FAQ Page 1 - ಆರ್ಬಿಐ - Reserve Bank of India
Business restrictions imposed on Paytm Payments Bank Limited vide Press Releases dated January 31 and February 16, 2024
Bank Accounts with Paytm Payments Bank
No. After March 15, 2024, you will not be able to receive any such credits into your account with Paytm Payments Bank. It is suggested that you make alternative arrangements with another bank before March 15, 2024 to avoid inconvenience.
Indian Currency
A) Basics of Indian Currency/Currency Management
Some banks are authorised to establish Small Coin Depots to stock and distribute small coins i.e. coins of value below Rupee One to bank branches in their area of operation. As on March 31, 2024, there were 2,460 small coin depots.
Coordinated Portfolio Investment Survey – India
Details for survey launch
Ans: After sending the duly filled in survey schedule (excel based) to the generic email IDs of the Reserve Bank as per the instruction in the survey schedule, the respondent will receive the system-generated acknowledgement. No separate mail will be sent in this regard. If some error is mentioned in the acknowledgement, then the respondent is required to resubmit the form by rectifying the mentioned error. After corrections, the respondent should receive a successful processing acknowledgement email.
FAQs on Master Directions on Priority Sector Lending Guidelines
E. Export Credit
Clarification: Bank lending to export credit under agriculture and MSME sectors is classified as PSL under the respective categories viz, agriculture and MSME and there is no cap on credit for the same. Export Credit (other than in agriculture and MSME) is classified as priority sector as per the following table:
Domestic banks / WoS of Foreign banks/ SFBs/ UCBs | Foreign banks with 20 branches and above | Foreign banks with less than 20 branches |
Incremental export credit over corresponding date of the preceding year, up to 2 per cent of ANBC or CEOBE whichever is higher, subject to a sanctioned limit of up to ₹40 crore per borrower. | Incremental export credit over corresponding date of the preceding year, up to 2 percent of ANBC or CEOBE whichever is higher. | Export credit up to 32 per cent of ANBC or CEOBE whichever is higher. |
Framework for Compromise Settlements and Technical Write-offs
A. COMPROMISE SETTLEMENT IN WILFUL DEFAULT AND FRAUD CASES
Restructuring in general entails the lenders having a continuing exposure to the borrower entity even after restructuring and hence, in case of borrowers classified as fraud or wilful defaulter, permitting lenders to continue their credit relationship with the borrower entity would be fraught with moral hazard. On the other hand, a compromise settlement entails a complete detachment of the lender with the borrower. Therefore, permitting lenders to settle with the borrowers as per their commercial judgement would enhance recovery prospects.
Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999
Eligible entities and requirements to submit the FLA return
Ans: Yes, entities can fill the FLA return even after due date, after taking approval from RBI. But in that case, penalty clause may be invoked on the entity for late submission.
Biennial survey on Foreign Collaboration in Indian Industry (FCS)
Details of survey launch
Ans.: The Reserve Bank will send emails to all the eligible entities from generic email IDs of the Reserve Bank to notify them about the launch of the FCS survey for the latest reference period. Entities are required to fill in the latest survey schedule attached along with the mail and send to the generic email IDs of the Reserve Bank as per the instruction given in the survey schedule.
Retail Direct Scheme
Scheme related queries
Housing Loans
Targeted Long Term Repo Operations (TLTROs)
Ans: The banks have already been given sufficient time to deploy funds availed under TLTRO scheme. It has now been decided to allow up to 30 working days for deployment in specified securities for those banks who have availed funds under the first tranche of TLTRO conducted on March 27, 2020. However, if a bank fails to deploy funds within the specified time frame, the interest rate on un-deployed funds will increase to prevailing policy repo rate plus 200 bps for the number of days such funds remain un-deployed. This incremental interest will have to be paid along with regular interest at the time of maturity.
Indian Currency
A) Basics of Indian Currency/Currency Management
In terms of Section 22 of the Act, Reserve Bank has the sole right to issue banknotes in India. Section 25 states that the design, form and material of bank notes shall be such as may be approved by the Central Government after consideration of the recommendations made by the Central Board of RBI.
The Reserve Bank, in consultation with the Central Government and other stake holders, estimates the quantity of banknotes that are likely to be needed denomination-wise in a year and places indents with the various currency printing presses for supply of banknotes. The Reserve Bank in terms of its clean note policy, provides good quality banknotes to the members of public. With this objective in view the banknotes received back from circulation are examined and those fit for circulation are reissued while the others (soiled and mutilated) are destroyed so as to maintain the quality of banknotes in circulation.
In respect of coins, the role of RBI is limited to distribution of coins that are supplied by Government of India. The Government of India is responsible for the designing and minting of coins in various denominations as per the Coinage Act, 2011.
