New FAQ Page 2 - RBI - Reserve Bank of India
Banking Ombudsman Scheme, 2006
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As IIBs are G-Sec, they can be tradable in the secondary market like other G-Secs. Investors will be able to trade them in NDS-OM, NDS-OM (web-based), OTC market, and stock exchanges.
Response
The services available free in the 'Basic Savings Bank Deposit Account’ will include deposit and withdrawal of cash; receipt / credit of money through electronic payment channels or by means of deposit / collection of cheques at bank branches as well as ATMs.
Ans. No
- Customers can approach any of the authorised banks, including SHCIL for such investment irrespective of whether they hold an account or not with that bank.
Ans. In addition to extant regulatory requirements for authorised non-bank PSPs, supervisory assessments will include compliance with regulatory requirements as laid out in:
Master Directions on Access to Payment Systems;
RTGS System Regulations; and
NEFT Procedural Guidelines.
Ans. Annex I provides only an indicative methodology for assessment of household income, and REs are required to put in place a board-approved policy for household income assessment. References to household expenses and assessment of household profile are only for the purpose of validation of the household income reported by the borrowers.
Ans. Eligibility criteria for the purpose of setting up and operating a TReDS platform is provided in the guidelines (as amended from time to time) for TReDS issued by RBI. These guidelines are available at the following path: www.rbi.org.in → “Payment and Settlement Systems” dropdown →“Guidelines”. RBI’s Press Release dated October 15, 2019 may also be read in this regard. The same can be accessed at the following web links: /en/web/rbi/-/guidelines-for-the-trade-receivables-discounting-system-treds-3504 and /en/web/rbi/-/press-releases/on-tap-authorisation-of-payment-systems-48405
Ans. Transactions in RTGS happen in real time and it is not possible to match name and account number before affording credit to the beneficiary. Since name in the Indian context is spelt differently and would not really match with that available with the beneficiary bank, the process of affording credit solely based on the account number of the beneficiary has been enabled.
Our Circular Ref. No. DPSS (CO) EPPD No. / 863 / 04.03.01 / 2010-11 dated October 14, 2010 on ‘Electronic payment products – Processing inward transactions based solely on account number information’ (available at https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6043&Mode=0) may be referred to for further details.
Response: Yes, the liability for dues shall rest solely with the principal cardholder and not with the add-on cardholders. However, settlement of dues towards international credit card shall also be governed as per FEMA regulations. Further, the responsibility for making payments in case of business credit cards shall be governed by the terms and conditions agreed upon.
Ans. The individual will have to designate a branch of an AD through which all the capital account remittances under the Scheme will be made. The applicants should have maintained the bank account with the bank for a minimum period of one year prior to the remittance.
For remittances pertaining to permissible capital account transactions, if the applicant seeking to make the remittance is a new customer of the bank, Authorised Dealers should carry out due diligence on the opening, operation and maintenance of the account. Further, the AD should obtain bank statement for the previous year from the applicant to satisfy themselves regarding the source of funds. If such a bank statement is not available, copies of the latest Income Tax Assessment Order or Return filed by the applicant may be obtained. He has to furnish Form A-2 regarding the purpose of the remittance and declare that the funds belong to him and will not be used for purposes prohibited or regulated under the Scheme.
Ans: In case of CNP transactions, RBI has mandated providing AFA for domestic transactions. If a transaction has taken place without AFA and the customer has complained that the transaction is not effected by her / him, the issuer bank shall reimburse the loss to the customer without demur. Further, liability of a customer in case of an unauthorised electronic payment transaction is limited as per the provisions of RBI circulars DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 6, 2017, DCBR.BPD.(PCB/RCB).Cir.No.06/12.05.001/2017-18 dated December 14, 2017, and para 17 of Master Directions on PPIs dated August 27, 2021 (updated as on November 12, 2021).
Ans.: If the company’s accounts are not audited before the due date of submission, i.e., July 15, then the MF survey schedule should be submitted based on unaudited (provisional) account.
No. The current framework permits green deposits to be denominated in Indian Rupees only.
Answer: The exchange rate for most currencies are determined in the Forex markets, typically against global currencies like the USD, EUR, JPY etc. In the transition phase, when there is no market with direct exchange rates between two currencies (say INR and Sri Lankan Rupee), the exchange rate between the currencies of two trading partner countries, each of which has markets against global currencies, would be derived as a cross currency rate.
