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FAQs on Master Directions on Priority Sector Lending Guidelines

L. Co-lending by Banks & NBFCs

Query 49: What will be the fate of loans originated by NBFC, which do not qualify under due diligence checks to comply with RBI regulations on KYC and Outsourcing of activities. +

Clarification: If the Agreement entails a prior, irrevocable commitment on the part of the bank, it has been advised that the partner bank and NBFC shall have to put in place suitable mechanisms for ex-ante due diligence by the bank. Such due diligence should ensure compliance with RBI regulations on KYC and outsourcing of activities before disbursal of the loans by the NBFC.

Query 50: Does the term back-to-back mean loan accounts will first be opened by NBFC and thereafter bank will open loan accounts in its books or both will open loan accounts and fund them simultaneously based on the loan agreement signed by the borrower with the NBFC. +

Clarification: Back-to-back basis implies that the loans will be first opened by NBFC and then bank will open loan accounts subsequently.

Query 51: Based on the loan documents executed, will the NBFC sanction and disburse the whole amount and thereafter approach the bank for reimbursement or will it sanction/ disburse its part of the loan and then approach the bank to sanction/ disburse its part. +

Clarification: The bank and the NBFC can decide on this aspect as per the Master agreement between them.

Coordinated Portfolio Investment Survey – India

What to report under CPIS?

Q13. What is the unit of reporting the data in CPIS? +

Ans: Reporting entities should report the data in the unit mentioned in the survey schedule (for eg., INR Lakh).

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

13. What action is taken if financial companies which are lending or making investments as their principal business do not obtain a Certificate of Registration from the Reserve Bank? +

If companies that are required to be registered with the Reserve Bank as NBFCs, are found to be conducting non-banking financial activity, such as, lending, investment or deposit acceptance as their principal business, without seeking registration, the Reserve Bank can impose penalty or fine on them or can even prosecute them in a court of law. If members of public come across any entity which does non-banking financial activity but does not figure in the list of authorized NBFC on RBI website, they should inform the nearest Regional Office of the Reserve Bank, for appropriate action to be taken for contravention of the provisions of the RBI Act, 1934.

Foreign Investment in India

Q.13: Whether the percentage of foreign investment should be calculated at the time of issuance of Employee Stock Options (ESOP) or vesting stage or exercising stage ? +

Answer: Foreign investment percentage has to be calculated on a fully diluted basis i.e. at the time of issuance of Employee Stock Options.

Domestic Deposits

I. Domestic Deposits

13. Whether banks can open savings bank accounts in the name of Government Departments/ Government Scheme? +

Savings bank account cannot be opened in the name of the Government Department/ Government Scheme, except in respect of deposits of Government organizations/ agencies listed below:

Primary Co-operative Credit Society which is being financed by the bank.
Khadi and Village Industries Boards.
Agriculture Produce Market Committees.
Societies registered under Societies Registration Act, 1860 or any other corresponding law in force in State or a Union Territory.
Companies governed by the Companies Act, 1956 which have been licensed by the Central Government under Section 25 of the said Act, or under the corresponding provision in the Indian Companies Act, 1913 and permitted, not to add to their names the word “Limited” or the words “Private Limited”.
Institutions other than those mentioned in clause (i) above and whose entire income is exempt from payment of income tax under Income-Tax Act, 1961.
Government departments/ bodies/ agencies in respect of grants/ subsidies released for implementation of various programmes/ Schemes sponsored by Central Government/ State Governments subject to production of an authorisation from the respective Government departments to open savings bank accounts.
Development of Women and Children in Rural Areas (DWCRA).
Self-help Groups (SHGs), registered or unregistered, which are engaged in promoting savings habits among their members.
Farmers’ Clubs – Vikas Volunteer Vahini (VVV).

Remittances (Money Transfer Service Scheme (MTSS) and Rupee Drawing Arrangement (RDA))

Money Transfer Service Scheme (MTSS)

13. Is there any limit on the amount of money which can be sent under MTSS ? +

A cap of USD 2,500 has been placed on individual remittances under the scheme. In addition, thirty remittances can be received by a single individual beneficiary under the scheme during a calendar year.

Core Investment Companies

Core Investment Companies (CICs)

13. Would CICs-ND-SI require NOC in terms of Regulation 7 of FEMA (Transfer or Issue of Any Foreign Security) Amendment Regulations Act 2004 in case they want to invest abroad? +

Ans: Yes, as they are regulated by RBI, they would require NOC from Department of Non-Banking Supervision (DNBS) for making investments in the financial sector. However, a registered CIC making investments in the non-financial sector need not obtain prior approval from the Department of Non-Banking Supervision (DNBS), RBI. It will only need to report such investments to the Department within 30 days of such investment.

