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Indian Currency

D) Soiled, Mutilated and Imperfect Banknotes

2. What is Clean Note Policy?

Reserve Bank of India has been continuously making efforts to make good quality banknotes available to the members of public. To help RBI and the banking system towards this objective, the members of public are requested to ensure the following:

Not to staple the banknotes;
Not to write/put rubber stamp or any other mark on the banknotes;
Not to use banknotes for making garlands/toys, decorating pandals and places of worship or for showering on personalities in social events, etc.

3. Are there any instructions for preventing the use of banknotes for making garlands?

The Reserve Bank of India has issued a press release on March 12, 2008, appealing members of public not to use banknotes for making garlands, decorating pandals and places of worship or for showering on personalities in social events, etc. Press Release issued in this regard is available at the following link:
https://website.rbi.org.in/web/rbi/-/press-releases/respect-your-banknotes-rbi-appeals-to-public-18026.

Foreign Investment in India

Q.32: Whether RBI’s approval is required for transfer of shares from NRI or an OCI to a non-resident other than an NRI or an OCI ? +

Answer: No

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

Some Useful Definitions

Q32. Whether, any assets or liabilities for Indian party (i.e. domestic assets and liabilities) are to be included in the FLA return? +

Ans: Any domestic liabilities or assets (even if it is in foreign currency) should not be reported in the FLA return.

External Commercial Borrowings (ECB) and Trade Credits

H. REFINANCING OF ECB

32. Is refinancing of ECBs raised from foreign equity holders and utilised for working capital/ general corporate purpose/ repayment of Rupee loans permitted? +

Yes. However, the new ECB lenders should also be foreign equity holders as defined in the ECB framework and subject to applicable refinancing guidelines.

FAQs on Non-Banking Financial Companies

Credit Rating

32. When a companys Rating is downgraded, does it have to bring down its level of public deposits immediately or over a period of time? +

If Rating of an NBFC is downgraded, it has to bring down deposits to the level to which it is entitled to as per the new Credit Rating within a period of one year.

Government Securities Market in India – A Primer

32. What are the various websites that give information on G-Secs? +

32.1. RBI financial market watch - /en/web/rbi/financial-markets/other-links/financial-market-watch

This site provides links to information on prices of G-Secs on NDS-OM, money market and other information on G-Secs like outstanding stock etc.

32.2. NDS-OM market watch https://www.ccilindia.com/OMHome.aspx

This site provides real-time information on traded as well as quoted prices of G-Secs, both in Order matching and Reporting segment. In addition, prices of When Issued (WI) (whenever trading takes place) segment are also provided.

32.3. Reported deals on NDS-OM: https://www.ccilindia.com/OMRPTDeals.aspx

This site provides information on prices of G-Secs in OTC market as reported. One can see chronological traded price levels and quantity in various securities.

32.4 FBIL – www.fbil.org.in

Financial Benchmark India Private Ltd (FBIL) was jointly promoted by Fixed Income Money Market & Derivative Association of India (FIMMDA), Foreign Exchange Dealers’ Association of India (FEDAI) and Indian Banks’ ‘Association (IBA). It was incorporated on 9th December 2014 under the Companies Act 2013. It was recognised by Reserve bank of India as an independent Benchmark administrator on 2nd July 2015.

The company is run by a Board of Directors, assisted by an oversight committee. The main object of the company is to act as the administrators of the Indian interest rate and foreign exchange benchmarks and to introduce and implement policies and procedures to handle the benchmarks. It also will make policies for possible cessation of any benchmark and to follow steps for ensuring orderly transition to the new benchmarks. FBIL will review each benchmark to ensure that the benchmarks accurately represent the economic realities of the interest that it intends to measure. It will take up/consider such other benchmarks as may be required from time to time by periodically assessing the emerging needs of the end -users.

32.5 FIMMDA - http://www.fimmda.org/

This site provides a host of information on market practices for all the fixed income securities including G-Secs. Accessing information from this site requires a valid login and password which are provided by FIMMDA to the eligible entities.

Retail Direct Scheme

Investment and Account holdings related queries

32. How can I sell securities through Retail Direct platform? +

You can sell securities by placing an offer (sell) order in the secondary market portal. You must have the security in your account before you can sell that security.

All you wanted to know about NBFCs

C. Residuary Non-Banking Companies (RNBCs)

32. Can RNBC forfeit deposit if deposit instalments are not paid regularly or discontinued? +

No. Residuary Non-Banking Company cannot forfeit any amount deposited by the depositor, or any interest, premium, bonus or other advantage accrued thereon.

Domestic Deposits

III. Advances

32. Whether banks may charge interest below BPLR on loans above Rs.2.00 lakhs +

Yes. At present, loans upto Rs.2 lakhs carry the prescription of not exceeding the Benchmark Prime Lending Rate (BPLR) and on the loans above Rs.2 lakhs, banks are free to determine rate of interest subject to BPLR and spread guidelines. Keeping in view the international practice and to provide operational flexibility to commercial banks in deciding their lending rate, banks may offer loans at below BPLR to exporters or other creditworthy borrowers including public enterprises on the basis of a transparent and objective policy approved by the respective Boards.