Answer:
• OTC derivatives
- For retail users
- Foreign Exchange Forward
- Foreign Exchange Swap
- Currency Swap
- Purchase of Call and Put Options
- Purchase of Call and Put Spreads
- For non-retail users: All foreign exchange products permitted to be offered to retail users, covered options, option to undertake / cancel a foreign exchange forward / foreign exchange swap / currency swap / foreign exchange option and any other foreign exchange derivative contract including derivatives having cash instrument(s) and/or permitted derivative(s) as components, but excluding leveraged derivatives and derivatives containing a derivative instrument as underlying other than those specifically permitted.
• Exchange traded derivatives
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Foreign Exchange Future
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Foreign Exchange Option
Ans: The Guidelines are applicable to all transactions meeting the definition of ‘Digital Lending’ as per Digital Lending Guidelines.
Ans. The Compounding Authority passes an order indicating details of the contravention and the provisions of FEMA, 1999 that have been contravened. The compounding amount is indicated in the compounding order. The process of compounding is brought to a conclusion by payment of the compounding amount indicated in the compounding order.
Answer: Resident and Non-resident acquirers can open Escrow Account in INR with an AD bank in India as the Escrow Agent, for acquisition/transfer of capital instruments/convertible notes in accordance with Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 as amended from time to time and subject to the terms and conditions specified under Schedule 5 of Foreign Exchange Management (Deposit) Regulations, 2016, as amended from time to time.
Ans. Yes. In terms of paragraphs 15, 18 and 27 of Master Direction- Reserve Bank of India (Interest Rate on Deposits) Directions, 2025, banks can levy penalty for premature withdrawal as per the comprehensive policy approved by their Board of Directors. The components of penalty should be clearly brought to the notice of the depositors at the time of acceptance of deposits.
Ans: DLG arrangements are not permitted on the loans which are covered by the credit guarantee schemes administered by trust funds as specified under para 2 of Review of Prudential Norms – Risk Weights for Exposures guaranteed by Credit Guarantee Schemes (CGS) dated September 07, 2022, as amended from time to time.
Note: Illustrations are provided for ease of understanding and are merely indicative and not exhaustive.
Illustration 1
Assume that as on April 1, 2024 the RE earmarks a portfolio of ₹40 crore (out of the total sanctioned loans) under a DLG arrangement (DLG set). This portfolio shall remain "frozen" for the purpose of the specific DLG arrangement - meaning that no loan assets can be added or removed from it, except through loan repayment/ write-off. The RE can have such multiple DLG sets.
The ceiling for DLG cover on such portfolio shall be fixed at ₹2 crore (5% of ₹40 crore), which shall get activated proportionately as and when the loans are disbursed.
Illustration 2
Assume that out of the above DLG set, loans amounting to ₹10 crore are disbursed immediately. Then as on April 1, 2024, the DLG cover available for the portfolio shall be ₹0.5 crore (5% of disbursed).
Subsequently, if loans of ₹10 crore are further disbursed on April 15, 2024, the DLG cover shall proportionately increase to ₹1 crore effective April 15, 2024.
(Refer table below also for summary of each case)
Case 1: As on June 30, 2024, loans worth ₹5 crore mature without any default. In this case, the outstanding portfolio in the books of the RE would be ₹15 crore and the DLG cover shall remain at ₹1 crore.
Case 2: Subsequently, there is a default of ₹2 crore during Q2-2024 and consequently the RE invokes the entire DLG (₹1 crore 1). In this case, as of Sept 30, 2024 the outstanding portfolio in the books of the RE shall be ₹15 crore (₹20 crore original portfolio less ₹5 crore loans matured without default) but no headroom for DLG will be available as the maximum permissible DLG cover of ₹1 crore (5% of disbursed) has been exhausted.
Case 3: Going further, let’s assume that recovery worth ₹1 crore is made by the RE during October 2024 on the defaulted loans of ₹2 crore. In such a case, the amount of the outstanding portfolio in the books of the RE as on October 31, 2024 shall come down to ₹14 crore (₹20 crore original portfolio less ₹5 crore loans matured without any default less ₹1 crore loans which were in default and recovered). However, the recovery amount of ₹1 crore cannot be added to reinstate the DLG cover.
