Ans: The ‘outstanding amount’ to be displayed on the website of the RE shall be as per definition provided under Section 13 (9) (b) of the SARFAESI Act, 2002 i.e. it shall include principal, interest and any other dues payable by the borrower to the secured creditor in respect of secured asset as per the books of account of the secured creditor.

In terms of para 3(i) of the circular, the prescribed guidelines will not affect the normal procedures for compounding of interest in the loan account. Therefore, REs may charge interest on unpaid interest (including on unpaid EMI) at the contracted rate of interest till the date of remediation, and not at the penal rate of interest.

No, SEZ Units cannot open EEFC Accounts. However, a unit located in a Special Economic Zone can open a Foreign Currency Account with an Authorised Dealer in India subject to conditions stipulated in Regulation 4 (D) of Foreign Exchange Management (Foreign Currency Accounts by a person Resident in India) Regulations dated January 21, 2016.

Person going abroad for employment can draw foreign exchange upto US$5,000 from any authorised dealer in India.

1. Any clarification in respect of specific cases could be obtained from the Reserve Bank’s Central office at the following address:

Overseas Investment Division,
Exchange Control Department,
Central office,
Reserve Bank of India,
Mumbai 400001.
or
e-mail: oid@rbi.org.in

An application for repatriation of balance may be made on plain paper to the concerned Regional Office of Reserve Bank.

Remittance of partly paid invoices is permissible, subject to total remittance not exceeding the amount indicated in the invoice. In terms of the extant guidelines, although the advertisement charges can be accepted in advance, along with the text of the advertising matter, by the Indian channel agent, the remittance can be made by the AD, only after the advertisements are telecast abroad and invoices raised thereafter, and subject to submission of the requisite documents as stated at (4) above such as invoice, tax declaration/deduction certificate, certificate from Chartered Accountant regarding foreign exchange earning in the past 2 years.

In terms of GOI notification No.SO.301(E) dated March 30, 2001, banks are free to allow remittance for maintenance of close relatives abroad not exceeding net salary (after deduction of taxes, contribution to provident fund and other deductions) of a person who is resident but not permanently resident in India and is a citizen of a foreign state other than Pakistan. Therefore, independent of QA 22 procedure, they may allow remittance of net salary.

Banks generally offer either of the following loan options: Floating Rate Home Loans and Fixed Rate Home Loans. For a Fixed Rate Loan, the rate of interest is fixed either for the entire tenure of the loan or a certain part of the tenure of the loan. In case of a pure fixed loan, the EMI due to the bank remains constant. If a bank offers a Loan which is fixed only for a certain period of the tenure of the loan, please try to elicit information from the bank whether the rates may be raised after the period (reset clause). You may try to negotiate a lock-in that should include the rate that you have agreed upon initially and the period the lock-in lasts.

Hence, the EMI of a fixed rate loan is known in advance. This is the cash outflow that can be planned for at the outset of the loan. If the inflation and the interest rate in the economy move up over the years, a fixed EMI is attractively stagnant and is easier to plan for. However, if you have fixed EMI, any reduction in interest rates in the market, will not benefit you.

Determinants of floating rate:

The EMI of a floating rate loan changes with changes in market interest rates. If market rates increase, your repayment increases. When rates fall, your dues also fall. The floating interest rate is made up of two parts: the index and the spread. The index is a measure of interest rates generally (based on say, government securities prices), and the spread is an extra amount that the banker adds to cover credit risk, profit mark-up etc. The amount of the spread may differ from one lender to another, but it is usually constant over the life of the loan. If the index rate moves up, so does your interest rate in most circumstances and you will have to pay a higher EMI. Conversely, if the interest rate moves down, your EMI amount should be lower.

Also, sometimes banks make some adjustments so that your EMI remains constant. In such cases, when a lender increases the floating interest rate, the tenure of the loan is increased (and EMI kept constant).