Government Securities Market in India – A Primer
LAF is a facility extended by RBI to the scheduled commercial banks (excluding RRBs) and PDs to avail of liquidity in case of requirement or park excess funds with RBI in case of excess liquidity on an overnight basis against the collateral of G-Secs including SDLs. Basically, LAF enables liquidity management on a day to day basis. The operations of LAF are conducted by way of repurchase agreements (repos and reverse repos – please refer to paragraph numbers 30.4 to 30.8 under question no. 30 for more details) with RBI being the counter-party to all the transactions. The interest rate in LAF is fixed by RBI from time to time. LAF is an important tool of monetary policy and liquidity management. The substitution of collateral (security) by the market participants during the tenor of the term repo is allowed from April 17, 2017 subject to various conditions and guidelines prescribed by RBI from time to time. The accounting norms to be followed by market participants for repo/reverse repo transactions under LAF and MSF (Marginal Standing Facility) of RBI are aligned with the accounting guidelines prescribed for market repo transactions. In order to distinguish repo/reverse repo transactions with RBI from market repo transactions, a parallel set of accounts similar to those maintained for market repo transactions but prefixed with ‘RBI’ may be maintained. Further market value of collateral securities (instead of face value) will be reckoned for calculating haircut and securities acquired by banks under reverse repo with RBI will be bestowed SLR status.
RBI vide its notification FMRD.DIRD.01/14.03.038/2018-19 dated July 24, 2018 has issued Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 applicable to all the persons eligible to participate or transact business in market repurchase transactions (repos).
Scheduled commercial banks, Primary Dealers along with Mutual Funds and Insurance Companies (subject to the approval of the regulators concerned) maintaining Subsidiary General Ledger account with RBI are permitted to re-repo the government securities, including SDLs and Treasury Bills, acquired under reverse repo, subject to various conditions and guidelines prescribed by RBI time to time.
Core Investment Companies
Core Investment Companies (CICs)
Ans: All direct investments in group companies, as appearing in the CICs balance sheet will be taken into account for this purpose. Investments made by subsidiaries in step down subsidiaries or other entities will not be taken into account for computing 90 percent of net assets.
All you wanted to know about NBFCs
A. Definitions
The applicant company is required to apply online and submit a physical copy of the application along with the necessary documents to the Regional Office of the Reserve Bank of India. The application can be submitted online by accessing RBI’s secured website https://cosmos.rbi.org.in . At this stage, the applicant company will not need to log on to the COSMOS application and hence user ids are not required. The company can click on “CLICK” for Company Registration on the login page of the COSMOS Application. A window showing the Excel application form available for download would be displayed. The company can then download suitable application form (i.e. NBFC or SC/RC) from the above website, key in the data and upload the application form. The company may note to indicate the correct name of the Regional Office in the field “C-8” of the “Annex-I dentification Particulars” in the Excel application form. The company would then get a Company Application Reference Number for the CoR application filed on-line. Thereafter, the company has to submit the hard copy of the application form (indicating the online Company Application Reference Number, along with the supporting documents, to the concerned Regional Office. The company can then check the status of the application from the above mentioned secure address, by keying in the acknowledgement number.
Foreign Investment in India
Domestic Deposits
I. Domestic Deposits
External Commercial Borrowings (ECB) and Trade Credits
C. CURRENCY OF ECB
Remittances (Money Transfer Service Scheme (MTSS) and Rupee Drawing Arrangement (RDA))
Rupee Drawing Arrangement (RDA)
Coordinated Portfolio Investment Survey – India
Details for survey launch
Ans: The CPIS is conducted by the Reserve Bank half yearly to collect the required details of the reporting entities as on end-March and end-September of a FY. In general, the survey is launched for end-March and end-September position on June 01 and December 01 of that year respectively.
FAQs on Non-Banking Financial Companies
Definition of public deposits
Business restrictions imposed on Paytm Payments Bank Limited vide Press Releases dated January 31 and February 16, 2024
Bank Accounts with Paytm Payments Bank
FAQs on Master Directions on Priority Sector Lending Guidelines
F. Education
Clarification: For the loans sanctioned before September 4, 2020, outstanding value up to ₹10 lakh, irrespective of the sanctioned limit, shall continue to be classified under priority sector till maturity. However, while reckoning any fresh loan under PSL to a borrower who had already availed education loan from the bank prior to September 4, 2020, it needs to be ensured that the aggregate sanctioned limit does not exceed ₹20 lakh for classification of the loans under PSL.
In the mentioned scenario, as the combined sanctioned limit becomes ₹30 lakh, the ₹18 lakh loan extended after September 4, 2020 shall not be eligible for PSL classification. However, with regard to the ₹12 lakh loan, which was already PSL as per earlier guidelines, the outstanding value under the facility, up to ₹10 lakh shall continue to be eligible under PSL till maturity.
