Monetary and Credit Information Review - RBI - Reserve Bank of India
Monetary and Credit Information Review
RBI cautions public on deepfake videos of Top Management The Reserve Bank on November 19, 2024 issued clarification regarding the fake videos of Governor being circulated in social media claiming the launch and support to investment schemes by RBI. These videos attempt to advise people to invest their money in such schemes, through use of technological tools. The Reserve Bank has clarified that its officials are not involved in or support any such activities and these videos are fake. RBI does not give any such financial investment advice. To read more, please click here. Reserve Bank of India and Maldives Monetary Authority -Memorandum of Understanding (MoU) The Reserve Bank of India and the Maldives Monetary Authority (MMA) on November 21, 2024 signed a Memorandum of Understanding (MoU) in Mumbai for establishing a framework to promote the use of local currencies viz., the Indian Rupee (INR) and the Maldivian Rufiyaa (MVR) for cross-border transactions. The MoU was signed by the Governor, Reserve Bank of India, Shri Shaktikanta Das and the Governor, Maldives Monetary Authority, Mr. Ahmed Munawar. The MoU encourages the use of INR and MVR in current account transactions, permissible capital account transactions and any other economic and financial transactions as agreed upon by both countries. This framework would enable exporters and importers to invoice and settle in their respective domestic currencies, which in turn would enable the development of trading in INR-MVR pair in foreign exchange market. Use of local currencies would optimise costs and settlement time for transactions. Use of local currencies in bilateral transactions will eventually contribute to promoting trade between India and Maldives as well as deepen financial integration and strengthen the economic relations between India and Maldives. To read more, please click here. High-Level Policy Conference of Central Banks from the Global South: Building Synergies The Reserve Bank organised a high-level conference of Central Banks from Global South during November 21-22, 2024 in Mumbai. The theme of the conference was “Building Synergies” across the central banking fraternity of the Global South. This is the third international conference as part of several conferences and seminars being organised by the Reserve Bank of India during the year. The Conference was attended by delegates from 18 countries, including Central Bank Governors, Deputy Governors and other central bank officials from the Global South. The focus was on sharing experiences and perspectives on issues of contemporary relevance to foster mutually beneficial partnerships for a more prosperous, stable and sustainable future for the Global South. Directors of the Reserve Bank’s Central Board, Secretaries and senior central government officials, experts from multilateral institutions, Deputy Governors and senior management of the Reserve Bank and other officials, top executives from commercial banks, financial market participants, academicians, economists and eminent personalities also participated in the Conference. In his keynote address, Shri Shaktikanta Das, Governor, RBI highlighted that maintaining overall stability, which includes sustained growth, price stability and financial stability is a daunting challenge for the countries of the Global South amidst global spillovers, external sector imbalances, limited fiscal space, elevated debt levels and continuing financial market volatility. Central banks need to work towards more robust, realistic and nimble policy frameworks that use monetary, prudential, fiscal and structural policies synergistically to achieve better societal outcomes. To read more, please click here. Conference for State Registrars of Cooperative Societies The Reserve Bank on November 14, 2024 organised the Second Conference of State Registrars of Cooperative Societies (RCSs) at New Delhi office. The event was co-chaired by RBI Deputy Governors Shri M. Rajeshwar Rao and Shri Swaminathan J. and attended by senior RBI officials. Shri Rabindra Kumar Agarwal, Additional Secretary, Ministry of Cooperation, Government of India (GoI) and Central Registrar of Co-operative Societies (CRCS) and Shri Pankaj Kumar Bansal, Additional Secretary, Ministry of Cooperation, GoI participated in the Conference along with the Registrars of Cooperative Societies from various States. Shri M. Rajeshwar Rao, Deputy Govenor highlighted Cooperative Banks' crucial role in financial inclusion, especially in rural areas, by serving marginalised communities. He stressed that governance and risk management challenges could hinder effective management and urged stronger collaboration between the RCSs and RBI to enforce governance standards, resolve weak banks and streamline compliance. Shri Swaminathan J, Deputy Governor stressed the importance of coordinated engagement between RBI and Registrars of Co-operative Societies, respecting each other's roles. While financial indicators for UCBs have improved, he noted room for growth in business, asset quality and liquidity. To read more, please click here. Conference of the Directors on the Boards of Private Sector Banks The Reserve Bank on November 18, 2024 organised a Conference in Mumbai of the Directors on the Boards of Private Sector Banks on the theme ‘Transformative Governance through Sound Boards’. This is the second annual conference organised by the Reserve Bank with the Boards of Private Sector Banks as part of a series of engagements with Boards of RBI’s Supervised