A. No.It is not envisaged that all the companies in the Promoter Group have to set up the wholly owned NOFHC. As provided in para 2(C)(iii) of the guidelines, only the non-financial services companies/entities and non-operative financial holding companies in the Promoter Group and individuals belonging to Promoter Group, conforming to the stipulation in para 2(C)(ii)(a) and (b), will be allowed to hold the shares of NOFHC. Further, para 2(C)(vii) requires that all the regulated financial services entities, in which the Promoter Group has ‘significant influence’ or ‘control’, (as defined in Accounting Standard 23) shall be held by the NOFHC, and that, such entities cannot hold shares in the NOFHC [para 2 (C) (iii) & (vii)].

No ratings or guidelines have been prescribed under the Liberalised Remittance Scheme of USD 25,000 on the quality of the investment an individual can make. However, the individual investor is expected to exercise due diligence while taking a decision regarding the investments which he or she proposes to make.

Resident individuals in India can acquire foreign securities without prior approval in the following cases: -by way of gift from a person outside India; orissued by a company incorporated outside India under Cashless Employees Stock Option Scheme which does not involve any remittance from India; orby way of inheritance from a person whether resident in or outside India; orpurchase of foreign securities out of funds held in the Resident Foreign Currency Account maintained in accordance with the Foreign Exchange Management (Foreign Currency Account) Regulations, 2000; orbonus shares on the foreign securities already held by them; orResident individuals are permitted to make overseas investments without any limit in listed overseas companies that have at least 10% share in an Indian company listed in a recognized stock exchange in India as on 1st January of the year of investment.

The bills covering payment of electricity charges, customs duty, hire purchase/lease rental instalments, sale of securities and other types of financial accommodation should not be discounted by banks.

Yes.  Relief/Savings Bonds, like other Government securities, can be transferred by execution of transfer forms as explained at Question No. 14. However, the specific Government loan notifications issued for the 7% Savings Bonds, 2002, 6.5% Savings Bonds, 2003 (Non taxable) and 8% Savings Bonds, 2003 (Taxable) have prescribed the specific conditions subject to which such transfers may take place. While all the three Savings Bonds are transferable to the nominee in case of death of the holder, the 7% Savings Bonds, 2002 and 6.5% Savings Bonds, 2003 (Non taxable) are also transferable by way of gift to a "relative" as defined in section 6 of the Indian Companies Act, 1956. Section 6 of the Indian Companies Act, 1956 defines "relative" as under:

A person shall be deemed to be a relative of another if and only if,

a) they are members of a Hindu undivided family; or
b) they are husband and wife; or
c) the one is related to the other in the manner indicated in Schedule 1A of the Indian Companies Act, 1956.

Apart from the above, the three Savings Bonds shall also be transferable in favour of the pledgee/creditor, if the pledgee/creditor invokes the pledge, hypothecation or lien as per Regulation 21 (3) of the G S Regulations.

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.

उत्तर. बैंकों और गैर-बैंकों द्वारा ज़ारी किए गए पीपीआई के मामले में, ग्राहक शिकायत निवारण के लिए रिजर्व बैंक - एकीकृत लोकपाल योजना, 2021 का सहारा ले सकते है। यह योजना आरबीआई की वेबसाइट https://cms.rbi.org.in लिंक पर उपलब्ध है।

ಉತ್ತರ. ಪಿಪಿಐ ನೀಡಿಕೆದಾರರು ಗ್ರಾಹಕರಿಗೆ ಈ ಕೆಳಗಿನ ಎರಡು ಪ್ರಕಾರಗಳಲ್ಲಿ ಯಾವುದೇ ಒಂದನ್ನು ನೀಡಬಹುದು:
ಎ] ಕನಿಷ್ಠ ವಿವರದ ಸೆಮಿ-ಕ್ಲೋಸ್ಡ್ ಪಿಪಿಐ;
ಬಿ]ಕೆವೈಸಿ ಕಂಪ್ಲೈಂಟ್ ಸೆಮಿಕ್ಲೋಸ್ಡ್/ಓಪನ್ ಸಿಸ್ಟಮ್ ಪಿಪಿಐ;

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.

ಉತ್ತರ.