Targeted Long Term Repo Operations (TLTROs)

FAQs pertaining to TLTRO 2.0

Q13: Will the specified securities acquired from TLTRO funds and kept in HTM category be included in computation of Adjusted Net Bank Credit (ANBC) for the purpose of determining priority sector targets/sub-targets? +

Ans: In terms of the press release 2237/2019-2020 dated April 17, 2020 notifying the TLTRO 2.0 scheme, at least 50 per cent of the total funds availed under the scheme has to be deployed in specified securities issued by small NBFCs of asset size of ₹ 500 crores and below, mid-sized NBFCs of asset size between ₹ 500 crores and ₹ 5000 crores and MFIs. The objective is to ease any liquidity stress and/or impediments to market access that these small and mid-sized entities might be facing. In order to incentivise banks’ investment in the specified securities of these entities, it has been decided that a bank can exclude the face value of such securities kept in the HTM category from computation of adjusted non-food bank credit (ANBC) for the purpose of determining priority sector targets/sub-targets. This exemption is only applicable to the funds availed under TLTRO 2.0.

FAQs on Non-Banking Financial Companies

Net owned fund

13. The NBFCs have been advised that the definition of Net Owned Fund (NOF) has been modified to include preference shares. Whether the entire preference share capital would be included in the NOF ? It may also be clarified whether the new definition of NOF would be applicable to minimum entry point norm of Rs. 25.00 lakh for Registration . +

The definition of NOF has been provided in Section 45IA of the Reserve Bank of India Act, 1934. This definition would be applicable to the computation of minimum capital fund for the purpose of Statutory Registration of an NBFC with the Reserve Bank of India. For the purpose of acceptance of public deposit and compliance of the prudential norms, the definition of NOF has been modified and it would include the paid up amount of preference shares which are compulsorily convertible into equity. However, the redeemable preference share capital would not be included in the definition of NOF or the Owned Fund.

External Commercial Borrowings (ECB) and Trade Credits

E. AVERAGE MATURITY PERIOD

13. Can door-to-door maturity be used in lieu of average maturity? +

No.

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

Paytm Payments Bank Wallet

13. I have a cashback due in my wallet with Paytm Payments Bank. Can I receive this cashback after March 15, 2024? +

Yes. Refunds and cashbacks are allowed to be credited.

Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999

Eligible entities and requirements to submit the FLA return

Q13. Is it required to submit Annual Performance Report for ODI if we have submitted FLA Return? +

Ans: FLA return and Annual Performance Report (APR) for ODI are two different returns and monitored by two different departments of RBI. So, you are required to submit both the returns if these are applicable for your entity. For more information on APR, please refer to the Master Direction – Reporting under Foreign Exchange Management Act, 1999 on RBI’s website.

Biennial survey on Foreign Collaboration in Indian Industry (FCS)

Some important definitions and concepts

Q13. What is a foreign subsidiary? +

Ans.: An Indian company is called as a Foreign Subsidiary if a non-resident investor owns more than 50 per cent of the voting power / equity capital or where a non-resident investor and its subsidiary(s) combined own more than 50 per of the voting power / equity capital of an Indian enterprise.

Government Securities Market in India – A Primer

13. Why does the price of G-Sec change? +

The price of a G-Sec, like other financial instruments, keeps fluctuating in the secondary market. The price is determined by demand and supply of the securities. Specifically, the prices of G-Secs are influenced by the level and changes in interest rates in the economy and other macro-economic factors, such as, expected rate of inflation, liquidity in the market, etc. Developments in other markets like money, foreign exchange, credit, commodity and capital markets also affect the price of the G-Secs. Further, developments in international bond markets, specifically the US Treasuries affect prices of G-Secs in India. Policy actions by RBI (e.g., announcements regarding changes in policy interest rates like Repo Rate, Cash Reserve Ratio, Open Market Operations, etc.) also affect the prices of G-Secs.

Retail Direct Scheme

Know Your Customer (KYC) related queries

13. What are the ways of doing my KYC verification for Retail Direct Gilt (RDG) account? +

There are two ways of doing KYC verification – CKYC based and video KYC.

