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Indian Currency

B) Banknotes

9. What is a "star series" banknote? +

Fresh banknotes issued by Reserve Bank of India till August 2006 were serially numbered. Each of these banknote bears a distinctive serial number along with a prefix consisting of numerals and letter/s. The banknotes are issued in packets containing 100 pieces.

The Bank adopted the "STAR series" numbering system for replacement of defectively printed banknote in a packet of 100 pieces of serially numbered banknotes. The Star series banknotes are exactly similar to the other banknotes, but have an additional character viz., a *(star) in the number panel in the space between the prefix.

Core Investment Companies

Core Investment Companies (CICs)

17. As per the definition of CIC, only investment/loans/debt in group companies is eligible for computing 90% exposure? What treatment is to be given to company’s investment in group’s partnership concerns? +

Ans: CICs are prohibited from contributing capital to any partnership firm or to be partners in partnership firms including Limited Liability Partnerships (LLPs) or any association of person similar in nature to partnership firms.

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

17. What are the various prudential regulations applicable to NBFCs? +

The Bank has issued detailed directions on prudential norms, vide Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, Non-Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015 and Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015. Applicable regulations vary based on the deposit acceptance or systemic importance of the NBFC.

The directions inter alia, prescribe guidelines on income recognition, asset classification and provisioning requirements applicable to NBFCs, exposure norms, disclosures in the balance sheet, requirement of capital adequacy, restrictions on investments in land and building and unquoted shares, loan to value (LTV) ratio for NBFCs predominantly engaged in business of lending against gold jewellery, besides others. Deposit accepting NBFCs have also to comply with the statutory liquidity requirements. Details of the prudential regulations applicable to NBFCs holding deposits and those not holding deposits is available in the section ‘Regulation – Non-Banking – Notifications - Master Circulars’ in the RBI website.

Foreign Investment in India

Q.17: What is meant by investment on repatriation basis and investment on non-repatriation basis ? +

Answer: Investment on repatriation basis means an investment, the sale/ maturity proceeds of which are, net of taxes, eligible to be repatriated out of India. The expression investment on non-repatriation basis may be construed accordingly.

FAQs on Non-Banking Financial Companies

Inter-corporate deposits (ICDs)

17. If a company being a shareholder of a public limited NBFC gives deposit or loan to the latter one, whether such a loan is to be treated as public deposit or ICD ? +

The objective of exempting the intercorporate deposits from the purview of Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 is that the corporate bodies whether a shareholder or a non-shareholder should be able to appraise the loan proposals and ensure the safety of the funds lent. Hence, such loans will be treated as ICDs.

Domestic Deposits

II. Deposits of Non-Residents Indians (NRIs)

17. Whether banks can accept recurring deposits under FCNR(B) Scheme? +

No. Banks cannot accept recurring deposits under FCNR(B) Scheme.

External Commercial Borrowings (ECB) and Trade Credits

F. LEVERAGE CRITERIA AND BORROWING LIMIT

17. Should the proposed ECB be added to all outstanding ECBs for arriving at the individual limit for raising of ECBs? +

The individual limit for raising ECB under the automatic route will take into account all ECBs raised in the financial year including the proposed one. However, refinancing of ECB amount will not be considered for arriving at individual limit per financial year. Also, the limit will be restored at the beginning of new financial year.

Government Securities Market in India – A Primer

17. What is shut period? +

‘Shut period’ means the period for which the securities cannot be traded. During the period under shut, no trading of the security which is under shut is allowed. The main purpose of having a shut period is to facilitate finalizing of the payment of maturity redemption proceeds and to avoid any change in ownership of securities during this process. Currently, the shut period for the securities held in SGL accounts is one day.

Coordinated Portfolio Investment Survey – India

Some important definitions and concepts

Q17. What should be considered under equity securities? +

Ans: The following are included under equity securities:

Ordinary shares.
Stocks.
Participating preference shares.
Shares/units in mutual funds and investment trusts
Depository receipts (e.g., American Depository Receipts) denoting ownership of equity securities issued by non-residents.
Securities sold under repos or “lent” under securities lending arrangements.
Securities acquired under reverse repos or securities borrowing arrangements and subsequently sold to a third party should be reported as a negative holding.

Business restrictions imposed on Paytm Payments Bank Limited vide Press Releases dated January 31 and February 16, 2024

FASTag issued by Paytm Payments Bank

17. Can I transfer the balance from my old FASTag issued by Paytm Payments Bank to a new FASTag obtained from another Bank? +

Credit balance transfer feature is not available in the FASTag product. Therefore, you will have to close your old FASTag issued by Paytm Payments Bank and request the bank for a refund