ಮೇಲೆ ನಮೂದಿಸಿರುವ ಪ್ರಕಾರಗಳಲ್ಲಿ, ವಿವಿಧ ಕಾರಣಗಳಿಂದಾಗಿ [ಉದಾ. ಅನೇಕ ಸಹ-ಬ್ರ್ಯಾಂಡಿಂಗ್ ಪಾಲುದಾರರು, ವಾಲೆಟ್ಗಳು/ಕಾರ್ಡ್ಗಳಂತಹ ವಿಭಿನ್ನ ರೂಪಗಳಲ್ಲಿ ಪಿಪಿಐನ ನೀಡಿಕೆ] ಪಿಪಿಐ ನೀಡಿಕೆದಾರರು ಒಂದೇ ಗ್ರಾಹಕರಿಗೆ ಅನೇಕ ಪಿಪಿಐಗಳನ್ನು ನೀಡುತ್ತಿದ್ದರೆ, ಆಗ ಪಿಪಿಐ ನೀಡಿಕೆದಾರರು ಕೇಂದ್ರೀಕೃತ ಡೇಟಾಬೇಸ್ /ಮ್ಯಾನೇಜ್ಮೆಂಟ್ ಇನ್ಫಾರ್ಮೇಶನ್ ಸಿಸ್ಟಮ್ [ಎಮ್ಐಎಸ್]ಮೂಲಕ ಮಿತಿಗಳನ್ನು ಮೇಲ್ವಿಚಾರಣೆ ಮಾಡುತ್ತಾರೆ.

ಉದಾಹರಣೆಗಾಗಿ , ವಿವಿಧ ವ್ಯವಸ್ಥೆಗಳು/ ಫಾರ್ಮ್ ಪ್ಯಾಕ್ಟರ್[ರಚನೆಯ ಅಂಶದ] ಅಡಿಯಲ್ಲಿ ನಿರ್ದಿಷ್ಟ ಪಿಪಿಐ ನೀಡಿಕೆದಾರರಿಂದ ಗ್ರಾಹಕರಿಗೆ ನೀಡುವ ಎಲ್ಲಾ ಕೆವೈಸಿ ಕಂಪ್ಲೈಂಟ್ ಪಿಪಿಐಗಳಲ್ಲಿನ ಮೌಲ್ಯವನ್ನು ಸಂಯೋಜಿಸಿದ ನಂತರ ಯಾವುದೇ ಸಮಯದಲ್ಲಿ 1,00,000/-ಮಿತಿಯನ್ನು ಲೆಕ್ಕಹಾಕಲಾಗುತ್ತದೆ.

ಅಂತೆಯೇ ಪಿಪಿಐ ಎಮ್ಡಿಯ ಪ್ಯಾರಾಗ್ರಾಫ್ 9.1[i]ಯಲ್ಲಿನ 10,000ದ ಮಿತಿಯು ಎಲ್ಲಾ ಕನಿಷ್ಠ ವಿವರ ಪಿಪಿಐ[ ವಿವಿಧ ವ್ಯವಸ್ಥೆಗಳು/ ಫಾರ್ಮ್ ಪ್ಯಾಕ್ಟರ್ಅಡಿಯಲ್ಲಿ ಪಿಪಿಐ ನೀಡಿಕೆದಾರರಿಂದ ನೀಡಿದ] ಗಳಾದ್ಯಂತದಲ್ಲಿದೆ .

ಹೀಗಿದ್ದಾಗ್ಯೂ, ಪಿಪಿಐ-ಎಮ್ಡಿಯ ಪ್ಯಾರಾಗ್ರಾಫ್ 10 ರಲ್ಲಿ ನಮೂದಿಸಿದ [ಮಾಸ್ ಟ್ರಾನ್ಸಿಟ್ ಸಿಸ್ಟಮ್ [ಪಿಪಿಐ-ಎಮ್ಟಿಎಸ್]ಗಾಗಿ ಗಿಫ್ಟಿಂಗ್ ಉಪಕರಣಗಳು ಹಾಗೂ ಪಿಪಿಐಗಳು]ಎರಡು ವರ್ಗಗಳು ಮಿತಿಗಳನ್ನು ಒಳಗೊಂಡಿರುವುದಿಲ್ಲ.

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

ಉತ್ತರ. ಪಿಪಿಐ ಇಂಟರ್ಆಪರೇಬಿಲಿಟಿಯ ಸೌಲಭ್ಯವನ್ನುಯಾವುದೇ ಅಧಿಕೃತ ಬ್ಯಾಂಕ್ ಅಥವಾ ಬಾಂಕೇತರ ಪಿಪಿಐ ನೀಡಿಕೆದಾರರು ಒದಗಿಸಬಹುದು.

No. For the purpose of the Scheme, an OBU in India is not treated as an overseas branch of a bank in India.

Yes, Reserve Bank on an application will permit the individual employees/directors of an Indian promoter company engaged in the field of software for acquisition of shares of a JV/WOS abroad provided -the consideration for purchase does not exceed US$ 10,000 or its equivalent per employee in a block of five calendar years,the shares so acquired do not exceed 5% of the paid-up capital of the Joint Venture or Wholly Owned Subsidiary outside India, andafter allotment of such shares, the percentage of shares held by the Indian promoter company, together with shares allotted to its employees is not less than the percentage of shares held by the Indian promoter company prior to such allotment.Further, Reserve Bank may also on an application made to it by an Indian company engaged in the field of software allow its resident employees (including working directors) to purchase foreign securities under the ADR/GDR linked stock option scheme provided the consideration for purchase does not exceed US$ 50,000 or its equivalent in a block of five calendar years.

