
within 30 days, the borrower would have the option to escalate the same with concerned Banking
Ombudsman/Ombudsman for NBFCs.
133. The concerted efforts of a person/persons to prevent an internet site or service from functioning
efficiently is called: Denial of service attack.
134. Large numbers of compromised systems (sometimes called a Bot net) attack a single target,
thereby causing denial of service for users of the targeted system. It is called: Distributed denial of
service.
135. A type of malicious software from crypto virology that threatens to publish the victim’s data or
perpetually block access to it unless desired amount is paid, is called?: Ransomware.
136. Special computer programmed that enable intruders to fool an individual into believing that
traditional security is protecting him during online banking transactions. : Malware
137. The fraudulent attempt to obtain sensitive information such as usernames, passwords and credit
card details, often for malicious reasons, by disguising as a trustworthy entity in an electronic
communication: Phishing
138. Fraudulent attempt directed at specific individuals or companies to obtain sensitive information
such as usernames, passwords and credit card details, often for malicious reasons, by disguising as a
trustworthy entity in an electronic communication: Spear phishing
139. Fraudulent attempt directed specifically at senior executives and other high-profile targets to
obtain sensitive information such as usernames, passwords and credit card details, often for malicious
reasons, by disguising as a trustworthy entity in an electronic communication: Whaling.
140. The illegal access of data via voice over Internet Protocol (VoIP).Vishing is IP telephony’s version
of phishing and uses voice messages to steal identities and financial resources: Vishing.
141. As per provisions of Companies (Amendment) Ordinance, 2018,directors of companies with share
capital, are to file a declaration within a period of 180 days from the date of incorporation of the company
that every subscriber to the memorandum has paid the value of the shares as agreed for.
142. As per provisions of Companies (Amendment) Ordinance, 2018, Registrar of Company has the
powers to register charge created on assets of a company within a period of 60 days from date of creation
of charge:
143. As per provisions of Companies (Amendment) Ordinance, 2018, if charge is not registered within
stipulated time, RoC may on application, allow the registration of the charge within a period of further 60
days on payment of advalorem fees.
144. With effect from Jan 05, 2019, Statutory Liquidity Ratio shall be cut by ___ basis points every
quarter? 25 basis points
145. Statutory liquidity ratio shall be cut in stages on quarterly basis to bring it to ___% of net demand
and time liabilities by 11.04.2020? 18.00%
146. Average base rate of 5 largest commercial banks to be used by NBFC-Micro Finance Institutions
for Jan-Mar 2019 quarter is? 9.15%
147. Expert Committee appointed by RBI for Economic Capital Framework for RBI is headed by: Dr.
Bimal Jalan
148. RBI has fixed the limit on stock of External Commercial Borrowing at ___ % of GDP at current
market prices? --6.5%
149. Based on GDP fitures as on 31.03.18, what is the limit on stock ECB fixed for the current financial
year 2018-19? USD 160 billion
150. 0As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an individual resident
can borrow up to _____ from relative outside India? -USD 250000
151. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an Indian student
studying abroad can borrow up to _____ to meet fee and expenses. -USD 250000
152. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an AD in India holding
VOSTRO account of a foreign bank, can allow OD up to Rs.___: -Rs.500 cr
153. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an importer in India can
raise trade credit for import up to ____ per transaction: USD 50 million
154. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an Indian import can
raise trade credit with a minimum average maturity of ___ for non-capital goods? -1 year
155. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an Indian import can
raise trade credit with a minimum average maturity of ___ for capital goods? 3 years
restructured for total exposure up to? -Rs.25 cr
restructured. On restructure of such loan, the asset classification shall be: will not be downgraded
restructured. Such restructuring should be implemented by: -31.03.20
restructured. For such accounts, what is additional provision, which banks have to make? 5%
160. As per revision in DAY-NRLM scheme, the min no. of members in a group enterprise, for the
purpose of financing can be: 3
161. As per RBI guidelines, the Loan System of Credit Delivery w.e.f. 1.4.19 is applicable for corporate
borrowers availing fund based working capital of ___ from banking system? Rs.1500 millon
162. As per RBI guidelines on Loan System of Credit Delivery, the working capital loan components
should be ___ of availed working capital limit, to start with? - 40%
163. As per RBI guidelines on Loan System of Credit Delivery, what is min repayment period of working
capital loan? 7 days
164. XYZ Ltd are availing fund based working capital of Rs.200 cr. Availment as on 31.04.19 is Rs.173 cr. As
per RBI guidelines on Loan System of Credit Delivery, what can be the amount of availment of CC
component? -93 cr
*** ALL THE BEST & BEST OF LUCK ***

Banking Made Easy: Vision

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Banking Made Easy: Vision

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Banking Made Easy

Date: 06.01.2020 Sanjay Kumar Trivedy

He can be contacted only through msg on whatsapp no. : 9987519725

1. BANKING RELATED LAWS/ACTS

RBI Vision 2022 (Utkarsh 2022)

DEPOSIT GOVT DEPOSIT & TAX DEDUCTED AT SOURCES

3. PRIORITY SECTOR LENDING

3C.FINANCIAL INCLUSION & Govt. Sponsored Schemes

6. FOREIGN EXCHANGE AND INTERNATIONAL TRADE

EXPECTED QUESTIONS ON BUDGET 2019-20

11. ONE LINER QUESTIONS-ANSWER ON RBI POLICIES ( 01.01.2017 to 31.12.2018)

* ALL THE BEST & BEST OF LUCK *

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