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FAQs on Priority Sector Lending (PSL)

K. PSLCs

Query 29: What happens if the RBI inspection team, at a later date, de-classifies the underlying assets which had already been traded by the bank as PSLC, from eligibility for PSL classification?

Clarification: The misclassifications, if any, will have to be reduced from the achievement of PSLC seller bank only. There will be no risk for the PSLC buyer, even if the underlying asset of the traded PSLC gets misclassified.

Query 30: Is the premium payment to be done through the e-Kuber portal or a separate RTGS transaction?

Clarification: There will be a real time settlement of the matched premium. Accordingly, the respective current accounts of the participating banks with RBI will be debited/ credited to the extent of the matched premium.

Query 31: How does the PLSC order matching take place in the e-Kuber portal?

Clarification: The trading platform will match the buy and sell offer by following the Rule of Lowest Sale offer to the Buy offer and then within that on FIFO basis. For example, a buyer offered to pay 2% premium for a particular PSLC type and the same is available at 1.5%, 1.8% and 2%, the portal will first match with the sale deal at 1.5% and for any leftover units, it will then match with the sale offers of 1.8% and then 2% in that order, provided the buy offer is first in the queue (based on the timing of the placement of the buy offer).

Query 32: Will there be automatic matching of PSLC trades on the e-Kuber portal or can the buyer/seller select the counterparty? Will partial matching also happen?

Clarification: The order matching will be done on anonymous basis through the portal and the buyer/seller cannot select the counterparty. Partial matching will happen depending on the matching of premium and availability of category-wise PSLC lots for sale and purchase.

Query 33: What are the timings of PSLC market in the e-Kuber portal?

Clarification: The normal trading hours shall be from 10 AM to 4:30 PM. The PSLC market operates on all days except Saturdays, Sundays and holidays declared under The Negotiable Instruments Act, 1881 by the Government of Maharashtra.

Query 34: What is the methodology to be followed by a bank for PSL classification of lending to eligible entities for on-lending to priority sector?

Clarification: Paras 22, 23 and 24 of the Master Directions on Priority Sector Lending, 2025 permit banks to classify as PSL their lending to NBFCs including HFCs and NBFC-MFIs and other MFIs (Societies, Trusts etc.) which are members of RBI recognised SRO for the sector, for on-lending to eligible priority sectors. Banks may adopt a uniform methodology for PSL classification of on-lending as follows:

a) Classification under PSL:

• The banks can classify on-lending to eligible entities in the respective categories of PSL. The classification will be allowed only when the entity has disbursed the Priority Sector Loans to the ultimate beneficiary after receiving the funds from the bank and the funds remain deployed in PSL assets.

• The entities must provide auditors’ certificate to the banks stating that the individual loans of the portfolio, against which on-lending benefit is being claimed, are not being used to claim benefit from any other bank(s). Also, they must put in place a suitable process to flag such loan(s) in their systems to enable internal/statutory auditors as well as RBI supervisors (in case of NBFCs) to verify the same.

b) Information sharing:

• The banks may devise internal control mechanisms to ensure that the portfolio under on-lending is PSL compliant. The following information/record, at the very minimum, should be collected by the bank from the eligible entities:name of the beneficiary, amount sanctioned, loan amount outstanding, loan tenure, disbursement date, category of PSL.

Query 35: What is the cap for bank lending to NBFCs and HFCs for on-lending?

Clarification: Bank lending to NBFCs (other than MFIs) and HFCs is subject to a cap of 5% of average PSL achievement of the four quarters of the previous financial year. In case of a new bank the cap shall be applicable on an on-going basis during its first year of operations. The prescribed cap is not applicable for bank lending to NBFC-MFIs and other MFIs (Societies, Trusts, etc.) which are members of RBI recognised ‘Self-Regulatory Organisation’ of the sector. Bank lending to such MFIs can be classified under different categories of PSL in accordance with conditions specified in the Master Directions on Priority Sector Lending, 2025.

M. Co-lending by Banks & NBFCs

Query 36: Does co-lending arrangement allow NBFCs to retain 100% of the risk?

Clarification: While the guidelines allow sharing of risks and rewards between the bank and the NBFC for ensuring appropriate alignment of respective business objectives, the priority sector assets on the bank’s books should at all times be without recourse to the NBFC.