Yes. For a period not exceeding one year against the expected equity flows/issues as also against the expected proceeds of Non-convertible Debentures, External Commercial Borrowings, Global Depository Receipts and/or funds in the nature of Foreign Direct Investments, provided the bank is satisfied that the borrowing company has made firm arrangements for raising the aforesaid resources/funds. Such loans are required to be accommodated within the ceiling of 5% of outstanding advances of the previous year.

A. The requirement that Promoters / Promoter Group should have a past record of sound credentials and integrity as a part of ‘Fit and Proper’ criteria is a matter of overall judgment and no indicative criteria can be spelt out. [para 2 (B) of the guidelines]

Ans. Yes, it is mandatory for a PPI issuer to allow interoperability. It is mandatory for the PPI issuer to give the holders of full-KYC PPIs interoperability through authorised card networks and UPI. All modes of acceptance (including QR codes) and PPI issuance are required to be interoperable by March 31, 2022.

Reserve Bank has given general permission to mutual funds approved by SEBI to purchase foreign securities, subject to such terms and conditions as may be stipulated.

The loans to individuals against the security of shares, debentures and PSU bonds if held in physical form should not exceed the limit of Rs.10 lakhs per borrower and Rs.20 lakhs if the securities are held in dematerialized form. The maximum amount of finance that can be granted to an individual for IPOs is Rs.10 lakh. The corporates should not be extended finance for investment in other companies’ IPOs and NBFCs should not be provided finance for further lending to individuals for IPOs. Finance extended by a bank for IPOs should be reckoned as an exposure to capital market.

A. No. NOFHC is to be wholly-owned by the Promoters/Promoter Group. Therefore, it cannot be a listed company. [para 2 (C) (i) of the guidelines]

ಉತ್ತರ. ಇಂಟರ್ಆಪರೇಬಿಲಿಟಿಯನ್ನು ಕೆವೈಸಿ ಕಂಪ್ಲೈಟ್ ಪಿಪಿಐಗಳಿಗಾಗಿ ಮಾತ್ರ ಅನುಮತಿಸಲಾಗುತ್ತದೆ.

A uniform margin of 40% has been stipulated for all advances against shares.

The shares of NOFHC can be held by individuals, corporate entities and companies belonging to the Promoter Group. An LLP and trust do not fall under any of these categories. Therefore, an LLP or trust cannot hold voting equity shares directly in the NOFHC but can hold indirectly through a company in the Promoter Group which holds voting equity shares of the NOFHC.

ಉತ್ತರ. ಪಿಪಿಐ ಅನ್ನು ವಾಲೆಟ್ ರೂಪದಲ್ಲಿ ನೀಡಲಾಗಿದ್ದರೆ, ಪಿಪಿಐಗಳಾದ್ಯಂತ ಇಂಟರ್ಆಪರೇಬಿಲಿಟಿಯಯನ್ನು ಯುಪಿಐ ಮೂಲಕ ಸಕ್ರಿಯಗೊಳಿಸಲಾಗುತ್ತದೆ. ಪಿಪಿಐ ಅನ್ನು ಕಾರ್ಡ್ನ ರೂಪದಲ್ಲಿ ನೀಡಿದ್ದರೆ,ಕಾರ್ಡ ಇಂಟರ್ಆಪರೇಬಿಲಿಟಿಗಾಗಿ ಅಧಿಕೃತ ಕಾರ್ಡ್ ನೆಟ್ವರ್ಕ್ಗೆ ಸಂಯೋಜಿತವಾಗಿರುತ್ತದೆ.

Yes, the profit making banks can make donations during a financial year, aggregating upto one per cent of the published profit of the bank for previous year inclusive of donations made earlier under exempted category and donations to National funds and other funds. Banks should not make donations in excess of prescribed ceiling of one per cent as stated above. Unutilised amount of the permissible limit in a year should not be carried forward to the next year for the purpose of making donations.

The shares of NOFHC can be held by individuals, corporate entities and companies belonging to the Promoter Group. An LLP and trust do not fall under any of these categories. Therefore, an LLP or trust cannot hold voting equity shares directly in the NOFHC but can hold indirectly through a company in the Promoter Group which holds voting equity shares of the NOFHC.