Framework for Compromise Settlements and Technical Write-offs
B. TECHNICAL WRITE-OFF
No. As defined in the circular, technical write-off refers to cases where the NPAs remain outstanding at borrowers’ loan account level, but are derecognised by the lenders only for accounting purposes. Technical write-off is a normal banking practice undertaken by the lenders to cleanse the balance sheets of bad debts which are either considered unrecoverable or whose recovery is likely to consume disproportionate resources of the lenders. However, such technical write-offs do not entail any waiver of claims against the borrower and thus the lenders’ right to recovery is not undermined in any manner. Therefore, the defaulting borrowers are not benefited in any manner and their legal obligation as well as the costs of such defaults for them remain unchanged vis-à-vis the position prior to technical write-offs.
The circular only provides clarity on definition of technical write-off and a broad guidance on the process to be followed by the lenders for technical write-offs, which will ensure consistency in the approach followed by various lenders.
Biennial survey on Foreign Collaboration in Indian Industry (FCS)
Details of survey launch
Ans.: After sending the duly filled in survey schedule (excel based) to the generic email IDs of the Reserve Bank as per the instruction in the survey schedule, the respondent will receive the system-generated acknowledgement. No separate mail will be sent in this regard. If some error is mentioned in the acknowledgement, then the respondent is required to resubmit the form by rectifying the mentioned error. After corrections, the respondent should receive a successful processing acknowledgement email.
Foreign Investment in India
Retail Direct Scheme
Scheme related queries
The RBI Retail Direct Online Portal will facilitate the following:
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Buying Government securities through primary auctions (non-competitive segment only).
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Buying and selling Government securities in the secondary market.
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Buying and selling Sovereign Gold Bonds (SGBs) in the primary and secondary market.
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Investor services such as account statement, nomination facility, pledge/lien, gift transactions, grievance redressal, and managing profile like contact details etc.
Housing Loans
Targeted Long Term Repo Operations (TLTROs)
Ans: The deployment of funds availed under TLTRO in primary market cannot exceed fifty percent of the amount availed. Apart from the above stipulation, the limits are fungible between primary and secondary market deployment.
Indian Currency
A) Basics of Indian Currency/Currency Management
The information about indent and supply of notes and coins or currency/coins in circulation is available on our website www.rbi.org.in, at the following link https://rbi.org.in/Scripts/AnnualReportMainDisplay.aspx
Government Securities Market in India – A Primer
7.1 The Public Debt Office (PDO) of RBI, acts as the registry and central depository for G-Secs. They may be held by investors either as physical stock or in dematerialized (demat/electronic) form. From May 20, 2002, it is mandatory for all the RBI regulated entities to hold and transact in G-Secs only in dematerialized (SGL) form.
a. Physical form: G-Secs may be held in the form of stock certificates. A stock certificate is registered in the books of PDO. Ownership in stock certificates cannot be transferred by way of endorsement and delivery. They are transferred by executing a transfer form as the ownership and transfer details are recorded in the books of PDO. The transfer of a stock certificate is final and valid only when the same is registered in the books of PDO.
b. Demat form: Holding G-Secs in the electronic or scripless form is the safest and the most convenient alternative as it eliminates the problems relating to their custody, viz., loss of security. Besides, transfers and servicing of securities in electronic form is hassle free. The holders can maintain their securities in dematerialsed form in either of the two ways:
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SGL Account: Reserve Bank of India offers SGL Account facility to select entities who can hold their securities in SGL accounts maintained with the Public Debt Offices of the RBI. Only financially strong entities viz. Banks, PDs, select UCBs and NBFCs which meet RBI guidelines (please see RBI circular IDMD.DOD.No. 13/10.25.66/2011-12 dt Nov 18, 2011) are allowed to maintain SGL with RBI.
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Gilt Account: As the eligibility to open and maintain an SGL account with the RBI is restricted, an investor has the option of opening a Gilt Account with a bank or a PD which is eligible to open a CSGL account with the RBI. Under this arrangement, the bank or the PD, as a custodian of the Gilt Account holders, would maintain the holdings of its constituents in a CSGL account (which is also known as SGL II account) with the RBI. The servicing of securities held in the Gilt Accounts is done electronically, facilitating hassle free trading and maintenance of the securities. Receipt of maturity proceeds and periodic interest is also faster as the proceeds are credited to the current account of the custodian bank / PD with the RBI and the custodian (CSGL account holder) immediately passes on the credit to the Gilt Account Holders (GAH).