Query 37: Are direct assignment of assets applicable only where bank can exercise its discretion?

Clarification: Only if the bank can exercise its discretion regarding taking into its books the loans originated by NBFC as per the agreement, the arrangement will be akin to a direct assignment transaction. If the Agreement entails a prior, irrevocable commitment on the part of the bank to take into its books its share of the individual loans as originated by the NBFC, it shall not be akin to direct assignment transaction.

Query 38: Does the term "mandatorily" in the CLM guidelines mean that the bank must take all the loans originated by the NBFC or can a cap be affixed on the number and amount in the Master Agreement?

Clarification: Both entities, the bank and the NBFC, shall be guided by the bilateral Master Agreement entered by them for implementing the Co-lending Model (CLM). The agreement may specify any cap on the number and amount of loans that can be originated by the NBFC under the Co-lending model.

Query 39: What will be the fate of loans originated by NBFC, which do not qualify under due diligence checks to comply with RBI regulations on KYC and Outsourcing of activities.

Clarification: If the Master Agreement entails a prior, irrevocable commitment on the part of the bank, it has been advised that the partner bank and NBFC shall have to put in place suitable mechanisms for ex-ante due diligence by the bank. Such due diligence should ensure compliance with RBI regulations on KYC and outsourcing of activities before disbursal of the loans by the NBFC.

Query 40: Does the term back-to-back mean loan accounts will first be opened by NBFC and thereafter bank will open loan accounts in its books or both will open loan accounts and fund them simultaneously based on the loan agreement signed by the borrower with the NBFC.

Clarification: Back-to-back basis implies that the loans will be first opened by NBFC and then bank will open loan accounts subsequently.

Query 41: Based on the loan documents executed, will the NBFC sanction and disburse the whole amount and thereafter approach the bank for reimbursement or will it sanction/ disburse its part of the loan and then approach the bank to sanction/ disburse its part.

Clarification: The bank and the NBFC can decide on this aspect as per the Master agreement between them.

N. Shortfall calculation

Query 42: Is the shortfall in achievement of PSL targets for the year calculated based on the PSL loans outstanding as on March 31st of the financial year? +

Clarification: The shortfall/excess in achievement is calculated for each quarter of the financial year. The shortfall/ excess for the year is arrived at by taking a simple average of the shortfall/excess for all the four quarters. In case of shortfall in achievement of overall PSL target or any of the prescribed sub-targets, the bank will be required to contribute to specified funds maintained with NABARD/SIDBI/MUDRA/NHB.

Coordinated Portfolio Investment Survey – India

What to report under CPIS?

Q11. What information should be reported under CPIS? +

Ans: The survey collects details of portfolio investment assets of domestic residents made in securities issued by unrelated non-residents i.e., securities issued by unrelated non-residents and owned by residents.

Government Securities Market in India – A Primer

11. How are the dealing transactions recorded by the dealing desk? +

11.1 For every transaction entered into by the trading desk, a deal slip should be generated which should contain data relating to nature of the deal, name of the counter-party, whether it is a direct deal or through a broker (if it is through a broker, name of the broker), details of security, amount, price, contract date and time and settlement date. The deal slips should be serially numbered and verified separately to ensure that each deal slip has been properly accounted for. Once the deal is concluded, the deal slip should be immediately passed on to the back office (it should be separate and distinct from the front office) for recording and processing. For each deal, there must be a system of issue of confirmation to the counter-party. The timely receipt of requisite written confirmation from the counter-party, which must include all essential details of the contract, should be monitored by the back office. The need for counterparty confirmation of deals matched on NDS-OM will not arise, as NDS-OM is an anonymous automated order matching system. In case of trades finalized in the OTC market and reported on NDS-OM reported segment, both the buying and selling counter parties report the trade particulars separately on the reporting platform which should match for the trade to be settled.

11.2 Once a deal has been concluded through a broker, there should not be any substitution of the counterparty by the broker. Similarly, the security sold / purchased in a deal should not be substituted by another security under any circumstances.

11.3 On the basis of vouchers passed by the back office (which should be done after verification of actual contract notes received from the broker / counter party and confirmation of the deal by the counter party), the books of account should be independently prepared.