(figures in ₹ crore)
Period |
Disbursed |
Loan maturing without default |
Default Amount |
DLG Invoked |
Recovery/ Write-off |
Outstanding Portfolio |
Available DLG Cover |
Initial Position |
10 |
- |
- |
- |
- |
10 |
0.5 |
Further disbursement |
10 |
- |
- |
- |
- |
20 |
1 |
Case 1 |
20 |
5 |
- |
- |
- |
15 |
1 |
Case 2 |
20 |
5 |
2 |
1 |
- |
15 |
0 |
Case 3 |
20 |
5 |
2 |
1 |
1 |
14 |
0 |
1 It has been assumed that till date zero principal/interest have been received towards these loans.
Ans. Yes, documents as mentioned in reply to Q 5 above shall be submitted by all account holders of a joint account to the RE.
Ans.: Total invoice value must be in Indian Rupees (INR) in actuals (which should also include billing to subsidiary(s)/associate(s) abroad) during the reference period.
Ans: For ease of use, e₹ is available in the same denominations as physical currency. This provides the users with the same familiarity and convenience as with usage of physical currency notes.
In case of the funded facility created on account of invocation of BG/ devolvement of LC, the bank may charge an appropriate rate of interest on the devolved amount taking into account the associated credit risk premium as per the bank’s credit underwriting policy. However, penalty, if any, on that funded facility on account of non-repayment by the borrower within the due date may only be levied in the form of penal charges and not penal interest.
Ans. RBI has mandated minimum number of free transactions at ATMs. Banks may offer more number of free transactions to their customers.
Response: Yes, unless the potential depositor is already a bank’s KYC compliant customer.
Ans. Both types of Small PPIs are reloadable and shall be used only for purchase of goods and services. Their salient features are as follows:
PPIs upto ₹10,000/- (with cash loading facility):
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The amount loaded during any month shall not exceed ₹10,000/-;
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The total amount loaded during the financial year shall not exceed ₹1,20,000/-;
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The amount outstanding at any point of time shall not exceed ₹10,000/-;
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The total amount debited during any given month shall not exceed ₹10,000/-;
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These PPIs shall be converted into full-KYC PPIs within 24 months; and
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Loading / Reloading can be by cash or electronic means.
PPIs upto ₹10,000/- (with no cash loading facility):
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The amount loaded during any month shall not exceed ₹10,000/-;
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The total amount loaded during the financial year shall not exceed ₹1,20,000/-;
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The amount outstanding at any point of time shall not exceed ₹10,000/-;
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Loading / Reloading shall be from a bank account / credit card / full-KYC PPI; and
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The Small PPIs (with cash loading facility) existing as on December 24, 2019 can be converted to this PPI, if desired by the PPI holder.
Ans : ECS Credit offers many advantages to the beneficiary –
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The beneficiary need not visit his / her bank for depositing the paper instruments which he would have otherwise received had he not opted for ECS Credit.
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The beneficiary need not be apprehensive of loss / theft of physical instruments or the likelihood of fraudulent encashment thereof.
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Cost effective.
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The beneficiary receives the funds right on the due date.
Ans: Yes, NEFT can be used to transfer funds from / to NRE and NRO accounts in the country. This, however, is subject to the adherence of the provisions of the Foreign Exchange Management Act, 2000 (FEMA) and Wire Transfer Guidelines.
If a bank goes into liquidation, DICGC is liable to pay to the liquidator the claim amount of each depositor upto Rupees five lakhs within two months from the date of receipt of claim list from the liquidator. The liquidator has to disburse the claim amount to each insured depositor corresponding to their claim amount."
If a bank is reconstructed or amalgamated / merged with another bank: The DICGC pays the bank concerned, the difference between the full amount of deposit or the limit of insurance cover in force at the time, whichever is less and the amount received by him under the reconstruction / amalgamation scheme within two months from the date of receipt of claim list from the transferee bank / Chief Executive Officer of the insured bank/transferee bank as the case may be."
Under the Scheme, the Reserve Bank permits ADs Category - I , ADs Category - II and FFMCs to enter into agency or franchisee agreements at their option for the purpose of carrying restricted money changing business i.e. conversion of foreign currency notes, coins or travellers' cheques into Indian Rupees.
A franchisee can be any entity which has a place of business and a minimum Net Owned Funds of Rs.10 lakh. Franchisees can undertake only restricted money changing business.
