The applicant company is required to apply online on https://pravaah.rbi.org.in and also submit a physical copy of the application along with the necessary documents as per the process prescribed by the Reserve Bank vide its Press Release 2015-2016/2935 dated June 17, 2016 to the  Chief General Manager-in-Charge, Department of Regulation, Reserve Bank of India, Central Office, 2nd  Floor, Main Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai-400 001.

Ans: For the purposes of determining whether a company is a CIC, ‘companies in the group’ have been exhaustively defined in para 3 (1) (v) of   of Master Direction DoR(NBFC).PD.003/03.10.119/2016-17 dated August 25, 2016 as “an arrangement involving two or more entities related to each other through any of the following relationships: Subsidiary – parent (defined in terms of AS 21), Joint venture (defined in terms of AS 27), Associate (defined in terms of AS 23), Promoter–promotee [as provided in the SEBI (Acquisition of Shares and Takeover) Regulations, 1997] for listed companies, a related party (defined in terms of AS 18), common brand name, and investment in equity shares of 20 percent and above.” 

Clarification: As per extant guidelines, SMF includes individuals, SHGs, JLGs, Farmers’ Producer Companies (FPC) and Co-operatives of farmers with the accompanying criteria of membership by number and land-holding. Therefore, loans to partnership firms/co-borrowers or any director of a company holding agriculture land upto 2 hectares are not eligible to be classified under the SMF category of PSL.

Clarification: As per extant guidelines, priority sector loans are eligible for classification as loans to minority communities as per the list notified by the GoI from time to time. The same may be read with Master Circular- Credit Facilities to Minority Communities which at para 2.2 states “In the case of a partnership firm, if the majority of the partners belong to one or the other of the specified minority communities, advances granted to such partnership firms may be treated as advances granted to minority communities. Further, if the majority beneficial ownership in a partnership firm belongs to the minority community, then such lending can be classified as advances to the specified communities. A company has a separate legal entity and hence advances granted to it cannot be classified as advances to the specified minority communities”

Clarification: Declaration by the customer in the application form would suffice for classifying credit facilities to Minorities/SCs/STs under Weaker Sections. However, it needs to be ensured that, the loans should first be eligible for classification under priority sector lending as per underlying activity.

Clarification: Banks may rely on a combination of auditors’ certification provided by the originating entity and conduct of sample check by their own staff or by an auditor for the purpose. This may be suitably built into their internal policy.

Ans: In general, the due date for participating in CPIS for end-March and end-September position is July 15 and December 31 of that year respectively.

7.1 The Public Debt Office (PDO) of RBI, acts as the registry and central depository for G-Secs. They may be held by investors either as physical stock or in dematerialized (demat/electronic) form. From May 20, 2002, it is mandatory for all the RBI regulated entities to hold and transact in G-Secs only in dematerialized (SGL) form.

a. Physical form: G-Secs may be held in the form of stock certificates. A stock certificate is registered in the books of PDO. Ownership in stock certificates cannot be transferred by way of endorsement and delivery. They are transferred by executing a transfer form as the ownership and transfer details are recorded in the books of PDO. The transfer of a stock certificate is final and valid only when the same is registered in the books of PDO.

b. Demat form: Holding G-Secs in the electronic or scripless form is the safest and the most convenient alternative as it eliminates the problems relating to their custody, viz., loss of security. Besides, transfers and servicing of securities in electronic form is hassle free. The holders can maintain their securities in dematerialsed form in either of the two ways:

1. SGL Account: Reserve Bank of India offers SGL Account facility to select entities who can hold their securities in SGL accounts maintained with the Public Debt Offices of the RBI. Only financially strong entities viz. Banks, PDs, select UCBs and NBFCs which meet RBI guidelines (please see RBI circular IDMD.DOD.No. 13/10.25.66/2011-12 dt Nov 18, 2011) are allowed to maintain SGL with RBI.