Foreign Investment in India

Q.11: Whom to approach for Government approval or in case of doubt regarding the concerned Administrative Ministry/ Department or regarding the classification of an activity or the sectoral route ? +

Answer: Please refer to the ‘Standard Operating Procedure (SOP) for Processing FDI Proposals’ issued by Department of Industrial Policy & Promotion, Government of India → http://fifp.gov.in/Forms/SOP.pdf

Domestic Deposits

I. Domestic Deposits

11. Whether additional interest admissible to bank’s staff can be paid on the compensation awarded by the court to minor child and deposited in the joint name of minor child and parent? +

No. As the money belongs to the minor child and not the bank’s staff, additional interest cannot be paid.

Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999

Eligible entities and requirements to submit the FLA return

Q11. If an entity has not received any inward FDI / made overseas investment in the latest FY, do they need to submit the FLA return? +

Ans: If an entity has not ‘received any fresh FDI and/or ODI (overseas direct investment)’ in the latest FY but has outstanding FDI and/or ODI as at end-March of that financial year, then it is required to submit their outstanding position as on March 31 in the FLA return every year by July 15.

Remittances (Money Transfer Service Scheme (MTSS) and Rupee Drawing Arrangement (RDA))

Money Transfer Service Scheme (MTSS)

11. What are the permissions needed for carrying out MTSS ? +

Indian Agents need permission from the Regional Office concerned of the Foreign Exchange Department, Reserve Bank of India to operate under the MTSS framework. Further, the Overseas Principal also need to obtain necessary authorisation from the Department of Payment and Settlement Systems, Reserve Bank of India under the provisions of the Payment and Settlement Systems Act (PSS Act), 2007.

FAQs on Non-Banking Financial Companies

Exemptions to the companies not accepting public deposits

11. The companies not accepting public deposits and engaged in leasing, hire purchase finance, loan and general investment activities have been exempted from the requirement of capital adequacy but asked to comply with other prudential norms. Why ? +

The prudential norms relating to income recognition, accounting standards, asset classification, provisioning against bad and doubtful debts are the norms which have a bearing on disclosure of true and fair picture of the financial health of the NBFC. These companies normally borrow from other corporate bodies as also from banks and financial institutions. These are also the companies which may commence accepting public deposits at short notice. It is necessary that their Balance Sheets on which all the lenders would rely should be transparent and clean, else these companies would be able to inflate their profits and conceal the decline in the value of their investments as also unprovided NPAs. Such companies might turn out to be potential defaulters in servicing their borrowings from the financial system. The exemptions from capital adequacy and credit/ investment concentration norms have been given because public deposits are not involved.

Business restrictions imposed on Paytm Payments Bank Limited vide Press Releases dated January 31 and February 16, 2024

Paytm Payments Bank Wallet

11. I have a wallet with Paytm Payments Bank. Can I continue to use money from this wallet after March 15, 2024? +

Yes. You can continue to use, withdraw or transfer to another wallet or bank account upto the balance available in the wallet. Minimum KYC wallets can, however, be used only for merchant payments

External Commercial Borrowings (ECB) and Trade Credits

D. RECOGNISED LENDERS/ INVESTORS

11. Individuals can be recognised lenders if they are foreign equity holders or for subscription to bonds/debentures listed abroad. Should such lenders also be from FATF/IOSCO compliant jurisdictions? +

Yes.

Retail Direct Scheme

Account opening related queries

11. Can I open a Retail Direct Gilt (RDG) account if I have already invested in Government securities through other channels? +

Yes.

Biennial survey on Foreign Collaboration in Indian Industry (FCS)

Details of survey launch

Q11. What if the reporting entity does not receive the soft copy of the survey schedule by email? +

Ans.: In case the reporting entity does not receive the soft-form of the survey schedule, they may download the same from RBI website www.rbi.org.in---> ‘Regulatory Reporting’-→ ‘List of Returns’-→ ‘FCS – Survey Schedule’ or Forms→Survey or send a request to the email: fcsquery@rbi.org.in.

