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Clarifications relating to remittance for advertisement on foreign television, print media and Internet (As on May 31, 2003)

Who is eligible to advertise in Print Media abroad or on Internet? +

Firms/companies/organizations, as well as banks/financial institutions in India, are free to advertise in Print Media abroad, such as overseas newspapers/periodicals or on Internet.

6. What is a “Payment Obligation”? +

Ans. “Payment obligation” is defined as what is owed by one participant in a payment system to another such participant which results from clearing or settlement or payment instructions relating to funds, securities or foreign exchange or derivatives or other transactions.

6. Are US regulations applicable to USD cheque collection? +

The basic legal framework for determining rights, responsibilities and liabilities of the parties in connection with collection of USD denominated cheques drawn on US banks are governed by the legal framework as laid down under the US federal and state laws like Uniform Commercial Code (UCC) etc. However, in the event of return of a counterfeit cheque handled through this process, the drawee bank in the US has the right to recover the proceeds from presenting banks within the period stipulated under US Clearing House guidelines.

6. How bank are supposed to disclose their policies ? +

Customer has the right to know the CCP of the bank before entering into any transaction.

The bank is obliged to disclose the amount up to which immediate credit of outstation cheque is offered in its Comprehensive Notice Board, which is to be displayed at each and every branch of the bank. The bank is also required to disclose time frame for collection of local / outstation instruments and policy for compensation payable for delayed collection. The same will be available in the Information Booklets which should be available at all the bank branches. The customer is also entitled to receive a copy of the bank’s CCP, if (s)he so desires. Banks are also required to put up their CCP on their websites.

Q6. What are the eligibility criteria for IFCs for sponsoring IDF-NBFCs? +

Ans : NBFC-IFC will need to meet the following conditions for sponsoring an IDF-NBFC :

Sponsor IFCs would be allowed to contribute a maximum of 49 percent to the equity of the IDF-NBFCs with a minimum equity holding of 30 percent of the equity of IDF-NBFCs,:
Post investment in the IDF-NBFC, the sponsor NBFC-IFC must maintain minimum CRAR and NOF prescribed for IFCs
There are no supervisory concerns with respect to the IFC.

Q.6. If a company does not fulfill the principal business criteria for factoring and has no intention of getting itself registered as a Factor with the Bank, can it continue to do factoring activities with its group entities. +

Ans : No. As per Section 3 of the Factoring Act 2011, no Factor can commence or carry on the factoring business without a) obtaining a CoR from the Reserve Bank, b) fulfilling the principal business criteria.

6. Can the ATS application be transferred to any other office / department / section ? +

Yes. The applicant will immediately receive a mail conveying details of the original office / department where the application was submitted and the details of the office / department / section to which it has been transferred. The information can also be ascertained through ATS by the applicant under ’My Application’. The entire history will be shown.

Q.6. How do banks assess the working capital requirements of borrowers ? +

Banks have been advised to put in place loan policies governing extension of credit facilities for the MSE sector duly approved by their Board of Directors (Refer circular RPCD.SME & NFS.BC.No.102/06.04.01/2008-09 dated May 4, 2009). Banks have, however, been advised to sanction limits after proper appraisal of the genuine working capital requirements of the borrowers keeping in mind their business cycle and short-term credit requirement. As per Nayak Committee Report, working capital limits to SSI units is computed on the basis of minimum 20% of their estimated turnover up to credit limit of ₹5 crore.

6. Why will final WPI be used with a lag of four months? +

Final monthly WPI will be used as reference WPI for 1st day of the calendar month. The reference WPI for intermittent days, i.e. dates between 1st days of the two consecutive months will be computed through interpolation.
For interpolation, two months final WPI should be available throughout the month. As final WPI is available with a lag of about two and half months (e.g. final WPI February 2013 will be released in mid-May 2013), two months final WPI could be available only with a lag of four months.
In view of above, the four months lag has been chosen for final WPI to be considered as reference WPI for 1st day of the calendar month. For example, December 2012 final WPI will be taken as reference WPI for 1st of May 2013 and January 2013 final WPI will be taken as reference WPI for 1st of June 2013.

