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Coordinated Portfolio Investment Survey – India

Details for survey launch

Q8. What if the reporting entity does not receive the soft copy of the survey schedule by email?

Ans: In case the reporting entity does not receive the soft-form of the survey schedule, they may download the same from RBI website (www.rbi.org.in) under the head ‘Regulatory Reporting’-→ ‘List of Returns’-→ ‘CPIS – Survey Schedule’[ or under the head ‘Forms’ (available under ‘More Links’ at the bottom of the home page) and sub-head ‘Survey’] or send a request to the email: cpis@rbi.org.in. .

FAQs on Master Directions on Priority Sector Lending Guidelines

H. Weaker Sections

Query 24: In case of Partnership Firms/ Pvt. Limited, can the loan granted be tagged as SMF and Weaker Section, if any of the Partner/ Director is holding Agriculture land upto 2 hectares / 5 acres. +

Clarification: As per extant guidelines, SMF includes individuals, SHGs, JLGs, Farmers’ Producer Companies (FPC) and Co-operatives of farmers with the accompanying criteria of membership by number and land-holding. Therefore, loans to partnership firms/ co-borrowers or any director of a Company holding Agriculture land upto 2 hectares / 5 acres are not eligible to be classified under the Small and Marginal farmers category of PSL

Query 25: In case of a Partnership firm, if majority of the partners belong to one or the other of the specified minority communities, whether advances granted to such partnership firms can be treated as advances granted to minority communities. Further, in case of Private / Public Ltd. Company, if any of the borrowers belong to Minority Community, can the loan be classified under weaker section category ? +

Clarification: As per extant guidelines, priority sector loans are eligible for classification as loans to minority communities as per the list notified by the GoI from time to time. The same may be read with Master Circular- Credit Facilities to Minority Communities which under para 2.2 states “In the case of a partnership firm, if the majority of the partners belong to one or the other of the specified minority communities, advances granted to such partnership firms may be treated as advances granted to minority communities. Further, if the majority beneficial ownership in a partnership firm belongs to the minority community, then such lending can be classified as advances to the specified communities. A company has a separate legal entity and hence advances granted to it cannot be classified as advances to the specified minority communities.”

Query 26: Can banks rely on customer’s declaration for Minority / SC / ST category to be included under Weaker section ? +

Clarification: Our guidelines do not mandate banks to obtain documentary evidence for classifying credit facilities to Minorities and SCs/STs under weaker section. Therefore, declaration by the customer in the application form would suffice. However, it needs to be ensured that for classification under weaker sections, the loans should first be eligible for classification under priority sector lending as per underlying activity.I. Investment by Banks in securitized assets / Transfer of Assets through Direct Assignment/ Outright Purchase

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

Money Transfer Service Scheme (MTSS)

9. Who is an Overseas Principal ? +

The Overseas Principal should be a registered entity, licenced by the Central Bank / Government or financial regulatory authority of the country concerned for carrying on Money Transfer Activities. The country of registration of the Overseas Principal should be AML compliant. The Overseas Principal should obtain necessary authorisation from the Department of Payment and Settlement Systems, Reserve Bank of India under the provisions of the Payment and Settlement Systems Act (PSS Act), 2007 to commence/ operate a payment system.

Biennial survey on Foreign Collaboration in Indian Industry (FCS)

Details of survey launch

Q9. Which entities can participate in the FCS survey? +

Ans.: Companies, who have inward FDI along with foreign technical collaboration (FTC) agreements can participate in this survey.

Retail Direct Scheme

Account opening related queries

9. What documents do I need for opening a Retail Direct Gilt (RDG) account? +

The following documents are mandatory to open the RDG account

PAN
Mobile number
E-mail address
Scanned copy of your signature
Bank account details (by uploading a cancelled cheque or manually entering the details on the portal)
Aadhaar number with mobile number linked to it

In addition, you may be required to provide an address proof to complete your Know Your Customer (KYC) process. The following documents are accepted as an address proof - Passport, Driving License, Voter ID, Aadhaar, NREGA job card duly signed by the State Government, Letter issued by the National Population Register containing your name and address.

Housing Loans

9. What is pre-EMI interest? +

Sometimes loan is disbursed in installments, depending on the stages of completion of the housing project. Pending final disbursement, you may be required to pay interest only on the portion of the loan disbursed. This interest called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of EMI.

However, many banks offer a special facility whereby customers can choose the installments they wish to pay for under construction properties till the time the property is ready for possession. Anything paid over and above the interest by the customer goes towards Principal repayment. The customer benefits by starting EMI payment earlier and hence repays the loan faster. Please check with your banker whether this facility is available before availing of the loan.

Indian Currency

B) Banknotes

1. What is the meaning of "I promise to pay" clause on the banknotes? +

As per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay the value of banknote. This is payable on demand by RBI, being the issuer.

The promissory clause printed on the banknotes i.e., "I promise to pay the bearer the sum of Rupees …” denotes the obligation on the part of the Bank towards the holder of the bank note.

Government Securities Market in India – A Primer

9. Who are the major players in the G-Secs market? +

Major players in the G-Secs market include commercial banks and PDs besides institutional investors like insurance companies. PDs play an important role as market makers in G-Secs market. A market maker provides firm two way quotes in the market i.e. both buy and sell executable quotes for the concerned securities. Other participants include co-operative banks, regional rural banks, mutual funds, provident and pension funds. Foreign Portfolio Investors (FPIs) are allowed to participate in the G-Secs market within the quantitative limits prescribed from time to time. Corporates also buy/ sell the G-Secs to manage their overall portfolio.