Targeted Long Term Repo Operations (TLTROs)

FAQs pertaining to TLTRO 2.0

Q11: Under the TLTRO 2.0 scheme, will the specified eligible instruments have to be acquired up to fifty per cent from primary market issuances and the remaining fifty per cent from the secondary market. Is this limit fungible between primary and secondary market? +

Ans: In order to provide banks flexibility in investment, this condition will not be applicable for funds availed under TLTRO 2.0.

Housing Loans

11. What precautions do you need to take if you are purchasing a property that is not a newly built one? +

Ensure that the documents being provided to you are not colour photocopies. Check the internet for other modus operandi to fraud and ensure clear title to the asset. Seek advice only from authentic sources such as your bank.

Get the no encumbrance certificate to find the true title holder and if it is mortgaged to any financier. Obtain all tax papers to ensure that all documents are up to date.

Indian Currency

B) Banknotes

4. Can banknotes be issued only in these denominations?

Not necessarily. In terms of Section 24 of the Reserve Bank of India Act, 1934, bank notes shall be of the denominational values of two rupees, five rupees, ten rupees, twenty rupees, fifty rupees, one hundred rupees, five hundred rupees, one thousand rupees, five thousand rupees and ten thousand rupees or of such other denominational values, not exceeding ten thousand rupees, as the Central Government may, on the recommendation of the Central Board, specify in this behalf.

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

11. What are the powers of the Reserve Bank with regard to 'Non-Bank Financial Companies’, that is, companies that meet the Principal Business Criteria or 50-50 criteria?

The Reserve Bank has been empowered under the RBI Act 1934 to register, determine policy, issue directions, inspect, regulate, supervise and exercise surveillance over NBFCs that fulfil the principal business criteria or 50-50 criteria of principal business. The Reserve Bank can penalize NBFCs for violating the provisions of the RBI Act or the directions or orders issued by the Reserve Bank under RBI Act. The penal action may also include cancellation of the Certificate of Registration issued to the NBFC.

Core Investment Companies

B. Registration and related matters:

11. A single group is having under its fold four to five prospective Core Investment Companies with an aggregate asset size of more than ₹ 100 crore. In such a situation, which company among the group companies is required to seek registration as CIC with the Bank.

Ans: All companies in the group that are CICs would be regarded as CICs (provided they have accessed public fund) under the extant regulations of Reserve Bank and would be required to obtain a Certificate of Registration from the Bank.

Coordinated Portfolio Investment Survey – India

What to report under CPIS?

Q12. At what value should the portfolio investment assets be reported? +

Ans: The portfolio investment assets are required to be reported on marked to market basis as at the end of the reference period, with the breakups into type of securities viz., equity securities, short-term debt securities (with and original maturity of up to one year) and long-term debt securities (with an original maturity of more than a year) and country of residence of issuer.

Government Securities Market in India – A Primer

12. What are the important considerations while undertaking security transactions?

The following steps should be followed in purchase of a security:

Which security to invest in – Typically this involves deciding on the maturity and coupon. Maturity is important because this determines the extent of risk an investor like an UCB is exposed to – normally higher the maturity, higher the interest rate risk or market risk. If the investment is largely to meet statutory requirements, it may be advisable to avoid taking undue market risk and buy securities with shorter maturity. Within the shorter maturity range (say 5-10 years), it would be safer to buy securities which are liquid, that is, securities which trade in relatively larger volumes in the market. The information about such securities can be obtained from the website of the CCIL (http://www.ccilindia.com/OMMWCG.aspx), which gives real-time secondary market trade data on NDS-OM. Pricing is more transparent in liquid securities, thereby reducing the chances of being misled/misinformed. The coupon rate of the security is equally important for the investor as it affects the total return from the security. In order to determine which security to buy, the investor must look at the Yield to Maturity (YTM) of a security (please refer to Box III under para 24.4 for a detailed discussion on YTM). Thus, once the maturity and yield (YTM) is decided, the UCB may select a security by looking at the price/yield information of securities traded on NDS-OM or by negotiating with bank or PD or broker.
Where and Whom to buy from- In terms of transparent pricing, the NDS-OM is the safest because it is a live and anonymous platform where the trades are disseminated as they are struck and where counterparties to the trades are not revealed. In case, the trades are conducted on the telephone market, it would be safe to trade directly with a bank or a PD. In case one uses a broker, care must be exercised to ensure that the broker is registered on NSE or BSE or OTC Exchange of India. Normally, the active debt market brokers may not be interested in deal sizes which are smaller than the market lot (usually ₹ 5 cr). So it is better to deal directly with bank / PD or on NDS-OM, which also has a screen for odd-lots (i.e. less than ₹ 5 cr). Wherever a broker is used, the settlement should not happen through the broker. Trades should not be directly executed with any counterparties other than a bank, PD or a financial institution, to minimize the risk of getting adverse prices.
How to ensure correct pricing – Since investors like UCBs have very small requirements, they may get a quote/price, which is worse than the price for standard market lots. To be sure of prices, only liquid securities may be chosen for purchase. A safer alternative for investors with small requirements is to buy under the primary auctions conducted by RBI through the non-competitive route. Since there are bond auctions almost every week, purchases can be considered to coincide with the auctions. Please see question 14 for details on ascertaining the prices of the G-Secs.