Entities. The conference included special addresses by the Deputy Governors and technical sessions conducted by senior officials of RBI in the areas of ‘Governance and Assurance Functions’, ‘Cybersecurity and IT Risks’ and ‘Business Risks’. The technical sessions were followed by a panel discussion by Independent Directors of select Private Sector Banks on the topic - ‘Governance through the eyes of Independent Directors’. The Conference concluded with an open house interaction of the participants with the Executive Directors of the Reserve Bank. To read more, please click here. FATF High Risk and Other Monitored Jurisdictions The Reserve Bank on November 7, 2024 informed regarding the Financial Action Task Force (FATF) public document ‘High-Risk Jurisdictions subject to a Call for Action’ – October 2024. FATF, earlier identified the following jurisdictions as having strategic deficiencies in their regimes to counter money laundering, terrorist financing and proliferation financing and had placed the jurisdictions under Increased Monitoring, which had developed action plan with the FATF to deal with them. These jurisdictions were: Bulgaria, Burkina Faso, Cameroon, Croatia, Democratic Republic of the Congo, Haiti, Kenya, Mali, Monaco, Mozambique, Namibia, Nigeria, Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Vietnam, Venezuela and Yemen. As per the October 25, 2024 FATF public statement, Algeria, Angola, Côte d’Ivoire and Lebanon have been added to the list of Jurisdictions under Increased Monitoring while Senegal has been removed from this list based on review by the FATF. To read more, please click here. Domestic Systemically Important Banks (D-SIBs) The Reserve Bank on November 13, 2024 released the 2024 list of Domestic Systemically Important Banks (D-SIBs). SBI, HDFC Bank and ICICI Bank continue to be identified as Domestic Systemically Important Banks (D-SIBs) under the same bucketing structure as in the 2023 list of D-SIBs. The additional Common Equity Tier 1 (CET1) requirement for these D-SIBs will be in addition to the capital conservation buffer. To read more, please click here. Master Direction - Know Your Customer (KYC) Direction, 2016 The Reserve Bank on November 6, 2024 amended the Master Direction - Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 to (a) align the instructions with the recent amendments carried out in the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 vide Gazette Notification dated July 19, 2024, (b) incorporate instructions in terms of the corrigendum dated April 22, 2024 issued by the Government of India to the Order dated February 2, 2021 on the ‘Procedure for implementation of Section 51A of the Unlawful Activities (Prevention) Act, 1967’ and (c) revise certain existing instructions. To read more, please click here. Action against NBFCs The Reserve Bank on November 26, 2024 informed the cancellation of Certificate of Registration (CoR) of two Non-Banking Financial Companies (NBFCs). The RBI, in exercise of powers conferred on it under section 45-IA (6) of the Reserve Bank of India Act, 1934, has therefore cancelled the CoR. To read more, please click here. The Reserve Bank of India on October 17, 2024 in exercise of its powers under Section 45L(1)(b) of the Reserve Bank of India Act, 1934, issued Directions to Navi Finserv Limited, Bengaluru (and three other NBFCs), to cease and desist from sanction and disbursal of loans, effective from close of business of October 21, 2024. Now, having satisfied itself based on company’s submissions and in view of adoption of revamped processes, systems and the company’s commitment to ensure adherence to the Regulatory Guidelines on an ongoing basis, especially for ensuring fairness in the loan pricing, the Reserve Bank on December 2, 2024 has decided to lift the afore-mentioned restrictions placed on Navi Finserv Limited, with immediate effect. To read more, please click here. The Reserve Bank on December 2, 2024, in exercise of the powers conferred under Section 45-IA (6) of the Reserve Bank of India Act, 1934 has cancelled the CoR issued to the Zavron Finance Private Limited. To read more, please click here. Reporting of Foreign Exchange Transactions to Trade Repository The Reserve Bank on November 8, 2024 amended the Master Direction – Risk Management and Inter-Bank Dealings dated July 5, 2016 which requires, inter-alia, Authorised Dealers to report all over-the-counter (OTC) foreign exchange derivative contracts and foreign currency interest rate derivative contracts, undertaken by them directly or through their overseas entities (including overseas branches, IFSC Banking Units, wholly owned subsidiaries and joint ventures of Authorised Dealers), to the Trade Repository (TR) of Clearing Corporation of India Ltd. (CCIL). To ensure completeness of transaction data in TR for all foreign exchange instruments, it has been decided to expand the reporting requirement to include foreign exchange spot (including value cash and value tom) deals in a phased manner. Accordingly, transactions in the following foreign exchange contracts, involving INR or otherwise, (hereinafter referred to as “FX contracts”) shall now be reported to the TR: a) foreign exchange cash; b) foreign exchange tom and c) foreign exchange spot. To read more, please click here. Framework for reclassification of FPI to FDI The Reserve Bank on November 11, 2024, in consultation with the Government of India and SEBI finalised an operational framework for reclassification of Foreign Portfolio Investment made by Foreign Portfolio Investors (FPI) to Foreign Direct Investment (FDI) under Foreign Exchange