ಉತ್ತರ. ಪಿಪಿಐಗಳನ್ನು ಒಳಗೊಂಡ ಅನಧಿಕೃತ/ಮೋಸದ ವಹಿವಾಟುಗಳ ಸಂದರ್ಭದಲ್ಲಿ ಬ್ಯಾಂಕೇತರ ಪಿಪಿಐ ನೀಡಿಕೆದಾರರು ಗ್ರಾಹಕರ ಬಾಧ್ಯತೆಯನ್ನು ನಿರ್ಧರಿಸುವ ಮೊತ್ತ ಹಾಗೂ ಪ್ರಕ್ರಿಯೆಯನ್ನು ಸ್ಪಷ್ಟವಾಗಿ ವಿವರಿಸುತ್ತಾರೆ. ಬ್ಯಾಂಕ್ ಪಿಪಿಐ ನೀಡಿಕೆ ದಾರರಿಗೆ ಕಸ್ಟಮರ್ ಪ್ರೊಟೆಕ್ಷನ್-ಲಿಮಿಟಿಂಗ್ ಲೈಬಿಲಿಟಿ ಆಫ್ ಕಸ್ಟಮರ್ಸ್ ಇನ್ ಅನ್ಆತರೈಸ್ಡ್ ಇಲೆಕ್ಟ್ರಾನಿಕ್ ಬ್ಯಾಂಕಿಂಗ್ ಟ್ರಾನ್ಸಾಕ್ಷನ್ಸ್ ಮೇಲೆ ಜುಲೈ6,2017ರ ದಿನಾಂಕದ ಡಿಪಾರ್ಟ್ಮೆಂಟ್ ಆಪ್ ಬ್ಯಾಂಕಿಂಗ್ ರೆಗ್ಯುಲೇಶನ್ ಸುತ್ತೋಲೆ ಡಿಬಿಆರ್.ನಂ.ಎಲ್ಇಜಿ.ಬಿಸಿ.78/09.07.005/2017-18ರಿಂದ ಮಾರ್ಗದರ್ಶನ ನೀಡಲಾಗುವುದು.

Yes, loss making banks can make donations totaling Rs.5 lakhs only in a financial year.

A. The overall track record of the Promoters/Promoter Group for at least 10 years will be seen. If the Promoters/Promoter Group incorporates a new CIC for the purpose of holding shares in the NOFHC, the track record of the Promoters/Promoter Group setting up the CIC will be seen. [para 2 (B) (b) of the guidelines]

Ans. The framework to limit the liability of customers (PPI holders) against unauthorised transactions in PPIs issued by non-bank issuers is given in paragraph 17 of the MD-PPIs and has come into effect from March 01, 2019. The FAQs given below relate to PPIs issued by non-bank PPI issuers.

Yes, the overseas branches of the banks can make donations abroad, provided the banks do not exceed the prescribed ceiling of one per cent of their published profit of the previous year.

A. Promoter Group for the purpose of these guidelines will be as per the definition given in Annex I to the guidelines.

Ans. Except for the PPIs issued under the arrangement of PPI-MTS as per paragraph 10.2 of MD-PPIs, the framework is applicable to all PPIs issued by authorised non-bank PPI issuers. Even in PPI-MTS, the cases of contributory fraud / negligence / deficiency on the part of the issuer are covered.

i) Boards of Directors of the banks should lay down policy and formulate detailed operational guidelines separately in respect of metropolitan, urban, semi-urban and rural areas covering all areas in respect of acquiring premises on lease/rental basis for the bank's use including delegation of powers at various levels. The decision of surrender or shifting of premises other than at rural centres is taken at central office level by a committee of senior executives. ii) Banks' Boards should lay down a separate policy in respect of loans granted to landlords who provide to them premises on lease/rental basis. The rate of interest to be charged on such loans should be fixed as per the lending rate directives issued by RBI with minimum PLR for the loans above Rs. 2 lakhs. The rate of interest may be simple rate or compound rate as per the usual practice of the bank as applicable to other term loans. iii) Banks should evolve a suitable machinery for dealing with genuine grievances of the landlord for expeditious disposal. iv) In case of negotiated contracts in respect of advances to landlords and rental (including taxes etc. and deposits of Rs.25 lakhs and above) in respect of premises taken on lease/rental basis by public sector banks, the cases will be reported to Central Bureau of Investigation as per the extant Government instructions. This requirement is not applicable to banks in the private sector.

A. Merely holding 10 per cent of the free float in the listed CIC would not make the investor a Promoter. If the investor does not form a part of the Promoters/Promoter Group as per the definition given in Annex I to the guidelines, he would not be considered as a Promoter.

The banks have been given the freedom to determine the service charges to be levied from their customers and the RBI has not prescribed any ceilings in this regard.