An AD Category-I Bank / AD Category-II / FFMC, as the franchiser, is free to decide on the tenor of the arrangement as also the commission or fee through mutual agreement with the franchisee. The Agency / Franchisee agreement to be entered into should include the following salient features:
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The franchisees should display the names of their franchisers, exchange rates and that they are authorised only to purchase foreign currency, prominently in their offices. Exchange Rate for conversion of foreign currency into Rupees should be the same or close to the daily exchange rate charged by the AD Category – I Banks / ADs Category - II / FFMC at its branches.
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The foreign currency purchased by the franchisee should be surrendered only to its franchiser within 7 working days from the date of purchase.
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The maintenance of proper record of transactions by the franchisee.
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The on-site inspection of the franchisee by the franchiser should be conducted at least once a year.
Ans. A person resident in India is free to make any payment in Indian Rupees towards meeting expenses, on account of boarding, lodging and services related thereto or travel to and from and within India, of a person resident outside India, who is on a visit to India.
Ans : Domestic/offshore institutional investors, specially insurance and pension funds can invest through units and bonds issued by the IDFs.
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Not as of now.
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The work on web-based platform for primary auction is, however, underway and as and when the same is completed, investors will be able use the same for participating in the primary auction of G-Secs including IIBs.
With the enactment of the Micro, Small and Medium Enterprises Development (MSMED), Act 2006, for the goods and services supplied by the MSME units, payments have to be made by the buyers as under:
(i) The buyer is to make payment on or before the date agreed on between him and the supplier in writing or, in case of no agreement, before the appointed day. The agreement between seller and buyer shall not exceed more than 45 days.
(ii) If the buyer fails to make payment of the amount to the supplier, he shall be liable to pay compound interest with monthly rests to the supplier on the amount from the appointed day or, on the date agreed on, at three times of the Bank Rate notified by Reserve Bank.
(iii) For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the interest as advised at (ii) above.
(iv) In case of dispute with regard to any amount due, a reference shall be made to the Micro and Small Enterprises Facilitation Council, constituted by the respective State Government.
To take care of the payment obligations of large corporate borrowers to MSEs, banks have been advised that while sanctioning/renewing credit limits to their large corporate borrowers (i.e. borrowers enjoying working capital limits of ₹10 crore and above from the banking system), to fix separate sub-limits, within the overall limits, specifically for meeting payment obligations in respect of purchases from MSEs either on cash basis or on bill basis.
Banks were also advised to closely monitor the operations in the sub-limits, particularly with reference to their corporate borrowers’ dues to MSE units by ascertaining periodically from their corporate borrowers, the extent of their dues to MSE suppliers and ensuring that the corporates pay off such dues before the ‘appointed day’ /agreed date by using the balance available in the sub-limit so created.(Refer circular IECD/5/08.12.01/2000-01 dated October 16, 2000 reiterated on May 30, 2003, vide circular No. IECD.No.20/08.12.01/2002-03).
Ans. Yes. All entities, irrespective of domestic or foreign, need to obtain license/ approval / authorization from Reserve Bank before commencing payment system operations in the country. The PSS Act indicates that “No person can operate a payment system except under and in accordance with an authorisation issued by the Reserve Bank”. Criteria are also specified for particular payment systems which form part of the respective payment system guidelines / instructions
The form and manner of application for authorisation is available at /documents/87730/30842423/PSSR23022022d57d6e9afaf44d97b9ed577d9d1c7c2b.pdf
Ans. Yes
The complainant is required to give details such as, his/her name and address, the name and address of the branch or office of the NBFC against which the complaint is made, facts giving rise to the complaint supported by documents, if any, the nature and extent of the loss caused to the complainant, the relief sought from the NBFC Ombudsman and a declaration that the complaint is maintainable under Clause 9A of the Scheme.
Ans. The detailed process of application is given in the Master Directions on Access Criteria for Payment Systems issued vide DPSS.CO.OD.No.1846/04.04.009/2016-17 dated January 17, 2017.
All applications for membership to CPS shall have to be submitted to the Chief General Manager, Department of Payment and Settlement Systems (DPSS), Reserve Bank of India (RBI), Central Office, 14th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001.
The application will need to be in the format prescribed in Appendix - 1 “Covering letter for membership to Centralised Payment System”, of Master Directions on Access Criteria for Payment Systems, together with annexures.
Response
There is no requirement for any initial deposit for opening a BSBDA.
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The banks through which these securities have been purchased will provide other customer services.
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Investors can approach the banks for other services such as change of address, early redemption, nomination, lien marking, etc.