Foreign Investment in India

Q.12: Whether the definition of Indian company in FEMA 20(R) covers companies incorporated under both the Companies Act, 1956 and Companies Act, 2013 +

Answer: Indian company includes all those entities covered under section 1(4) of the Companies Act, 2013.

Domestic Deposits

I. Domestic Deposits

12. Whether banks are permitted to offer differential rate of interest on other deposits? +

Banks can formulate special fixed deposit schemes specifically for senior citizens offering higher and fixed rates of interest as compared to normal deposits on any size.

Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999

Eligible entities and requirements to submit the FLA return

Q12. Whether FLA return is required to be submitted by Registered Partnership Firms (Registered under Partnership Registration Act) or branches or trustees, who have made Overseas Direct Investment or it is mandatory only for Companies (Registered under Companies Act, 1956)? +

Ans: If the Partnership firms, Branches or Trustees have any outward FDI outstanding as on end-March of the latest FY, then they are required to file the FLA return.

External Commercial Borrowings (ECB) and Trade Credits

E. AVERAGE MATURITY PERIOD

12. How is average maturity period calculated? +

You may refer to /documents/87730/39016390/12EC160712_A6.pdf for illustration purposes.

Remittances (Money Transfer Service Scheme (MTSS) and Rupee Drawing Arrangement (RDA))

Money Transfer Service Scheme (MTSS)

12. What are the types of remittances which can be received under the MTSS ? +

Only cross-border personal remittances, such as, remittances towards family maintenance and remittances favouring foreign tourists visiting India are allowed under this arrangement. Donations/contributions to charitable institutions/trusts, trade related remittances, remittance towards purchase of property, investments or credit to NRE Accounts are not allowed through this arrangement.

FAQs on Non-Banking Financial Companies

Exemptions to the companies not accepting public deposits

12. Core investment companies are required to comply with three basic conditions. What happens if a company complies with two of the three conditions ? +

The investment companies which have at least 90 per cent of their total assets (not total investments alone) in the securities issued by their group/subsidiary/holding companies are the core investment companies. The other two conditions are that they should not accept public deposits and should not trade in these shares. All the three conditions are required to be complied with fully. If any company fails to comply with even one of these three conditions, it is not entitled to the total exemptions from the provisions of Reserve Bank Directions on Acceptance of Public Deposits and Prudential Norms. In such a situation, the company would fall either in the category of public deposit taking company (if it has accepted public deposits) and be subject to all the regulations of RBI or in the category of general investment company and be subject to prudential norms to the extent these are applicable to it.

Business restrictions imposed on Paytm Payments Bank Limited vide Press Releases dated January 31 and February 16, 2024

Paytm Payments Bank Wallet

12. I have a wallet with Paytm Payments Bank. Can I top-up or transfer money into this wallet after March 15, 2024? Can I receive money from any other person into this wallet after March 15, 2024? +

No. After March 15, 2024 you will not be able to top-up or transfer money into the wallet or receive any credits, other than cashbacks, or refunds into this wallet.