Ans. For the purpose of this MD, electronic payment transactions can be–

1. Remote / Online payment transactions: Transactions that do not require physical PPIs to be presented at the point of transactions e.g. wallets, card not present (CNP) transaction, etc.; and

2. Face-to-face / Proximity payment transactions: Transactions that require physical PPIs to be present at the point of transactions e.g. transactions at ATMs, PoS devices, etc.).

A. It is essential that clause (b) of para 2(C)(ii) (i.e. not less than 51 per cent of the voting equity shares of the NOFHC to be held by companies in which the public hold not less than 51 per cent of the voting equity shares) is satisfied in all cases, whereas clause (a) of para 2(C) (ii) does not stipulate any minimum shareholding. Accordingly, it is not necessary that an individual, along with his relatives (as defined in Section 6 of the Companies Act, 1956) and along with entities in which he and/or his relatives hold not less than 50 per cent of the voting equity shares should hold shares in the NOFHC. [para 2 (C) (ii) of the guidelines]

Ans. In order to get protection under this framework, it is mandatory for the customer (PPI holder) to register for SMS alerts.

A. Yes. It would be possible for an individual belonging to the Promoter Group, along with his relatives (as defined in Section 6 of the Companies Act, 1956) and along with entities in which he and/or his relatives hold not less than 50 per cent of voting equity shares, to have significant holdings in other Promoter Group companies in which the public holds not less than 51 per cent of voting equity shares.

Ans. It is mandatory for non-bank PPI issuers to send an SMS alert to the customer for any payment transaction in his / her account. In addition, an e-mail alert may also be sent, wherever registered. The transaction alert should have a contact number and / or e-mail id on which the customer can report unauthorised transactions or notify the objection.

A company in which public holds 51 per cent need not necessarily be listed. For the purpose of these guidelines, ‘public shareholding’ implies that no person along with his relatives (as defined in Section 6 of the Companies Act, 1956) and entities in which he and / or his relatives hold not less than 50 per cent of the voting equity shares, by virtue of his shareholding or otherwise, exercises ‘significant influence’ or ‘control’ (as defined in Accounting Standard 23) over the company.[para 2 (C) (ii) of the guidelines]

Ans. Non-bank PPI issuers shall provide customers with 24x7 access via website / SMS / e-mail / dedicated toll-free helpline for reporting unauthorised transactions and / or loss or theft of the PPI. Further, a direct link for lodging of complaints, with specific option to report unauthorised electronic payment transactions shall be provided by non-bank PPI issuers on the mobile app / home page of their website / any other evolving acceptance mode.

A company in which public holds 51 per cent need not necessarily be listed. For the purpose of these guidelines, ‘public shareholding’ implies that no person along with his relatives (as defined in Section 6 of the Companies Act, 1956) and entities in which he and / or his relatives hold not less than 50 per cent of the voting equity shares, by virtue of his shareholding or otherwise, exercises ‘significant influence’ or ‘control’ (as defined in Accounting Standard 23) over the company.[para 2 (C) (ii) of the guidelines]

Ans. On reporting of an unauthorised payment transaction or loss of instrument, non-bank PPI issuers shall take immediate action to prevent further unauthorised payment transactions in the PPI account of the customer. Any further transactions debit on such an instrument will be the liability of the issuer.

Yes, to the extent permissible under the relevant laws. However, it will not be reckoned for the purpose of calculation of promoter shareholding in the NOFHC.

Ans. The liability of a customer in cases of contributory fraud / negligence / deficiency on the part of the non-bank PPI issuer is zero. PPI-MTS issuers are also covered for such acts / events.

Yes, to the extent permissible under the relevant laws. However, it will not be reckoned for the purpose of calculation of promoter shareholding in the NOFHC.

Ans. It is always advisable to report any unauthorised transaction in the account of the customer. However, an issuer cannot deny compensation against contributory fraud / negligence / deficiency on the part of the non-bank PPI issuer, on the ground that the customer has not reported any unauthorised transaction in his / her account.

A. The percentage holding of the NOFHC/bank will be computed with reference to the date of the investment.

Ans. The ‘per transaction customer liability’ in such cases will depend on the number of days lapsed between the receipt of transaction communication by the customer from the non-bank PPI issuer and the reporting of unauthorised transaction by the customer to the non-bank PPI issuer. If the issuer is reported within three days’ of receiving of communication, the customer liability will be zero. Similarly, for any such transaction reported between four and seven days of receiving of communication, the customer liability will be limited to a maximum of ₹ 10,000/. Reporting beyond seven days’ time will be dealt in accordance with the Board approved policy of the non-bank PPI issuer.