Some lenders also base their floating rates on their Benchmark Prime Lending Rates (BPLR). You should ask what index will be used for setting the floating rate, how it has generally fluctuated in the past, and where it is published/disclosed. However, the past fluctuation of any index is not a guarantee for its future behavior.

Flexibility in EMI:

Some banks also offer their customers flexible repayment options. Here the EMIs are unequal. In step-up loans, the EMI is low initially and increases as years roll by (balloon repayment). In step-down loans, EMI is high initially and decreases as years roll by.

Step-up option is convenient for borrowers who are in the beginning of their careers. Step-down loan option is useful for borrowers who are close to their retirement years and currently make good money.

No specific Technology, Vendor, Service Provider or Process has been recommended for achieving ADF and it has been left to the banks to decide on these issues on the basis of internal requirements.

Ans. Yes, these terms are defined in Section 2 (1) of the PSS Act, 2007.

The charges levied by banks for collection of such USD denominated cheques are dependent on the type of collection arrangement chosen by customers and the number of intermediaries (correspondent banks) involved in the collection process. Each of the CBs will levy their own charges for facilitating the process of collection. All these charges will be in turn levied by the collecting banks in India from the customers. The customer’s account is credited net of collection charges (proceeds minus collection charges)

Like in most countries, banks in India also are required to develop their own individual policy / procedures relating to collection of cheques. The customer is entitled to receive due disclosures from the bank on the bank's obligations and the customers' rights.

Broadly, the policies formulated by banks should cover the following areas:

Immediate credit for local / outstation cheques, Time frame for collection of local / outstation instruments and compensation payable for delayed collection.

The CCPs of various banks are made available on the website of respective bank.

Banks are obliged to disclose their liability to customers by way of compensation / interest payments due to delays for non-compliance with the standards set by the banks themselves. The customer has to be compensated by way of compensation/interest payment even if no formal claim is lodged to the effect.

The Public Debt Act, 1944 shall cease to apply to the Government securities to which the G S Act applies, while the Indian Securities Act, 1920 has been repealed.

Ans : NBFCs desirous of sponsoring IDF-MFs are required to comply with the following requirements :

• The NBFC should have a minimum Net Owned Funds (NOF) of Rs.300 crore; and Capital to Risk Weighted Assets (CRAR) of 15%;

• its net NPAs should be less than 3% of net advances;

• it should have been in existence for at least 5 years;

• it should be earning profits for the last three years and its performance should be satisfactory;

• the CRAR of the NBFC post investment in the IDF-MF should not be less than the regulatory minimum prescribed for it;

• The NBFC should continue to maintain the required level of NOF after accounting for investment in the proposed IDF and

• There should be no supervisory concerns with respect to the NBFC.

On behalf of GAH, PM needs to submit an access request form to CCIL. The Request would be formally addressed to RBI. However, CCIL has been authorized to directly receive and process Access Request Form from PM for operational convenience. A detailed operation flow is contained in Annexure I.

Ans. Yes.  An entity not registered with the Bank may not conduct the business of factoring unless it is an entity mentioned in Section 5 of the Act i.e. a bank or any corporation established under an Act of Parliament or State Legislature, or a Government Company as defined under section 617 of the Companies Act, 1956.

A sub-target of 7.5% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposure (CEOBE), whichever is higher, towards lending to the Micro-enterprises under overall Priority Sector Lending has been prescribed for Domestic commercial banks, Foreign banks with 20 branches and above, Regional Rural Banks and Small Finance Banks.

• Index ratio (IR) will be calculated by dividing the reference WPI on the settlement date with the reference WPI on the issue date.

• The formula for the same is as under:

1. Yes, the green activities/ projects financed under the framework can be classified under priority sector if they meet the requirements laid down in priority sector lending (PSL) guidelines of RBI [Master Directions FIDD.CO.Plan.BC.5/04.09.01/2020-21 dated September 04, 2020] as amended from time to time.

2. As the activities/ projects listed in the framework are the same as indicated in Sovereign Green Bonds (SGrBs) framework, investment by REs in SGrBs are covered under the framework.