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FAQs on Resolution Framework for Covid-19 related stress (Revised on December 12, 2020) (Updated as on August 19, 2022)

8. Are the various additional provisions prescribed in the Resolution Framework applicable to NBFCs who are following IndAS? +

NBFCs which are required to comply with Indian Accounting Standards (IndAS) shall, as hitherto, continue to be guided by the guidelines duly approved by their Boards and as per ICAI Advisories for recognition of significant increase in credit risk and computation of Expected Credit Losses. However, the various additional provisions mentioned in the circular dated August 6, 2020 would constitute the prudential floors for the purpose of Paragraph 2 of the Annex to the circular DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 on Implementation of Indian Accounting Standards.

8. کیا 'بنیادی بچت بینک جمع کھاتہ' بینکوں کے فائنینشئیل اِنکلوژن پلانس کا کوئی حصہ ہے؟

'بنیادی بچت بینک جمع کھاتہ' متعارف کرانے کا نصب العین بے شک آر بی آئی کاوشوں اور کوششوں کا ایک حصہ ہے تاکہ فائنینشئیل اِنکلوژن کے مقاصد کو زیادہ سے زیادہ بڑھاوا ملے۔ پہلے 'نو فرل' کی حیثیت سے کھولے گئے تمام کھاتوں کے نام ملاحظہ فرمائیں : DBOD.No.Leg.BC.44/09.07.005/2005-06 بتاریخ 11/نومبر 2005، ہمارے سرکیولر ڈی بی او ڈی نمبر : DBOD. No. Leg. BC. 35/09.07.005/2012-13 بتاریخ 10/اگست 2012 کے پیراگراف 2 میں موجود ہدایات کے مطابق تبدیل کرکے بی ایس بی ڈی اے ہونا چاہئے۔ ہمارا سرکیولر ڈی بی او ڈی نمبر : Leg.BC.35 بتاریخ 10/اگست 2012 جاری ہونے کے بعد کھولے گئے تمام کھاتوں کا فائنینشئیل اِنکلوژن پلانس جو بینکوں کے ذریعے آر پی سی ڈی کو دی گئی ہے، کی ماہانہ رپورٹ کے تحت رپورٹ ہونی چاہئے۔

8. Query Is the 'Basic Savings Bank Deposit Account' a part of the Financial Inclusion plans of banks? +

Response

The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for furthering Financial Inclusion objectives. All the accounts opened earlier as 'no-frills' account vide RPCD Circular dated RPCD.RF.BC.54/07.38.01/2005-06 dated December 13, 2005 and RPCD.CO.No.RRB.BC.58/03.05.33(F)/2005-06 dated December 27, 2005 should be renamed as BSBDA as per the instructions contained in paragraph 2 of our Circular RPCD.CO.RRB.RCB.BC.No.24/07.38.01/2012-13 dated August 22, 2012 and all the new accounts opened since the issue of our circular RPCD.CO.RRB.RCB.BC.No.24 dated August 22, 2012 should be reported under the monthly report of the progress of Financial Inclusion plans submitted by banks to RPCD, CO.

8. In reference to Para 10(g) and 10(h) of the MD, what are the transactions that are eligible (i) to be adjusted towards the outstanding dues and (ii) credited to the bank account of the cardholder?

Response: For a typical credit card with billing cycle from October 1, 2023 to October 30, 2023, let’s assume the bill is generated on October 30, 2023 and the due date of payment is November 19, 2023. The different scenarios for adjustment of credit are detailed below:

Scenario 1 – Credit of refund/failed/reversed transaction within the same billing cycle
Purchase transaction date – October 15, 2023 Refund on October 19, 2023 - For cancellation of purchase dated October 15, 2023	As bill is yet to be generated in the given case, the refund amount received on October 19, 2023, shall be adjusted with other debits, prior to calculation of the Total Amount Due.
Scenario 2 – Credit of refund/failed/reversed transaction post generation of bill but before making payment of the dues
Purchase transaction date - October 29, 2023 Refund on November 04, 2023 - For cancellation of purchase dated October 29, 2023	The bill is generated on October 30, 2023, however, the payment towards the dues has not been made till the date of refund. Therefore, the refund amount received on November 04, 2023, shall be adjusted towards the Total Amount Due (TAD) and accordingly the cardholder will be required to pay only the remaining outstanding (Remaining outstanding = TAD – Refund amount).
Scenario 3 – Credit of refund/failed/reversed transaction for which payment has already been made
Purchase transaction date - October 30, 2023 Payment towards dues – November 06, 2023 Refund on November 07, 2023 - For cancellation of purchase dated October 30, 2023	As the cardholder has already cleared the dues, card-issuers shall seek explicit consent of the cardholder to adjust the refund amount in line with the provision stipulated at Para 10(h) of the MD. Case I - If the cardholder gives explicit consent, then refund amount shall be adjusted. Case II - If the cardholder does not provide the consent or no response is received for adjustment of the refund, then the refund amount will be credited to the bank account of the cardholder in line with para 10(h). Further, if the cardholder makes a request for crediting the refund (transaction for which payment has already been made), the same shall be credited back to the bank account of the cardholder irrespective of the cut off defined under Para10(h).

Note: The card-issuers may put in place a suitable mechanism to prevent evergreening of the credit facility.

8. Who can perform tokenisation and de-tokenisation? +

Ans. Tokenisation and de-tokenisation can be performed by the authorised card network or by the card issuer. The list of card networks authorised by RBI to operate in India is available on the RBI website at the link /en/web/rbi/-/publications/certificates-of-authorisation-issued-by-the-reserve-bank-of-india-under-the-payment-and-settlement-systems-act-2007-for-setting-up-and-operating-payment-system-in-india-12043.

8. Who are eligible to invest in Government securities? +

The G S Act and the G S Regulations do not specify the eligibility criteria for investment in a G-Sec. The eligibility criteria are specified in the respective Government Notifications. Usually any person is eligible to invest in Government securities.

Q.8. Is it compulsory for a public listed company to be a Promoter / Promoter Group of the NOFHC? Does it mean that such promoter group companies should be listed companies where public holds at least 51per cent of the voting shares? +

A.(8 to 13) The requirement is that the companies in the Promoter Group in which the public hold not less than 51 per cent of the voting equity shares shall hold not less than 51 per cent of the total voting equity shares of the NOFHC.[ para 2 (C) (ii) (b) of the guidelines]

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.

8. What are the Know-Your-Customer (KYC) norms? +

Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to the investor(s).

Q 8. Are there any restrictions on the frequency of the remittance? +

Ans. There are no restrictions on the frequency of remittances under LRS. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during a financial year should be within the cumulative limit of USD 2,50,000.

Once a remittance is made for an amount up to USD 2,50,000 during the financial year, a resident individual would not be eligible to make any further remittances under this scheme, even if the proceeds of the investments have been brought back into the country.

8. What are Card Present (CP) and Card Not Present (CNP) transactions? +

Ans: A CP transaction is a transaction that is carried out through physical presence of card at the point of transaction. It is also known as face-to-face or a proximity payment transaction. An example is a transaction carried out at an ATM or a PoS terminal. A CNP transaction does not require the card to be physically presented at the point of transaction. It is also called as a remote transaction. An example is an online transaction or a mobile banking transaction using the card.