2. Gilt Account: As the eligibility to open and maintain an SGL account with the RBI is restricted, an investor has the option of opening a Gilt Account with a bank or a PD which is eligible to open a CSGL account with the RBI. Under this arrangement, the bank or the PD, as a custodian of the Gilt Account holders, would maintain the holdings of its constituents in a CSGL account (which is also known as SGL II account) with the RBI. The servicing of securities held in the Gilt Accounts is done electronically, facilitating hassle free trading and maintenance of the securities. Receipt of maturity proceeds and periodic interest is also faster as the proceeds are credited to the current account of the custodian bank / PD with the RBI and the custodian (CSGL account holder) immediately passes on the credit to the Gilt Account Holders (GAH).

7.2 Investors also have the option of holding G-Secs in a dematerialized account with a depository (NSDL / CDSL, etc.). This facilitates trading of G-Secs on the stock exchanges.

Banks may not normally refuse premature withdrawal of term deposits of individuals and Hindu Undivided Families (HUF), irrespective of the size of the deposit. However, the bank at its discretion, may disallow premature withdrawal of large deposits held by entities other than individuals and Hindu Undivided Families. Banks should notify such depositors of its policy of disallowing premature withdrawals in advance i.e. at the time of acceptance of deposits.

Ans: Yes, entities can fill the FLA return even after due date, after taking approval from RBI. But in that case, penalty clause may be invoked on the entity for late submission.

The foreign equity holders as defined at Paragraph 1.11 of the Master Direction No. 5 on ‘External Commercial Borrowings, Trade Credits and Structured Obligations dated March 26, 2019 (MD) are eligible to lend for the end-uses given at Paragraph 2.1.viii(d), 2.1.viii(e) and 2.1.viii(f) of the MD. For end-uses, other than those in the negative list, recognised lenders are given at Paragraph 2.1.iv of the MD.

Yes, foreign inward remittances received by the AD Category-I Bank having RDA with a Non Resident Exchange House may be credited directly to the account of the beneficiary held with a bank other than the AD Category-I Bank through electronic mode, such as, NEFT, IMPS, etc.Money Transfer Service Scheme (MTSS)

A. Optionally Fully Convertible Debentures (OFCDs), which were brought within the purview of Regulations in the year 1996, have now (in 1998) been taken out of the Regulations. Any money raised by issue of OFCDs is not to be treated as public deposit.

Withdrawal/debit mandates (such as National Automated Clearing House (NACH) mandates) will continue to get executed till there is balance available in your account. However, after March 15, 2024, credit or deposit in your accounts will not be allowed. Therefore, to avoid inconvenience, it is suggested that you make alternative arrangements through another bank, before March 15, 2024

No. As defined in the circular, technical write-off refers to cases where the NPAs remain outstanding at borrowers’ loan account level, but are derecognised by the lenders only for accounting purposes. Technical write-off is a normal banking practice undertaken by the lenders to cleanse the balance sheets of bad debts which are either considered unrecoverable or whose recovery is likely to consume disproportionate resources of the lenders. However, such technical write-offs do not entail any waiver of claims against the borrower and thus the lenders’ right to recovery is not undermined in any manner. Therefore, the defaulting borrowers are not benefited in any manner and their legal obligation as well as the costs of such defaults for them remain unchanged vis-à-vis the position prior to technical write-offs.

The circular only provides clarity on definition of technical write-off and a broad guidance on the process to be followed by the lenders for technical write-offs, which will ensure consistency in the approach followed by various lenders.

Ans.: After sending the duly filled in survey schedule (excel based) to the generic email IDs of the Reserve Bank as per the instruction in the survey schedule, the respondent will receive the system-generated acknowledgement. No separate mail will be sent in this regard. If some error is mentioned in the acknowledgement, then the respondent is required to resubmit the form by rectifying the mentioned error. After corrections, the respondent should receive a successful processing acknowledgement email.