Housing Loans

13. Can you repay your loan ahead of schedule? Is pre-payment of loan allowed? +

Yes, most banks allow you to repay the loan ahead of schedule by making lump sum payments. However, many banks charge early repayment penalties up to 2-3% of the principal amount outstanding. Prepayment penalty may vary according to the reasons and source of funds - if you obtain a loan from another bank for pre-payment the charges are usually higher than when you pay from your own sources. However, you may credit more than your EMI amount into your loan account on a periodic basis and bring down your interest burden as and when funds are available with you. Most banks do not charge a pre-payment penalty if you deposit more than your EMI payable on a periodic basis. Please check such stipulations while availing the loan.

Indian Currency

B) Banknotes

5. What is currency paper made up of? +

The paper currently being used for printing of banknotes in India is made by using 100% cotton.

Coordinated Portfolio Investment Survey – India

What to report under CPIS?

Q14. If the responding entity does not have any portfolio investment assets during the reference period, do they need to participate in the survey?

Ans: If the responding entity does not have any portfolio investment asset during the reference period, then that entity is required to submit NIL survey schedule to the generic email ID of the Reserve Bank as per the instruction in the survey schedule.

Government Securities Market in India – A Primer

14. How does one get information about the price of a G-Sec? +

14.1 The return on a security is a combination of two elements (i) coupon income – that is, interest earned on the security and (ii) the gain / loss on the security due to price changes and reinvestment gains or losses.

14.2 Price information is vital to any investor intending to either buy or sell G-Secs. Information on traded prices of securities is available on the RBI website http://www.rbi.org.in under the path Home → Financial Markets → Financial Markets Watch → Order Matching Segment of Negotiated Dealing System. This will show a screen containing the details of the latest trades undertaken in the market along with the prices. Additionally, trade information can also be seen on CCIL website http://www.ccilindia.com/OMHome.aspx. On this page, the list of securities and the summary of trades is displayed. The total traded amount (TTA) on that day is shown against each security. Typically, liquid securities are those with the largest amount of TTA. Pricing in these securities is efficient and hence UCBs can choose these securities for their transactions. Since the prices are available on the screen they can invest in these securities at the current prices through their custodians. Participants can thus get near real-time information on traded prices and take informed decisions while buying / selling G-Secs. The screenshots of the above webpage are given below:

NDS-OM Market

The website of the Financial Benchmarks India Private Limited (FBIL), (www.fbil.org.in) is also a right source of price information, especially on securities that are not traded frequently.

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

14. Where can one find list of Registered NBFCs and instructions issued to NBFCs? +

The list of registered NBFCs is available on the web site of Reserve Bank of India and can be viewed at www.rbi.org.in → Sitemap → NBFC List. The instructions issued to NBFCs from time to time are also hosted at www.rbi.org.in → Notifications → Master Circulars → Non-banking, besides, being issued through Official Gazette notifications and press releases.

Domestic Deposits

I. Domestic Deposits

14. At what rate the interest is payable on the deposit standing in the name of deceased depositor? +

In the case of term deposit standing in the name/s of a deceased individual depositor, or two or more joint depositors, where one of the depositor has died, the criterion for payment of interest on matured deposits in the event of death of the depositor in the above cases has been left to the discretion of individual banks subject to their Board laying down a transparent policy in this regard.
In the case of balances lying in current account standing in the name of a deceased individual depositor/ sole proprietorship concern, interest should be paid only from May 1, 1983 or from the date of death of the depositor, whichever is later, till the date of repayment to the claimant/s at the rate of interest applicable to savings deposit as on the date of payment. However, in the case of NRE deposit, if the claimants are residents, the deposit on maturity is treated as domestic rupee and interest is paid for the subsequent period at a rate applicable to the domestic deposit of similar maturity.

Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999

Eligible entities and requirements to submit the FLA return

Q14. If non-resident shareholders of an entity have transferred their shares to the residents during the reporting period, then whether that entity is required to submit the FLA return? +

Ans: If all non-resident shareholders of an entity have transferred their shares to the residents during the reporting period and the entity does not have any outstanding investment in respect of inward and outward FDI as on end-March of the latest FY, then the entity need not submit the FLA return.

External Commercial Borrowings (ECB) and Trade Credits

E. AVERAGE MATURITY PERIOD

14. In case of an ECB raised from foreign equity holder and utilized for general corporate purpose/working capital/repayment of Rupee loans, can repayment of principal of ECB start before the completion of 5 years? +

Yes, however, the ECB should have minimum average maturity period of 5 years.