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

9. Does the Reserve Bank regulate all financial companies? +

No. Housing Finance Companies, Merchant Banking Companies, Stock Exchanges, Companies engaged in the business of stock-broking/sub-broking, Venture Capital Fund Companies, Nidhi Companies, Insurance companies and Chit Fund Companies are NBFCs but they have been exempted from the requirement of registration under Section 45-IA of the RBI Act, 1934 subject to certain conditions.

Housing Finance Companies are regulated by National Housing Bank, Merchant Banker/Venture Capital Fund Company/stock-exchanges/stock brokers/sub-brokers are regulated by Securities and Exchange Board of India, and Insurance companies are regulated by Insurance Regulatory and Development Authority. Similarly, Chit Fund Companies are regulated by the respective State Governments and Nidhi Companies are regulated by Ministry of Corporate Affairs, Government of India. Companies that do financial business but are regulated by other regulators are given specific exemption by the Reserve Bank from its regulatory requirements for avoiding duality of regulation.

It may also be mentioned that Mortgage Guarantee Companies have been notified as Non-Banking Financial Companies under Section 45 I(f)(iii) of the RBI Act, 1934. Core Investment Companies with asset size of less than ₹ 100 crore, and those with asset size of ₹ 100 crore and above but not accessing public funds are exempted from registration with the RBI.

Foreign Investment in India

Q.9: For an FPI investment, once the investment is classified as FDI (basis total holding), if the FDI holding comes back to <10%, will the holdings be classified as FPI again ? +

Answer: Once an FDI always an FDI.

Domestic Deposits

I. Domestic Deposits

9. How and when banks are required to pay interest on the deposits maturing on holiday/ non-business working day/ Sunday? +

Banks should pay interest at the originally contracted rate on the deposit amount for the holiday/ Sunday/ non-business working day intervening between the date of expiry of the specified term of the deposit and the date of payment of the proceeds of the deposits on the succeeding working day.

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

Eligible entities and requirements to submit the FLA return

Q9. If an entity did not receive FDI or made overseas investment in any of the previous year(s) including the current year, do we need to submit the FLA return? +

Ans: If the Indian entity does not have any outstanding investment in respect of inward and outward FDI as on end-March of reporting year, they need not submit the FLA return.

External Commercial Borrowings (ECB) and Trade Credits

D. RECOGNISED LENDERS/ INVESTORS

9. Can Indian banks participate in the process of issuance of Rupee denominated bonds overseas in any other manner? +

Indian banks cannot subscribe to RDBs issued overseas in primary market but can be arrangers/ underwriters/ market makers/ traders subject to compliance with prudential norms.

Core Investment Companies

Core Investment Companies (CICs)

9. What items are included in the 10% of Net assets which CIC’s/CIC’s-ND-SI can hold outside the group? +

Ans: These would include real estate or other fixed assets which are required for effective functioning of a company, but should not include other financial investments/loans in non group companies.

FAQs on Non-Banking Financial Companies

Definition of public deposits

9. The deposits from a foreign citizen are not to be treated as public deposit. What is the status of the deposits from an NRI ? +

An NRI can be an Indian national or a foreign national of Indian origin. If the depositor is an NRI holding a foreign passport, he is to be treated as foreign national despite the fact he is of Indian origin. It is for the depositor to disclose to the company that he is a foreign citizen and for the company to keep on its record an evidence that it had received deposit from a foreign citizen to claim the exemption from the Non-Banking Financial Companies (Reserve Bank) Directions, 1998 on Acceptance of Public Deposits.

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

Bank Accounts with Paytm Payments Bank

9. The instalment (EMI) for my loan is automatically paid through my account with Paytm Payments Bank. Can this continue? +

Auto debit mandates will continue to get executed till there is balance available in your account. However, after March 15, 2024, credit or deposit in your accounts will not be allowed. Therefore, to avoid inconvenience, it is suggested that you make alternative arrangements for setting up EMI payments through another bank before March 15, 2024.

Targeted Long Term Repo Operations (TLTROs)

Q9: Whether sale from HTM on account of buy-back by the issuers in respect of specified securities acquired under TLTRO scheme will be reckoned for computation of the regulatory limit applicable for disclosure? +

Ans: Sale from HTM on account of buy-back by the issuers pertaining to specified securities acquired under TLTRO scheme is exempt from the disclosure threshold stipulated in para 2 of RBI Master Circular DBR.No.BP.BC.6/21.04.141/2015-16 dated July 1, 2015.

Coordinated Portfolio Investment Survey – India

Important points to remember while participating in CPIS

Q9. What are the points the reporting entities should remember while filling the survey schedule?

Ans: The reporting entities should follow the below-mentioned points for filling and submitting the survey schedule:

i. The company must use the latest survey schedule, which is in .xls format, without incorporating any macros.

ii. The company is required to save the survey schedule in Excel 97-2003 workbook, i.e., in .xls format by following the below-mentioned steps:

Go to Office Button / File → Save As → Save As type
Select “Excel 97-2003 Workbook” and Save the survey schedule in .xls format.

iii. The company is requested not to incorporate any macro in the survey schedule while submitting the same.

iv. Survey schedule submitted in any other format (other than .xls format) will be rejected by the system.

v. Ensure that all information furnished in the survey schedule are complete and no information is missed out.

vi. After filling required details, the responding entities have to fill the declaration present in the survey schedule, which helps in validating that the information entered by the entity are reconfirmed before submission to RBI. This helps to avoid data entry errors, missed data and other errors.