6. Can banks allow overdraft facility to customers against Green Deposits?

Banks are allowed to offer overdraft facility to customers against Green Deposits subject to the instructions contained in the Consolidated Circular on Opening of Current Accounts and CC/OD Accounts by Banks dated April 19, 2022, as amended from time to time.

6. The principal for the IIBs is supposed to be indexed to the increase in the inflation as worked out by multiplication of the “Index Ratio” with the face value of the bond. Once the bond starts trading in the market after the auction, the index ratio will be changing daily and so also, the principal amount on which the fixed coupon will be accruing of the bond. Kindly clarify how to account for the principal and the interest for an IIB purchased in the secondary market. +

Ans: Answers as given in Q 1 and Q 3.

6. How much exchange is available for studies outside India? +

Students going abroad for studies are treated as Non-Resident Indians (NRIs) and are eligible for all the facilities available to NRIs under FEMA. In addition, they can receive remittances upto USD 100,000 from close relatives from India on self-declaration, towards maintenance, which could include remittances towards their studies also. Educational and other loans availed of by students as resident in India can be allowed to continue. There is no dilution in the existing remittance facilities to students in regard to their academic pursuits.

6. Does the DICGC insure just the principal on an account or both principal and accrued interest ? +

The DICGC insures principal and interest upto a maximum amount of ₹ five lakhs. For example, if an individual had an account with a principal amount of 4,95,000 plus accrued interest of 4,000, the total amount insured by the DICGC would be 4,99,000. If, however, the principal amount in that account was five lakhs, the accrued interest would not be insured, not because it was interest but because that was the amount over the insurance limit.

6. Who can avail NEFT system for fund transfer / receipt? +

Ans: Individuals, firms and corporates maintaining accounts with any member bank, participating in the NEFT system, can electronically transfer funds to any individual, firm or corporate having an account with any other bank in the country participating in the NEFT system.

The list of bank-wise branches participating in NEFT is available on the website of RBI at /en/web/rbi/-/list-of-neft-enabled-bank-branches-bank-wise-indian-financial-system-code-updated-as-on-june-30-2023-2009-1.

Q.6. Any limit on the amount of individual transaction? +

Ans There is no value limit for individual transactions.

Q 6. How should credit facilities not having an EMI feature be treated for arriving at total monthly repayment obligations of the household? +

Ans. Board-approved policies of REs should cover such operational aspects. One possible way could be to distribute the annualized repayment obligations over twelve months to estimate monthly outgo of the household towards debt repayment.

6. Are Relief/Savings Bonds also Government securities? Does the G S Act and the G S Regulations apply to them as well? +

Yes. Relief/Savings Bonds are also Government securities. They are issued in the form of Stock Certificate and BLA by the RBI and in the form of BLA by the Agency Banks. All the provisions of the G S Act and the G S Regulations apply to them as well. However, Relief/Savings Bonds may have certain features of their own as per the specific Government Loan Notification announcing their issue. For example, Savings Bonds are not transferable except as explained at Question No. 46 below.

6. Can a resident continue to maintain an account outside India which was opened by him when he was a non-resident? +

Answer: A person resident in India may maintain a foreign currency account outside India if he had opened it when he was resident outside India or inherited it from a person resident outside India.

6. What will I get on redemption? +

On redemption, investors will get principal and compounded interest.

6. আরবিআই দ্বারা কয়টি পিপিআই জারি করার সংস্থা অনুমোদিত হয়েছে ? কোথায় আমি ব্যাংকের দ্বারা অনুমোদিত ব্যাংক এবং অ-ব্যাংক PPI জারিকর্তার তালিকা পেতে পারি? +

উত্তর. আরবিআই ওয়েবসাইটে এই তালিকাটি আছে এই লিংকে : https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=12043 এবং https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=2491.