Remittances (Money Transfer Service Scheme (MTSS) and Rupee Drawing Arrangement (RDA))

Money Transfer Service Scheme (MTSS)

14. Can cash payment be made to the beneficiary under MTSS ? +

Amounts up to INR 50,000/- may be paid in cash to a beneficiary in India. These can also be loaded on to a pre-paid card issued by banks. Any amount exceeding this limit shall be paid by means of account payee cheque/ demand draft/ payment order, etc., or credited directly to the beneficiary's bank account. However, in exceptional circumstances, where the beneficiary is a foreign tourist, higher amounts may be disbursed in cash.

Core Investment Companies

Core Investment Companies (CICs)

14. Do CICs which are exempt from registration, and investing overseas need NOC from DNBS? +

Ans: Exempted CICs desirous of making overseas investment in financial sector shall first need to hold a Certificate of Registration (CoR) from Reserve Bank of India (the Bank) and will have to comply with all the regulations applicable to registered CIC-ND-SI. However, they need not obtain NOC from the Bank if their investments overseas are in the non-financial sector.

FAQs on Non-Banking Financial Companies

Ceiling on deposits

14. The earlier ceiling on borrowings by NBFCs was 10 times the NOF. What are the present ceilings? +

A. As per the new Regulatory framework, there is no overall ceiling on the borrowings of NBFCs. However, limits have been prescribed for acceptance of Public Deposits as indicated here.

Level of credit rating	Ceiling on public deposits (as a multiple of NOF)
	EL/HP Cos.	LC/ICs
AAA	4.0	2.0
AA	2.5	1.0
A	1.5	0.5
A - (CRISIL & ICRA) }
BBB (CARE) }	0.5	Nil
BBB- (DCR India) }

It is to be noted that there is an in-built ceiling on the total borrowings of the NBFCs accepting deposits from public, because they are required to maintain a capital adequacy ratio of 10 per cent of their risk weighted assets effective from 31.3.1998 and 12 per cent from 31.3.1999. Their capacity to create assets and raise corresponding borrowings will be restricted because of capital adequacy norms.

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

Paytm Payments Bank Wallet

14. I have a wallet with Paytm Payments Bank. Can I close this wallet and have the balance transferred to my bank account with another bank? +

Yes. You may approach Paytm Payments Bank or use its banking app to close your wallet and transfer the balance to an account maintained with another bank in the case of full KYC wallets. In the case of minimum KYC Wallets , you may use the available balance or request for a refund

Foreign Investment in India

Q.14: Whom to approach for clarifications if any required, related to Schedule 5 to FEMA 20(R) +

Answer: Financial Markets Regulation Department, RBI.

Biennial survey on Foreign Collaboration in Indian Industry (FCS)

Some important definitions and concepts

Q14. What is a foreign associate? +

Ans.: An Indian company is called as Foreign Associate if non-resident investor owns at least 10% and no more than 50% of the voting power/equity capital or where non-resident investor and its subsidiary(s) combined own at least 10% but no more than 50% of the voting power/equity capital of an Indian enterprise.

Retail Direct Scheme

Know Your Customer (KYC) related queries

14. How does the CKYC process work? +

Enter your PAN card number and date of birth to retrieve details available in CKYC.
Provide address details, scanned copy of your signature, bank account details and nominee details.
Authenticate the user agreement form using Aadhaar by submitting the OTP sent on your mobile number linked to Aadhaar.

Targeted Long Term Repo Operations (TLTROs)

FAQs pertaining to TLTRO 2.0

Q14: Para 1 of the press release dated April 17, 2020 on TLTRO 2.0 states that the objective of TLTRO 2.0 is to channel liquidity to small and mid-sized corporates, including NBFCs and MFIs. However, in para 2 it has been stated that the funds availed under TLTRO 2.0 will have to be deployed in investment grade bonds, commercial paper (CPs) and non-convertible debentures (NCDs) of Non-Banking Financial Companies (NBFCs) and MFIs. Is the current tranche of TLTRO 2.0 is targeted only for NBFCs and MFIs?

Ans: The funds availed under TLTRO 2.0 are to be deployed in investment grade bonds, commercial paper (CPs) and non-convertible debentures (NCDs) of Non-Banking Financial Companies (NBFCs) and MFIs in the manner outlined in the press release dated April 17, 2020.

Housing Loans

14. What are Switch over charges/ balances transfer charges? +

When other banks reduce the interest rate, you may prefer to close your account with the bank with whom you are banking, to avail of the loan from the bank offering reduced rates of interest. You have to pay pre-payment charges for doing so. In order to ensure that their customers do not approach other banks for availing reduced interest rates, banks allow customers to switch over from a higher interest loan to a lower interest loan by paying a switch over fees which is lesser than the pre-payment charges. Generally switchover fee is taken as percentage of the outstanding loan amount.