Biennial survey on Foreign Collaboration in Indian Industry (FCS)

Some important definitions and concepts

Q12. What is the meaning of Foreign Technical Collaboration? +

Ans.: Indian company which has entered into an agreement with a foreign entity in terms of technology transfer, know-how transfer, use of patent, brand name etc, then such type of agreement are treated as Foreign Technical Collaborations (FTC).

Retail Direct Scheme

Account opening related queries

12. What is the cost of opening and maintaining Retail Direct Gilt (RDG) Account? +

RDG Account can be opened and maintained with RBI free of cost.Know Your Customer (KYC) related queries

Targeted Long Term Repo Operations (TLTROs)

FAQs pertaining to TLTRO 2.0

Q12: The Reserve Bank while announcing the fourth TLTRO on April 15, 2020 advised that the maximum amount that a particular bank can invest in the securities issued by a particular entity or group of entities out of the allotment received by it under the TLTRO shall be capped at 10 per cent. Is this condition also applicable to TLTRO conducted before April 15, 2020? Will this condition apply for deployment of funds under TLTRO 2.0? +

Ans: This condition applies only to the fourth TLTRO conducted on April 17, 2020. It does not apply to the TLTROs conducted before April 17, 2020. It also does not apply to TLTRO 2.0.

Housing Loans

12. What should be your strategy in dealing with the banks? +

Give yourself comfortable time. Do not hurry your purchase or loan in any case. Shopping around for a home loan will help you to get the best financing deal. Shopping, comparing, seeking clarification and negotiating with banks may save you thousands of rupees.

a) Obtain information from several banks

Home loans are available from mainly two types of lenders--commercial banks and housing finance companies. Different lenders may quote you different rates of interest and other terms and conditions, so you should contact several lenders to make sure you’re getting the best value for money.

Find out how much of a down payment you are required to pay, and find out all the costs involved in the loan (including processing fees, administrative charges and prepayment charges levied by banks). Knowing just the amount of the EMI or the interest rate is not good enough. Similarly, ask for information on loan amount, loan term, and type of loan (fixed or floating) so that you can compare the information and take an informed decision.

The following is some important information that you will require.

i) Rates

Ask your lender about its current home loan interest rates and whether the rate is fixed or floating. Remember that when interest rates in the economy go up so does the floating rates and hence the monthly re-payment.

If the rate quoted is a floating rate, ask how your rate and loan payment will vary, including the extent to which your loan payment will be reduced when rates go down by a certain percentage. Ask your lender to what index your floating home loan is referenced / linked and the periodicity of updation of that index. Also ask your bank whether the index is internal or external and how and where it is published.

Ask about the loan’s annual percentage rates (APR). The APR takes into account not only the interest rate but also fees and certain other charges that you may be required to pay, expressed as a yearly rate. Banks are obliged to reveal the APR if requested for by the customer.

ii) Reset Clause

Check the reset clause, especially in the case of fixed interest rate loan as the rates will not be fixed throughout the tenure of the loan.

iii) Spread/Mark up

Check if the margin in the case of the floating rate is fixed or variable. The rate of interest you have to pay will vary accordingly.

iv) Fees

A home loan often requires payment of various fees, such as loan origination or processing charges, administrative charges, documentation, late payment, changing the loan tenure, switching to different loan package during the loan tenure, restructuring of loan, changing from fixed to floating interest rate loan and vice versa, legal fee, technical inspection fee, recurring annual service fee, document retrieval charges and pre-payment charges, if you want to prepay the loan. Every lender should be able to give you an estimate of its fees. Many of these fees are negotiable / can be waived also.

Ask what each fee includes. Sometimes several components are lumped into one fee. Ask for an explanation of any fee you do not understand. Also, remember that most of these fees are perhaps negotiable! Do negotiate with your bank before agreeing to a particular fee. See how the all inclusive rate compares with the all inclusive rates offered by other banks. While planning your finances, don't forget to include the costs of stamp duty and registration.

v) Down Payments / Margin

Some lenders require 20/30 percent of the home’s purchase price as a down payment from you. However, many lenders also offer loans that require less than 20/30 percent down payment, sometimes as little as 5 percent .Ask about the lender’s requirements for a down payment and also negotiate with him to reduce the down payments.

b) Obtain the best deal

Once you know what each bank has to offer in terms of rates, fees and down payments, negotiate for the best deal. Ask the lender to write down all the costs associated with the loan. Then ask if the bank will waive or reduce one or more of its fees or agree to a lower rate. Do make sure that the bank is not agreeing to lower one fee while raising another or to lower the rate while raising the fees. Ask for clarification in case you do not understand any particular term. All banks are obliged to explain the most important terms and conditions of the home loan in detail.