A. As per Para 2 C (vii) of the guidelines, only the regulated financial sector entities in which a Promoter Group has ‘significant influence’ or ‘control’ (as defined in Accounting Standard 23) will be held under the NOFHC. Thus, the NOFHC does not need to wholly own the regulated financial services entities and direct participation in such entities by non-Promoter Group individuals/ companies is permitted. The pattern of shareholding and the capital requirements in the regulated financial services entities held by the NOFHC shall be as prescribed by the respective sectoral regulators. The FDI limits in such entities would be as per extant FDI policy of the Government of India/ Notifications issued under FEMA. As regards the bank, the foreign shareholding would be as per para 2 (F) of the guidelines.

Ans. The number of days mentioned above shall be counted after excluding the date of receiving the communication from the non-bank PPI issuer.

A. The bank as well as the other financial services entities in which the Promoter Group has ‘significant influence’ or ‘control’ (as defined in Accounting Standard 23) and that are regulated by RBI or other financial sector regulators will have to be necessarily held under the NOFHC. If any financial service is not regulated by RBI or any of the other financial sector regulators, any entity in the Promoter Group providing such service, cannot come under the NOFHC. The Promoter Group will not be required to divest its holdings in such entities. [para 2 (C) (iii) of the guidelines]

Ans. In cases where the loss is due to negligence by the customer, such as where he / she has shared the payment credentials, the customer will bear the entire loss until he / she reports the unauthorised transaction to the non-bank PPI issuer.

A. If a Promoter Group entity rendering outsourced services is regulated by any of the financial sector regulators, it would come under the NOFHC. If the said entity is not regulated by any of the financial sector regulators, it cannot come under the NOFHC. The position remains the same irrespective of whether the outsourced services are provided to the regulated financial services entities of the group or to other group entities, including non financial services entities or to non-group entities. [para 2 (C) (vii) of the guidelines]

Ans. Any loss occurring after reporting of the unauthorised transaction shall be borne by the non-bank PPI issuer.

Para 2(C)(iii) of the guidelines provide that only non-financial services companies/entities and non-operative financial holding company in the Group and individuals belonging to Promoter Group will be allowed to hold shares in the NOFHC. Accordingly, a non-operative financial holding company though regulated by RBI will remain outside NOFHC. NBFC (Investment Companies) which hold/deal in equity shares of Promoter Group Companies cannot be under the NOFHC because, in terms of para 2 (I) (IV) (a) of the Guidelines, the financial entities held by NOFHC shall not have any credit and investment (including investments in the equity/debt capital instruments) exposure to the Promoters/Promoter Group entities or individuals associated with the Promoter Group or the NOFHC. Therefore, NBFC (Investment Companies), which would include CICs and other non-operative holding companies, would remain outside NOFHC. However, if there are investments in voting equity shares of regulated financial sector entities in which the Group has significant influence or control, such entities will have to be brought under the NOFHC. ‘Investment Company’ as defined under para 2(I)(vi) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Direction, 1998, means any company which is a financial institution carrying on, as its principal business, the acquisition of securities.

Ans. The non-bank PPI issuer shall credit (notional reversal / shadow reversal) the amount involved in the unauthorised electronic payment transaction to the customer’s PPI within 10 days from the date of such notification by the customer. Such reversal has to be effected even if it breaches the maximum permissible limit applicable to that type / category of PPI. The credit shall be value-dated to be as of the date of the unauthorised transaction.

Para 2(C)(iii) of the guidelines provide that only non-financial services companies/entities and non-operative financial holding company in the Group and individuals belonging to Promoter Group will be allowed to hold shares in the NOFHC. Accordingly, a non-operative financial holding company though regulated by RBI will remain outside NOFHC. NBFC (Investment Companies) which hold/deal in equity shares of Promoter Group Companies cannot be under the NOFHC because, in terms of para 2 (I) (IV) (a) of the Guidelines, the financial entities held by NOFHC shall not have any credit and investment (including investments in the equity/debt capital instruments) exposure to the Promoters/Promoter Group entities or individuals associated with the Promoter Group or the NOFHC. Therefore, NBFC (Investment Companies), which would include CICs and other non-operative holding companies, would remain outside NOFHC. However, if there are investments in voting equity shares of regulated financial sector entities in which the Group has significant influence or control, such entities will have to be brought under the NOFHC. ‘Investment Company’ as defined under para 2(I)(vi) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Direction, 1998, means any company which is a financial institution carrying on, as its principal business, the acquisition of securities.

Ans. The notional credit so received can be used on resolution of complaint and establishing the liability of the customer by the non-bank PPI issuer. However, in any circumstances, this period cannot exceed 90 days from the date of receipt of the complaint.

It is not necessary that a NOFHC should be held only by non-financial services companies/ entities. It can be held by a CIC or a non-operating holding company. The regulated financial business / entities of the holding company, if any, cannot remain with the holding company. It has to come under the NOFHC. [para 2 (C) (iii) & (vii) of the guidelines]

Ans. The burden of proving the customer liability in case of unauthorised electronic payment transactions lies on the non-bank PPI issuer.