Only such resolution plans which receive a credit opinion of RP4 or better for the residual debt from a CRAs shall be considered for implementation under the Resolution Framework. In case credit opinion is obtained from more than one CRA, all such credit opinions must be RP4 or better.
Ans. List of all authorised Payment System Operators (PSOs), including TReDS, is available at the following path: www.rbi.org.in → “Payment and Settlement Systems” dropdown → “Information Useful to Customer” → “List of Authorised Entities – Payment System Operators”. Following is the web link for accessing the same: /en/web/rbi/-/publications/certificates-of-authorisation-issued-by-the-reserve-bank-of-india-under-the-payment-and-settlement-systems-act-2007-for-setting-up-and-operating-payment-system-in-india-12043
Response: The Reserve Bank has not prescribed any requirement for insurance cover on debit or credit cards. However, in case a card-issuer or a card payment network provides an insurance cover, complimentary or chargeable (with the consent of the cardholder), the card-issuer shall ensure that the relevant nomination details are recorded by the Insurance Company and the availability of insurance is included, along with other information, in every statement. The information shall also include the details regarding the insurance cover, name/address and telephone number of the Insurance Company which will handle the claims relating to the insurance cover. In case of group insurance policy, the contact details of the concerned officials of the card-issuer shall be provided in the statements.
Ans. The remittances can be made in any freely convertible foreign currency.
These FAQs are issued by the Reserve Bank of India (hereinafter referred to as “Bank”) for information and general guidance purposes only. The Bank will not be held responsible for actions taken and / or decisions made on the basis of the same. For clarifications or interpretations, if any, one may be guided by the relevant circulars, guidelines and notifications issued from time to time by the Bank.
Ans.: No. Even if a company’s account closing period is different from reference period (end-March), the MF survey information should be reported for the survey reference period, based on the company’s internal assessment.
Answer: The policy is not aimed at any specific country. This step is part of a sequenced and calibrated path for increased use of the INR in international transactions.
Answer: Regulated financial entities, other entities with a minimum net worth of Rs.500 crore or a minimum turnover of Rs. 1000 crore, as per the latest audited financial statements, and non-residents (other than individuals) are classified as non-retail users. All other types of users are classified as retail users.
Ans: The Guidelines are applicable to ‘digital loans’ offered over any digital platform which meet the definition of ‘Digital Lending Apps/ Platforms’ (DLAs) as per our circular dated September 02, 2022 on Guidelines on Digital Lending.
Ans. The guidance structure for calculating the amount to be imposed on compounding is available at paragraph 5.4 of Directions - Compounding of Contraventions under FEMA, 1999. It may, however, be noted that the guidance structure is only for the purpose of broadly standardizing the amount imposed by the compounding authorities across offices and the actual amount imposed may vary, depending on the circumstances of the case taking into account the factors given in paragraph 5.3 of Directions - Compounding of Contraventions under FEMA, 1999.
Ans. No. As per paragraph 20.2.1 of these Directions, banks cannot accept recurring deposits under FCNR(B) Scheme.
Ans. An RE has the following options to onboard a customer:
(a) Face-to-face onboarding:
- Visit to the branch/ office of the RE;
- using e-KYC authentication (OTP as well as biometric based authentication); undertaking offline verification of proof of possession of Aadhaar Number; obtaining certified copy of the OVD or equivalent e-document thereof; undertaking ‘Digital KYC Process’, as per paragraph 16 of the MD on KYC.
- Video based Customer Identification Process (V-CIP) complying with prescribed standards and procedures.
(b) Non-face-to-face onboarding:
- using Aadhaar OTP based e-KYC authentication;
- using digital channels such as CKYCR, DigiLocker, equivalent e-document, etc., and non-digital modes such as obtaining copy of OVD certified by additional certifying authorities as allowed for NRIs and PIOs.
Ans.: Total invoice value must be in Indian Rupees (INR) in actuals (which should also include billing to subsidiary(s)/associate(s) abroad) as per type of export service.
Ans: The feature of providing the requisite change is available in all the e₹ wallets. For example, if one desires to purchase a ₹15 item from a merchant but has only ₹20 denomination available in the e₹ wallet, she/he can enter ₹15 in the amount field while sending the money; ₹15 will automatically be credited to the merchant while the balance ₹5 will be returned to the e₹ wallet.
Page Last Updated on: December 11, 2022