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Clarifications to Queries on Guidelines for Licensing of New Banks in the Private Sector

A. The Promoters/Promoter Group cannot set up a bank directly. They have to first set up a wholly owned NOFHC, which will hold the bank and other regulated financial services entities/companies in which the Promoter Group has ‘significant influence’ or ‘control’ (as defined in Accounting Standard-23).NOFHC could be set-up with equity participation by a sub-set of non-financial services companies/entities/individuals and non-operative financial holding companies in the Promoter Group provided the equity participation is in conformity with the stipulation at para 2 (C) (ii) of the guidelines.

Ans. In case of PPIs issued by banks and non-banks, customers have recourse to the Reserve Bank - Integrated Ombudsman Scheme, 2021 for grievance redressal. This scheme is available on the RBI website at the link - https://cms.rbi.org.in.

Ans. A PPI issuer can issue any one of the following three types to a customer:

  1. Small PPIs upto ₹10,000 (with cash loading facility);

  2. Small PPIs upto ₹10,000 (with no cash loading facility); and

  3. Full-KYC PPIs.

There is no prohibition on banks' placing of funds with non-banking non-financial companies under their Public Deposit Scheme. However, such investment in the Public Deposit Scheme should be classified by banks as loans/advances in their balance sheet and returns under the Banking Regulation Act, 1949 and fortnightly returns by scheduled commercial banks under Reserve Bank of India Act , 1934.
Banks may take necessary steps in the matter based on the settled legal position regarding enforcement of the declaration in case the remittance is made on behalf of a minor.
Yes, a person resident in India, being an individual, who is an employee or a director of Indian office or branch of a foreign company or of a subsidiary in India of a foreign company or of an Indian company in which foreign equity holding is not less than 51 per cent, may purchase the equity shares offered by the said foreign company: -Provided that the shares are offered at a concessional price.
The bank shall compensate the investors for the above mentioned financial loss at a fixed rate of 8% per annum (with effect from April 10, 2012).
A. The Promoters/Promoter Group have to first set up a wholly owned NOFHC for holding the bank. They cannot set up a bank directly. In case, some entities/companies in the Promoter Group having ‘significant influence’ or ‘control’ (as defined in Accounting Standard-23) in regulated or unregulated financial services activities do not wish to participate in the voting equity of the NOFHC, they can do so. However, the regulated financial services entities, in which the companies in the Promoter Group have ‘significant influence’ or ‘control’ (as defined in Accounting Standard-23), have to come under the NOFHC. The unregulated financial services activities/entities of the Promoter Group cannot come under the NOFHC. [para 2 (C) (i), (ii), (iii) & (vii) of the guidelines]
No. The Scheme does not envisage extension of credit facility against the security of the deposits.
Yes, Reserve Bank has given general permission to a person resident of India to acquire foreign security to the extent of the minimum number of qualification shares required to be held for holding the post of Director and this amount shall not exceed 1% of the paid-up capital of the company subject to a limit of USD 20,000 in a calendar year.
Banks can purchase letter of allotment in respect of PSU bonds subject to following conditions. 1. The transaction (other than inter bank transaction) should be undertaken only through recognised Stock Exchanges and registered brokers. 2. While purchasing the security, the bank should ensure that it gets a clear title to the security and the security is traded in the secondary market. The bank should formulate their own internal guidelines with the approval of the Board for undertaking such transaction.

Ans. Within the types mentioned above, in case a PPI issuer is issuing multiple PPIs to same customer due to various reasons (e.g. multiple co-branding partners, issuance of PPI in different form factors like wallets / cards), then the PPI issuer shall monitor the limits through centralised database / management information system (MIS).

For example, the limit of ₹2,00,000/- at any point of time shall be calculated after combining the value in all full-KYC PPIs issued to a customer by a particular PPI issuer under various arrangements / form factor. Similarly, the limit of ₹10,000 in paragraph 9.1(i) of MD-PPIs is across all Small PPIs (issued by the PPI issuer under various arrangements / form factor). A PPI issuer cannot issue both types of Small PPIs to same mobile number at the same time.

However, the limits do not include the two categories (Gift PPIs and PPI-MTS) mentioned in paragraph 10 of the MD-PPIs.

Electronic Clearing Service (Credit Clearing) Mandate Form

(Investor (s)’s option to receive redemption proceeds and
interest payments through Credit Clearing Mechanism)

1.

Investor(s) Name and Address

:

 

2.
  1. Member ID No./BLA No.
  2. PAN/GIR No.*
  3. Telephone No./Mobile No./E-mail ID

:
:
:

 

3.

Particulars of Bank account

  1. Name of the Bank      
  2. Name of the branch
    1. Address  
    2. Telephone No.
  3. 9-Digit MICR code number of the bank and branch appearing on the MICR cheque issued by the bank
  4. Type of the account (Savings, Current or Cash Credit) with codes -10/11/13           
  5. Ledger and Ledger folio number
  6. Account number (as appearing on the cheque book)

 

:
:
:
:
:

 

:

:
:

 

(In lieu of the bank certificate to be obtained as under, please attach a blank cancelled cheque or photocopy of a cheque or front page of your savings bank passbook issued by your bank for verification of the above particulars)

4. Date of effect :

I/We hereby declare that the particulars given above are correct and complete. If the transaction is delayed or not effected at all for reasons of incomplete or incorrect information, I/We would not hold the user institution responsible. I/We have read the option invitation letter and agree to discharge the responsibility expected of us as a participant under the scheme.

Date:

(.....................................)
Signature(s) of the Investor(s)

(In case of joint holdings, all the investors, whose signatures are registered with PDOs, should sign here)

Certified that the particulars furnished above are correct as per our records.

Bank’s Stamp:

Date:

(.................................)
Signature of the authorised official of the Bank

* Compulsory for investors due to receive maturity proceeds exceeding Rs. One lakh

These FAQs are issued by the Reserve Bank of India 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, investors are requested to be guided by the relevant circulars and notifications issued from time to time by the Bank and the  Government as well as the relevant provisions of the Government Securities Act, 2006 and the Government Securities Regulations, 2007.

A. Yes. All the regulated financial services entities in which the Promoter Group has ‘significant influence’ or ‘control’ (as defined in Accounting Standard 23) will have to be brought under the NOFHC as subsidiaries, or associates or joint ventures. [para 2 (C) (iii) & (vii) of the guidelines]
No. Banks in India can not open a foreign currency account in India for residents under the Scheme.
Yes, Reserve Bank on an application may permit a person resident in India to acquire foreign securities by way of rights shares issued by a company incorporated outside India up to an amount not exceeding US$ 20,000 in a block of five calendar years in case the existing shares were held in accordance with the provisions of the law.
Shares/debentures/bonds should be valued at prevailing market prices when they are lodged as security for advances.

Ans. Interoperability is the technical compatibility that enables a payment system to be used in conjunction with other payment systems. Interoperability has been allowed in PPIs through circular dated October 16, 2018 and it has been made mandatory vide circular dated May 19, 2021.

A. The overall track record of the Promoters/Promoter Group for at least 10 years will be seen in all its activities both financial and non-financial. If some, but not all, companies forming part of the Promoter Group have been in existence for less than 10
Ans. Any authorised bank or non-bank PPI issuer can provide the facility of PPI interoperability.

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Page Last Updated on: December 11, 2022

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