New FAQ Page 2

RbiAnnouncementWeb

FAQ DetailPage Breadcrumb

Search Bar

Search Results

FAQs on Resolution Framework for Covid-19 related stress (Revised on December 12, 2020) (Updated as on August 19, 2022)

PDF (239940)

UPDATED: Aug 19, 2022

1. In Paragraph 4 of the Annex to the Resolution Framework, it is stated that the reference date for the outstanding amount of debt that may be considered for resolution shall be March 1, 2020. Does this mean that only debt outstanding as on March 1, 2020 can be resolved under the Resolution Framework? +

The stipulation at Paragraph 4 of the Annex to the Resolution Framework is a general clause regarding the date on which the eligibility criteria for resolution under the Resolution Framework may be assessed. The specific application of the reference date with respect to deciding the eligibility of accounts for resolution under Part A and Part B of the Annex to the Resolution Framework have been separately specified in Paragraphs 6 and 13 respectively, i.e, the requirement that the borrowers should be classified as standard, but not in default for more than 30 days with any lending institution as on March 1, 2020. The actual debt that may be considered for resolution will be the outstanding as on the date of invocation.

[Master Directions on Fraud Risk Management in REs were issued on July 15, 2024]

Q.1 The Master Directions on Fraud Risk Management inter alia require Regulated Entities (REs) to constitute a Special Committee of the ‘Board for Monitoring and Follow-up of cases of Frauds’ (SCBMF) or a ‘Committee of the Executives’ (CoE), as the case may be. What should be the threshold amount of fraud for placing the cases before such Committee?

Ans: As mentioned under Chapter II of the Master Directions, the coverage and periodicity of reviews conducted by SCBMF / CoE shall be decided by the Board of the REs. Accordingly, the threshold amount of fraud cases to be placed before the SCBMF / CoE shall be decided by the Board of the REs, after duly taking into account the scale and complexity of their operations.

Q1. What is Know Your Customer (KYC)?

Ans. KYC is a process by which a Regulated Entity (RE), including a bank, obtains information on identity and address of the customer, nature of business and financial status of a customer and, verifies the same. This process helps to ensure that an RE is aware of the customer it is dealing with, and the services provided by the RE are not misused for Money Laundering/ Terrorist Financing/ Proliferation Financing (ML/TF/PF) purposes.

1. What is an Automated Teller Machine (ATM)?

Ans. An ATM is a computerised machine that provides customers of banks the facility of accessing their accounts for dispensing cash and to carry out other financial & non-financial transactions without the need to visit the bank branch.

Reserve Bank of India (RBI) integrated its three erstwhile Ombudsman Schemes viz. (i) the Banking Ombudsman Scheme, 2006, (ii) the Ombudsman Scheme for Non-Banking Financial Companies, 2018, and (iii) the Ombudsman Scheme for Digital Transactions, 2019, into one Scheme - ‘The Reserve Bank - Integrated Ombudsman Scheme, 2021 (the Scheme / RB-IOS, 2021)’ with effect from November 12, 2021. The Scheme simplifies the grievance redress process at RBI by enabling the customers of Regulated Entities (REs) like banks, Non-Banking Financial Companies (NBFCs), Payment System Participants (PSPs) and Credit Information Companies to register their complaints at one centralised reference point. The objective of the Scheme is to resolve the customer grievances involving ‘deficiency in service’ on part of REs in a speedy, cost-effective and satisfactory manner. These FAQs provide information on RB-IOS, 2021 and related aspects.

1. What is RB-IOS, 2021? +

The Reserve Bank - Integrated Ombudsman Scheme, 2021 (RB-IOS, 2021/ the Scheme) was launched on November 12, 2021. It integrates the erstwhile three Ombudsman schemes of RBI namely, (i) the Banking Ombudsman Scheme, 2006; (ii) the Ombudsman Scheme for Non-Banking Financial Companies, 2018; and (iii) the Ombudsman Scheme for Digital Transactions, 2019. These schemes had limited and different grounds of complaints and limited coverage of REs, apart from jurisdiction related restrictions. RB-IOS, 2021 provides for cost-free redress of customer complaints involving deficiency in services rendered by entities regulated by RBI, if not resolved to the satisfaction of the customers or not replied to within a period of 30 days by the RE.

In addition to integrating the three existing schemes, the Scheme also includes under its ambit additional REs, namely, Non-Scheduled Primary (Urban) Co-operative Banks with a deposit size of ₹50 crore and above and Credit Information Companies. The Scheme adopts ‘One Nation One Ombudsman’ approach by making the RBI’s Ombudsman mechanism jurisdiction neutral.

1. What should a customer do if a credit card is issued without his/her consent (unsolicited card)?

Response: Card issuers are prohibited from issuing unsolicited credit cards and are required to seek prior and explicit consent from the customer before issuing a card. However, if the customer receives an unsolicited card, he/she should refrain from activating or providing consent for activation of card through OTP or any other means. If no consent is received for activating the card, the card-issuer is required to close the credit card account without any cost to the customer within seven working days from the date of seeking confirmation from the customer and shall also intimate the customer that the credit card account has been closed. Subsequent to receiving the intimation from the card-issuer that the card account has been closed, the customer shall destroy the card. Further, the customer may file a complaint with the card-issuer against the issuance of unsolicited card and escalate it to the RBI Ombudsman as per Integrated Ombudsman Scheme (please refer to the response of query 17 below).

(Usage of e₹ is currently being pilot tested in the form of some studies in the country. The pilot is being tried in the Retail (public) and Wholesale (bank and other institutions) segments.

A. Retail CBDC

1. What is Digital Rupee?

Ans: Digital Rupee or e₹, is India’s Central Bank Digital Currency (CBDC). It is the digital form of India’s physical currency, the Rupee (₹). e₹ is issued by the Reserve Bank of India (RBI) in digital form and offers features similar to physical cash like convenience of use, guarantee of RBI, finality of settlement, etc. e₹ is stored in the user’s digital wallet and can be used to receive / send money, and / or make payment for transactions, just like any physical ₹ note.

The logo and tagline for India’s CBDC is as under:

(Reference Circular: DoR.MCS.REC.28/01.01.001/2023-24 dated August 18, 2023 and DoR.MCS.REC.61/01.01.001/2023-24 dated December 29, 2023)

1. Para 3(viii) of the circular specifies that in the case of existing loans, the switchover to new penal charges regime shall be ensured on next review or renewal date or six months from the effective date of the circular, whichever is earlier. Whether such date of next review or renewal can be counted only after the effective date or even before the effective date if the accounts are subjected to review/ renewal?

In case of existing loans as well, the instructions shall come into effect from April 1, 2024 and the switchover to new penal charges regime shall be ensured on the next review / renewal date falling on or after April 1, 2024, but not later than June 30, 2024.

Q.1 Does the circular apply to all loan products or only to Personal Loans?

Ans: The circular is applicable to all equated periodic instalment based personal loans only. The circular is not applicable to other types of loans. The Reserve Bank circular DBR.No.BP.BC.99/08.13.100/2017-18 on “XBRL Returns – Harmonization of Banking Statistics” dated January 04, 2018 may be referred for the definition of personal loans.

Q.2. Who can apply for compounding? +

Ans. Any person who contravenes any provision of the FEMA, 1999 [except section 3(a)] or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act or contravenes any condition subject to which an authorization is issued by the Reserve Bank, can apply for compounding to the Reserve Bank. Applications seeking compounding of contraventions under section 3(a) of FEMA, 1999 may be submitted to the Directorate of Enforcement (DOE).