Keep up-dating yourself on various changes in the home loan market. Visit the branch, discuss with the officials to get the best out of any changes in the home loan scenario.

Indian Currency

B) Banknotes

6. How many languages appear in the language panel of Indian banknotes? +

Fifteen languages are appearing in the language panel of banknotes in addition to Hindi prominently displayed in the centre of the note and English on the reverse of the banknote.

Coordinated Portfolio Investment Survey – India

What to report under CPIS?

Q15. What information should be reported in the CPIS, if balance sheet of the entity is not audited before the due date of submission? +

Ans: If the entity’s accounts are not audited before the due date of submission, then they should report in the survey based on unaudited (provisional) account.

Government Securities Market in India – A Primer

15. How are the G-Secs transactions reported? +

15.1 Transactions undertaken between market participants in the OTC / telephone market are expected to be reported on the NDS-OM platform within 15 minutes after the deal is put through over telephone. All OTC trades are required to be mandatorily reported on the NDS-OM reported segment for settlement. Reporting on NDS-OM is a two stage process wherein both the seller and buyer of the security have to report their leg of the trade. System validates all the parameters like reporting time, price, security etc. and when all the criterias of both the reporting parties match, the deals get matched and trade details are sent by NDS-OM system to CCIL for settlement.

15.2 Reporting on behalf of entities maintaining gilt accounts with the custodians is done by the respective custodians in the same manner as they do in case of their own trades i.e., proprietary trades. The securities leg of these trades settles in the CSGL account of the custodian. Funds leg settle in the current account of the PM with RBI.

15.3 In the case of NDS-OM, participants place orders (amount and price) in the desired security on the system. Participants can modify / cancel their orders. Order could be a ‘bid’ (for purchase) or ‘offer’ (for sale) or a two way quote (both buy and sell) of securities. The system, in turn, will match the orders based on price and time priority. That is, it matches bids and offers of the same prices with time priority. It may be noted that bid and offer of the same entity do not match i.e. only inter-entity orders are matched by NDS-OM and not intra-entity. The NDS-OM system has separate screen for trading of the Central Government papers, State Government securities (SDLs) and Treasury bills (including Cash Management Bills). In addition, there is a screen for odd lot trading also essentially for facilitating trading by small participants in smaller lots of less than ₹ 5 crore. The minimum amount that can be traded in odd lot is ₹ 10,000 in dated securities, T-Bills and CMBs. The NDS-OM platform is an anonymous platform wherein the participants will not know the counterparty to the trade. Once an order is matched, the deal ticket gets generated automatically and the trade details flow to the CCIL. Due to anonymity offered by the system, the pricing is not influenced by the participants’ size and standing.

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

15. What are the regulations applicable on non-deposit accepting NBFCs with asset size of less than ₹ 500 crore? +

The regulation on non-deposit accepting NBFCs with asset size of less than ₹ 500 crore would be as under:

(i) They shall not be subjected to any regulation either prudential or conduct of business regulations viz., Fair Practices Code (FPC), KYC, etc., if they have not accessed any public funds and do not have a customer interface.

(ii) Those having customer interface will be subjected only to conduct of business regulations including FPC, KYC etc., if they are not accessing public funds.

(iii) Those accepting public funds will be subjected to limited prudential regulations but not conduct of business regulations if they have no customer interface.

(iv) Where both public funds are accepted and customer interface exist, such companies will be subjected both to limited prudential regulations and conduct of business regulations.

Foreign Investment in India

Q.15: Whether cash is a permissible mode of payment for making foreign direct investment in Indian company. +

Answer: No, refer to Para 7.13 of Master Direction-Foreign Investment in India.

FAQs on Non-Banking Financial Companies

Ceiling on deposits

15. Whether an NBFC with entitlement of accepting public deposits as per the revised Regulations and holding deposits much above the level, can still accept fresh deposits ? If so, what are the conditions ? +

All the Rated Companies have been allowed 3 years time to regularise their excess deposits by repayment or otherwise. During this period, while a company can accept fresh deposits and renew such maturing deposits subject to reducing the excess holding of public deposits by one-third at the end of every calendar year beginning December 1998. However in such a case, the company should not exceed the level of public deposits outstanding as at the close of business on January 1, 1998. The unrated and underrated NBFCs are not entitled to accept fresh deposits.