Management (Non-debt instruments), Rules, 2019 in case of any breach of the investment limit by the FPIs concerned. This would further enhance the ease of doing business in India. Accordingly, the Reserve Bank of India has issued the operational framework for reclassification of such foreign portfolio investments to foreign direct investment vide A.P. (DIR Series) Circular No. 19 dated November 11, 2024. Inoperative Accounts / Unclaimed Deposits in banks The Reserve Bank on December 2, 2024 issued a circular mandating banks to review annually, accounts with no customer transactions for over a year and ensure segregation of scholarship/DBT/EBT accounts to facilitate seamless credit, even if they become inoperative. Banks must implement customer awareness measures, such as campaigns and streamline the process for activating inoperative accounts, including prominently displaying activation guidelines on websites and branches. The circular emphasizes reducing unclaimed deposits and addressing issues like frozen accounts due to KYC non-compliance, urging banks to adopt customer-friendly measures like KYC updation through digital and non-home branch channels. Banks must prioritize the activation of accounts linked to government schemes, ensuring no disruption to DBT/EBT beneficiaries, often from underprivileged groups. Special campaigns should be organised for activation and Aadhaar-related services facilitated at branches. The progress on reducing frozen accounts and activation efforts is to be monitored by the Customer Service Committee of the Board and reported quarterly via the DAKSH portal, starting December 2024. The circular requires a monitorable action plan to be submitted for compliance. To read more, please click here. Supersession of Board of Directors The Reserve Bank, under Section 36AAA and Section 56 of the Banking Regulation Act, 1949 (as applicable to Co-operative Societies), has extended the supersession of the Board of Directors of Abhyudaya Cooperative Bank Ltd., Mumbai, for an additional 12 months starting November 24, 2024, citing public interest and governance concerns. Shri Satya Prakash Pathak will continue as the Administrator, supported by a Committee of Advisors comprising Shri Venkatesh Hegde, Shri Devendra Kumar and Shri Suhas Gokhale. To read more, please click here. Monetary Penalty The Reserve Bank imposed monetary penalty (above ₹1 lakh) during the month of November 2024 on the following entities under various sections of Banking Regulation Act, 1949.
Withdrawal of ₹2000 denomination Banknotes The Reserve Bank on December 2, 2024 released the status of withdrawal of ₹2000 denomination banknotes. As per the data, the total value of ₹2000 banknotes in circulation declined to ₹6839 crore at the close of business on November 29, 2024. Thus, 98.08 percent of the ₹2000 banknotes in circulation as on May 19, 2023 has since been returned. To read more, please click here. Report on Municipal Finances The Reserve Bank on November 13, 2024 released the Report on Municipal Finances. The Report with the theme “Own Sources of Revenue Generation in Municipal Corporations: Opportunities and Challenges” presents an analysis of the budgetary data for 232 municipal corporations (MCs), which covers more than 90 per cent of total MCs in the country. The key highlights of the Report are: i) While the revenue account of the MCs has remained in surplus, their heavy reliance on transfers and grants from the upper tiers of the government continues, ii) The own source revenues are not adequate for meeting the revenue expenditure for most of the corporations, which can affect their functional and financial autonomy, iii) Property tax revenues of MCs would benefit from initiatives such as adoption of Geographic Information System (GIS) mapping, digital payment systems, dynamic valuation systems and better monitoring to plug leakages. To read more, please click here. Award scheme for writing books Under the award scheme for writing books originally in Hindi on Economics/Banking/Financial subjects, the Reserve Bank awards three prizes of ₹1.25 lakh to each working/retired professors at Indian universities. The Reserve Bank on November 21, 2024 specified the last date of submission of nomination under the said scheme as December 16, 2024. For details of the scheme, please click here. RBI Bulletin The Reserve Bank on November 20, 2024 released the November 2024 issue of its monthly Bulletin. The Bulletin includes five speeches, five articles and current statistics. The five articles are: i) State of the Economy ii) A Suite of Approaches for Estimating Equilibrium Exchange Rates for India iii) Dynamic Landscape of Monetary Policy Communication in India iv) Agri-tech Startups and Innovations in Indian Agriculture v) Seasonality in Key Economic Indicators of India To read more, please click here. Half Yearly Report - Foreign Exchange Reserves The Reserve Bank on October 29, 2024 published ‘Half Yearly Report on Management of Foreign Exchange Reserves’. These reports are prepared half yearly with reference to the position as at end-March and end-September each year. The present report (43rd in the series) is with reference to the position as at end-September 2024. To read the full report, please click here. Important data released by the Reserve Bank during the month of November 2024 are as follows: Edited and published by Puneet Pancholy for Reserve Bank of India, Department of Communication, Central Office, Shahid Bhagat Singh Marg, Mumbai - 400 001. MCIR can be also accessed at https://mcir.rbi.org.in. |
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