It is not necessary that a NOFHC should be held only by non-financial services companies/ entities. It can be held by a CIC or a non-operating holding company. The regulated financial business / entities of the holding company, if any, cannot remain with the holding company. It has to come under the NOFHC. [para 2 (C) (iii) & (vii) of the guidelines]

A. a (i) There would be no relaxation for the pattern of shareholding in the NOFHC with regard to the provisions at the para 2 (C) (iii) of the guidelines

(ii) For the purpose of these guidelines, NBFC (Investment Companies) (which would include CIC and a non-operative holding company) would be held outside the purview of the NOFHC. [para 2 (C) (iii) of the guidelines]. The regulated financial business/entities of the holding company, if any, cannot remain with the holding company. It has to come under the NOFHC. [para 2 (C) (iii) & (vii) of the guidelines]

(iii) In the case of other NBFCs in which public holds more than 51 percent of voting equity shares, wishes to set up a bank or convert itself into a bank, it must transfer all its regulated financial services business to a separate company/companies and transfer the shareholding in such companies to the NOFHC. After it has transferred the regulated financial services business, it can set up a NOFHC, provided it meets the requirements of para 2 (C) (ii) and (iii) of the guidelines.

(b) As stated above, before the listed NBFC holds shares in the NOFHC, it must transfer all regulated financial services business to a new company and shares in that new company must be held by the NOFHC. Conversion of the listed NBFC into a listed non operating holding company would enable meeting the requirement of para 2(C) (iii) of the guidelines provided the listed non operating holding company meets the requirement of para 2(C)(ii)(b) of the guidelines i.e. the public hold not less than 51 percent voting equity shares in the company.

A. Yes. An existing non-operating listed holding company, with more than 51 percent public shareholding, will be eligible to promote a Non-Operative Financial Holding Company (NOFHC). [para 2 (C) (ii) (b) and 2 (C) (iii) of the guidelines]

A. A non operating holding company being a promoter of NOFHC and holding investments in unregulated financial sector entities and non financial sector entities will be required to be registered as a CIC with RBI if it meets the criteria laid down in para 2 and 3 (h) of Notification No DNBS.PD. 219/CGM(US)-2011 dated January 05, 2011 regarding Regulatory Framework for Core Investment Companies.

A. NOFHC, being a non-operative financial holding company, cannot hold physical assets belonging to the Group and charge for them on an arm’s length basis. A holding company of the Promoter Group, which holds the NOFHC can undertake related businesses such as technology services or banking correspondent services or distribution services on its own, or through a subsidiary. If the non-operative holding company is a CIC or NBFC, the relevant regulations will be applicable.

A. No. An existing non-operating listed holding company, with more than 51 per cent public shareholding cannot operate as the NOFHC as the NOFHC has to be wholly-owned by the Promoter / Promoter Group. The above cited example does not meet this criteria as the non-operating listed holding company has equity shareholding from non-promoters/promoter group entities. However, this existing non-operative listed holding company in which public shareholding exceeds 51 per cent can promote a NOFHC.

A non operating holding company being a promoter of NOFHC will be required to be registered as a CIC with RBI if it meets the stipulated criteria.

If the non operating holding company does not meet the criteria for being defined as a Core Investment Company but is an NBFC (Investment Company) it will be required to be registered with RBI as NBFC(Investment Company).

A. For the purpose of these guidelines, the investment company (SPV/CIC) that holds shares only in non-financial companies of the Promoter Group would not be considered as a financial services company and would be held outside the purview of the NOFHC. [para 2 (C) (iii) of the guidelines]

A. A non-operative financial holding company is a company which has no operational activities and holds the non-financial sector companies of the Promoter Group and which has no subsidiaries, joint venture or associate or other controlled entities in the financial sector except investments in the NOFHC. Such company can hold voting equity shares in the NOFHC in accordance with Paragraph 2 (C) (ii) and (iii) of the guidelines. The said holding company can hold upto 100 per cent of the voting equity of the NOFHC, if it has public shareholding of not less than 51 per cent. [para 2 (C)(ii)(b) of the guidelines].

A. NOFHC cannot provide any advisory services to any entity both within the Group and outside the Group. The NOFHC can make investment in bank deposits, money market instruments, government securities and actively traded bonds and debentures besides lending to or investing in entities that are held under it. [para 2(H)(i)(c) of the guidelines]

A. (a) It is not necessary that there has to be an individual promoter. The company wherein 100% of voting equity shares are held by the public can set up the NOFHC and hold to the extent of 100% of the voting equity shares of the NOFHC if such a company is a non-financial services company or a non-operating financial holding company in the group. Further, the company itself will be deemed to be the Promoter and all the provisions of the guidelines applicable to the Promoter and the Promoter Group will apply to it.