Domestic Deposits

I. Domestic Deposits

15. What are the guidelines for renewal of overdue deposits? +

All aspects concerning renewal of overdue deposits may be decided by individual banks subject to their Board laying down a transparent policy in this regard and the customers being notified of the terms and conditions of renewal including interest rate, at the time of acceptance of deposit. The policy should be non-discretionary and non-discriminatory.

Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999

Eligible entities and requirements to submit the FLA return

Q15. If an entity issues the shares to non-resident on non-repatriable basis, whether that entity is required to submit the FLA return? +

Ans: Shares issued by reporting entities to non-resident on non-repatriable basis should not be considered as foreign investment; therefore, entities which have issued the shares to non-resident only on non-repatriable basis, is not required to submit the FLA return.

External Commercial Borrowings (ECB) and Trade Credits

F. LEVERAGE CRITERIA AND BORROWING LIMIT

15. Should the proposed ECB be added to all outstanding ECBs for the purpose of ECB liability to equity ratio? +

Yes, apart from ECB raised for refinancing where the proposed ECB amount may not be taken into account to avoid double counting.

Core Investment Companies

Core Investment Companies (CICs)

15. Whether NBFCs already registered with the Bank as category “B” company whose asset size is below Rs. 100 crore, but fulfilling the CIC criteria, can seek voluntary deregistration (as such companies are not otherwise required to get registered with the Bank under the new norms)? If so, which source should be relied upon viz certificate from Statutory auditor or audited balance sheet for one year or more? +

Ans: Yes, CICs presently registered with the Bank but fulfilling the criteria for exemption under Notification No 220 dated January 05, 2010 can seek voluntary deregistration. Both audited balance sheet and auditors certificate are required to be submitted for the purpose.

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

FASTag issued by Paytm Payments Bank

15. I have a FASTag issued by Paytm Payments Bank. Can I continue to use it to pay toll after March 15, 2024? +

Yes. You can continue to use your FASTag to pay toll upto the available balance. However, no further funding or top ups will be allowed in the FASTags issued by Paytm Payments Bank after March 15, 2024. It is suggested that you procure a new FASTag issued by another bank before March 15, 2024 to avoid any inconvenience

Biennial survey on Foreign Collaboration in Indian Industry (FCS)

Some important definitions and concepts

Q15. What is Pure Technical Collaboration? +

Ans.: An Indian company is said have Pure Technical Collaboration if the company has only foreign technical collaboration and have not received any foreign direct investment.

Retail Direct Scheme

Know Your Customer (KYC) related queries

15. Who should do video KYC? +

In case your data does not exist in the CKYC database, you will have to opt for the video KYC method.

Housing Loans

15. Do you get a tax benefit on the loan? +

Yes. Resident Indians are eligible for certain tax benefits on both principal and interest components of a loan under the Income Tax Act, 1961. Under the current laws, you are entitled to an income tax rebate for interest repayment up to Rs. 1,50,000 /- per annum. Moreover, you can get added tax benefits under Section 80 C on repayment of principal amount up to Rs. 1,00,000 /- per annum.

Targeted Long Term Repo Operations (TLTROs)

FAQs pertaining to On Tap TLTRO/ reversal of TLTRO/ TLTRO 2.0 transactions

Q15: If a bank opts for repayment of funds availed under TLTRO/ TLTRO 2.0, whether the investments made by the bank by utilizing these funds will continue to be allowed for classification under held to maturity (HTM) even in excess of 25 percent of total investment permitted to be included in the HTM portfolio? +

Ans: Banks can submit their request for exercising the repayment option till October 28, 2020. On repayment of funds availed under TLTRO/ TLTRO 2.0, the associated securities shall be shifted out of the HTM category. The shifting of the TLTRO/ TLTRO 2.0 investments out of HTM shall be in addition to the shifting of investments permitted at the beginning of the accounting year and subject to adherence to the guidelines contained in the Master Circular – Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks dated July 1, 2015. These investments under TLTRO/ TLTRO 2.0 against which funds are being repaid will not be exempted from reckoning under the large exposure framework (LEF) and computation of adjusted non-food bank credit (ANBC) for the purpose of determining priority sector targets/sub-targets.

Indian Currency

B) Banknotes

7. Is it possible to have two or more banknotes with the same serial number? +

Yes, it is possible to have two or more banknotes with the same serial number, but they would either have a different Inset Letter or year of printing or signature of a different Governor of RBI. An Inset Letter is an alphabet printed on the Number Panel of the banknote. There can be notes without any inset letter also.