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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.

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.

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.

Indian Currency

B) Banknotes

6. What is currency paper made up of?

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

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.

Core Investment Companies

B. Registration and related matters:

13. A CIC should have 90% investment within the group, and in terms of current exposure norms, NBFCs in Middle Layer and Upper layer are permitted to have exposures (both credit/ investments) only to the extent of 40% of Tier -I capital and 25% of available eligible capital, respectively, within any group. Therefore, no NBFC (ML/ UL) as it stands, would be able to become a CIC without breaching the NOF, CRAR or Concentration Norms, since its entire business is in a subsidiary. However, an NBFC may voluntarily seek to become a CIC since it brings clarity to the holding structure in their organization. How would this issue be resolved? Could NBFCs be provided exemption from Capital adequacy/exposure norms during the transition period, just as unregistered CICs are given 6 months’ time.

Ans: The NBFC would have to apply to RBI with full details of the plan and exemptions could be considered on a selective basis on the merits of the case.

Portfolio Investment Positions (PIP) by Counterpart Economy (formerly CPIS) – India

What to report under PIP?

Q13. What is the unit of reporting the data in PIP?

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

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.

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

13. NBFCs are charging high interest rates from their borrowers. Is there any ceiling on interest rate charged by the NBFCs to their borrowers?

Reserve Bank of India has deregulated interest rates to be charged to borrowers by NBFCs. The rate of interest to be charged by the company is governed by the terms and conditions of the loan agreement entered into between the borrower and the NBFCs. However, the NBFCs have to be transparent and the rate of interest and manner of arriving at the rate of interest to different categories of borrowers should be disclosed to the borrower or customer in the application form and communicated explicitly in the sanction letter and on their websites, Key Facts Statement, etc., to enable the borrower to take an informed decision.

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.

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.

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.

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.

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.

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

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.

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.

Indian Currency

B) Banknotes

7. 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.

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.