Once you are satisfied with the terms you have negotiated, please do obtain a written offer letter from the lender and keep a copy with you. Read the offer letter carefully before signing.

Indian Currency

B) Banknotes

5. What is the highest denomination note ever printed?

The highest denomination note ever printed by the Reserve Bank of India was the ₹10000 note in 1938 which was demonetized in January 1946. The ₹10000 was again introduced in 1954. These notes were demonetized in 1978.

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

12. What action can be taken against persons/financial companies making false claim of being regulated by the Reserve Bank? +

It is illegal for any person/ entity/ financial company to make a false claim of being regulated by the Reserve Bank to mislead the public to collect deposits and is liable for penal action under the Law. Information in this regard may be forwarded to the nearest office of the Reserve Bank and the Police.

Core Investment Companies

B. Registration and related matters:

12. A single group is having under its fold various prospective Core Investment Companies with an aggregate asset size of more than ₹ 100 crore. One of the entities has raised / holds public funds (one of the prerequisites for qualifying as a CIC). In such a situation, whether every CIC within the group or only the parent CIC or the specific entity that has raised/ holds public funds would be regarded as CIC, and thus would be required to seek registration as CIC with the Bank.
For Example: HCo is the parent group CIC holding 100 per cent equity capital of A, B and C, all of which are also CICs . In case C has accessed public funds, whether HCo as well as A, B and C must seek registration as CIC or will just C need registration?

Ans: In such a case only C will be registered, provided C is not funding any of the other CICs either directly or indirectly. HCo as well as A and B would not require registration as they neither access public funds directly nor access public funds indirectly through C.

Coordinated Portfolio Investment Survey – India

What to report under CPIS?

Q13. What is the unit of reporting the data in CPIS? +

Ans: Reporting entities should report the data in the unit mentioned in the survey schedule (for eg., INR Lakh).

Foreign Investment in India

Q.13: Whether the percentage of foreign investment should be calculated at the time of issuance of Employee Stock Options (ESOP) or vesting stage or exercising stage ? +

Answer: Foreign investment percentage has to be calculated on a fully diluted basis i.e. at the time of issuance of Employee Stock Options.

Domestic Deposits

I. Domestic Deposits

13. Whether banks can open savings bank accounts in the name of Government Departments/ Government Scheme? +

Savings bank account cannot be opened in the name of the Government Department/ Government Scheme, except in respect of deposits of Government organizations/ agencies listed below:

Primary Co-operative Credit Society which is being financed by the bank.
Khadi and Village Industries Boards.
Agriculture Produce Market Committees.
Societies registered under Societies Registration Act, 1860 or any other corresponding law in force in State or a Union Territory.
Companies governed by the Companies Act, 1956 which have been licensed by the Central Government under Section 25 of the said Act, or under the corresponding provision in the Indian Companies Act, 1913 and permitted, not to add to their names the word “Limited” or the words “Private Limited”.
Institutions other than those mentioned in clause (i) above and whose entire income is exempt from payment of income tax under Income-Tax Act, 1961.
Government departments/ bodies/ agencies in respect of grants/ subsidies released for implementation of various programmes/ Schemes sponsored by Central Government/ State Governments subject to production of an authorisation from the respective Government departments to open savings bank accounts.
Development of Women and Children in Rural Areas (DWCRA).
Self-help Groups (SHGs), registered or unregistered, which are engaged in promoting savings habits among their members.
Farmers’ Clubs – Vikas Volunteer Vahini (VVV).

Remittances (Money Transfer Service Scheme (MTSS) and Rupee Drawing Arrangement (RDA))

Money Transfer Service Scheme (MTSS)

13. Is there any limit on the amount of money which can be sent under MTSS ? +

A cap of USD 2,500 has been placed on individual remittances under the scheme. In addition, thirty remittances can be received by a single individual beneficiary under the scheme during a calendar year.