(b) The listed company cannot be the NOFHC. It will need to form a NOFHC which is wholly owned by it. The number of independent Directors on the Board of the NOFHC should be in compliance with the provisions of paragraph 2 (G) (iv) of the guidelines.

A. For the purpose of these guidelines, a non-operative holding company that holds shares only in non-financial companies of the Promoter Group would not be considered as a financial services company and would be held outside the purview of the NOFHC.

A. Promoter Group entities, which hold investments in group companies or investments in the normal course of business, are not required to come under the NOFHC. They can hold shares in the NOFHC, provided the conditions stipulated in para 2(C) (ii) & (iii) of the guidelines are met.

A. No. A financial services company of the Promoter Group cannot participate in the voting equity shares of the NOFHC.

If the Promoters/Promoter Group which has a financial services company, listed or otherwise, wishes to set up a bank, the said financial services company must transfer all its regulated financial services business to a separate company/companies and transfer the shareholding in such companies to the NOFHC. After it has transferred the regulated financial services business, it will cease to be a financial services company, and it can set up a NOFHC provided, the public shareholding in it is not less than 51 per cent. [ Paragraph 2(C)(ii) and (iii) of the guidelines]

A non operating holding company that holds investments in unregulated financial sector entities and non financial sector entities will be eligible to hold voting equity shares in the NOFHC. It will be required to be registered as a CIC or NBFC with RBI if it meets the stipulated criteria.

A non operating holding company that holds investments in unregulated financial sector entities and non financial sector entities will be eligible to hold voting equity shares in the NOFHC. It will be required to be registered as a CIC or NBFC with RBI if it meets the stipulated criteria.

A. Activities such as credit cards, primary dealer, leasing, hire purchase, factoring etc., can be conducted by a bank departmentally or through a separate entity or entities outside the bank. If such an activity is to be carried through a separate entity, then it should be carried on by a subsidiary, joint venture or associate of the NOFHC, and not of the bank, unless it is legally required or specifically permitted by RBI. [para 2 (C) (iv) of the guidelines].

A. As per the extant instructions, prior permission of RBI is necessary for the banks to invest in the equity of subsidiaries and financial services entities. Accordingly, banks would require RBI’s approval for setting up subsidiaries / joint ventures / associates for conducting activities permitted to banks under Section 6 of the BR Act, 1949. The general principle in this regard is that para-banking activities, such as credit cards, primary dealer, leasing, hire purchase, factoring etc., can be conducted either inside the bank departmentally or outside the bank through subsidiary/ joint venture /associate. Activities such as insurance, stock broking, asset management, asset reconstruction, venture capital funding and infrastructure financing through Infrastructure Development Fund (IDF) sponsored by the bank can be undertaken only outside the bank. Lending activities must be conducted from inside the bank. However, other regulated financial servicesentities (excluding entities engaged in credit rating and commodity broking) in which the Promoter/Promoter Group has ‘significant influence’ or ‘control’ (as defined in Accounting Standard 23) have to be held under the NOFHC and not under the bank unless it is legally required or specifically permitted by RBI. [para 2 (C) (iv) of the guidelines].

A. In the normal course, a bank held under the NOFHC will not be permitted to have subsidiaries. A subsidiary of the bank can be set up only where it is legally required or specifically permitted by RBI [para 2(C) (vi) of the guidelines]. FDI investments in the subsidiary of the bank or in the financial services entities held under the NOFHC would be as per the DIPP guidelines of Government of India/Notifications issued under FEMA.

A. Setting-up would mean incorporating a new entity or acquiring shares in an existing entity in which the Promoter Group will have ‘significant influence’ or ‘control’ (as defined in Accounting Standard 23) and which carries on regulated financial services business whereby such entities would be required to be a subsidiary, joint venture or associate of the NOFHC. [para 2 (C) (vi) of the guidelines]

A. Normally the bank will not be permitted to set up a subsidiary / joint venture under it. However, a bank may be permitted to set-up a subsidiary / joint venture under it, where it is legally required or specifically permitted by RBI (For example, a banking subsidiary for carrying on the business of banking exclusively outside India). [para 2 (C) (vi) of the guidelines]

A. Promoters/Promoter Groups will not be permitted to set up any new financial services entity within three years from the date of commencement of business of the NOFHC, even if such intention is mentioned in the applications. [para 2 (C) (vi) of the guidelines]

A. Yes. The financial services entities of the Promoter Group which are not regulated by RBI or any other financial sector regulator cannot be brought under the NOFHC structure. [para 2 (C) (iii) of the guidelines]