7.2 Investors also have the option of holding G-Secs in a dematerialized account with a depository (NSDL / CDSL, etc.). This facilitates trading of G-Secs on the stock exchanges.
All you wanted to know about NBFCs
A. Definitions
The application form and an indicative checklist of the documents required to be submitted along with the application is available at www.rbi.org.in → Site Map → NBFC List → Forms/ Returns.
Domestic Deposits
I. Domestic Deposits
Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999
Eligible entities and requirements to submit the FLA return
Ans: Yes, entities can fill the FLA return even after due date, after taking approval from RBI. But in that case, penalty clause may be invoked on the entity for late submission.
External Commercial Borrowings (ECB) and Trade Credits
D. RECOGNISED LENDERS/ INVESTORS
The foreign equity holders as defined at Paragraph 1.11 of the Master Direction No. 5 on ‘External Commercial Borrowings, Trade Credits and Structured Obligations dated March 26, 2019 (MD) are eligible to lend for the end-uses given at Paragraph 2.1.viii(d), 2.1.viii(e) and 2.1.viii(f) of the MD. For end-uses, other than those in the negative list, recognised lenders are given at Paragraph 2.1.iv of the MD.
Remittances (Money Transfer Service Scheme (MTSS) and Rupee Drawing Arrangement (RDA))
Rupee Drawing Arrangement (RDA)
Core Investment Companies
Core Investment Companies (CICs)
Ans: Anything that has to be repaid will be an outside liability.
FAQs on Non-Banking Financial Companies
Definition of public deposits
Business restrictions imposed on Paytm Payments Bank Limited vide Press Releases dated January 31 and February 16, 2024
Bank Accounts with Paytm Payments Bank
Coordinated Portfolio Investment Survey – India
Details for survey launch
Ans: In general, the due date for participating in CPIS for end-March and end-September position is July 15 and December 31 of that year respectively.
FAQs on Master Directions on Priority Sector Lending Guidelines
G. Social Infrastructure
Framework for Compromise Settlements and Technical Write-offs
C. GENERAL
The circular is intended to achieve the following objectives:
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It rationalises the existing regulatory guidance to banks on compromise settlements, consolidating various instructions issued over the years. It also tightens some of the related provisions and ensures greater transparency.
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By providing a clear regulatory framework, it enables other regulated entities, particularly cooperative banks, to undertake compromise settlements as part of the normal resolution efforts.
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It provides clarity on definition of technical write-off and provides a broad guidance on the process to be followed by the regulated entities for technical write-offs, which is a normal banking practice.
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As a disincentive to both the lenders and the borrowers, it introduces the concept of cooling period for normal cases of compromise settlement during which the lender undertaking settlement shall not take any fresh exposure on the borrower entity. In case of borrower accounts classified as wilful defaulter or fraud, the debarment to obtain fresh finance, as explained at (2) above, will apply.
Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999
Eligible entities and requirements to submit the FLA return
Ans: Yes, entities can modify the already submitted FLA return after taking the approval from RBI.
Biennial survey on Foreign Collaboration in Indian Industry (FCS)
Details of survey launch
Ans.: In case the account closing is different from end-March, the company cannot report the information as per their account closing period. In such cases, the information should be reported for the reference period only, i.e., previous March and latest March based on company’s internal assessment. Companies can submit provisional figures in FCS survey schedule, if audited data is not available.
Domestic Deposits
I. Domestic Deposits
Retail Direct Scheme
Account opening related queries
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Eligible Investors may login to https://rbiretaildirect.org.in and register using the Registration link to begin the account opening process.
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To open an account, the investor will have to furnish details like full name, PAN, mobile number, e-mail address, residential address, savings bank account number, etc. and specify a login name. Mobile number and email address will be authenticated using OTP and all further customer requests and services will be OTP based.
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For joint accounts, the PAN, e-mail address and phone number of both holders will be required.
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Once these details have been provided, you will get a reference number to track your application.
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You may now initiate your Know Your Customer (KYC) verification process.
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In case of joint accounts, the KYC verification will be done for both the holders.
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It will be mandatory for the investor to fill in the nomination details at the time of opening of the account.
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The savings bank account of the customer will be linked to their Retail Direct account by crediting a token amount into their bank account and verifying the same.
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Once the KYC is successful, an RDG account will be opened in the name of the investor(s).
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Information related to account number, login id & password to access the Online Portal will be made available to the customer on their registered e-mail id.
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In case of KYC failures, the individual can make new application or resubmit application after making necessary changes.
Targeted Long Term Repo Operations (TLTROs)
updated: ಮೇ 28, 2021
Ans: Banks can replace the security sold through buy-back route with any other specified security for the amount availed under TLTRO scheme. Banks should ensure that their TLTRO funding should always be backed by specified security till maturity of TLTRO.