New FAQ Page 2 - RBI - Reserve Bank of India
FAQs on the circular on Reset of Floating Interest Rate on Equated Monthly Instalments (EMI) based Personal Loans
Ans: Whenever there is a reset of interest rates for an entire class of borrowers in a particular loan category, say home loan, due to increase in the reference benchmark; the RE shall provide the following options to the borrowers:
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Either enhancement in EMI or elongation of number of EMIs, keeping the EMI unchanged or a combination of both options;
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Switch to fixed interest rate for the remaining portion of the loan; and
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To prepay, either in part or in full, at any point during the residual tenor of the loan.
Ans. No. In terms of paragraph 9.1.6 of these Directions, children (including minor) are not eligible for additional interest admissible to deceased member of the bank’s staff.
Ans.: The respondent companies/LLPs/proprietorship firms can submit their responses on or before July 15 of every year.
RB-IOS, 2021 covers all commercial banks, Non-Banking Financial Companies (NBFCs), Payment System Participants, most Primary (Urban) Cooperative Banks, and Credit Information Companies. The REs covered under the RB-IOS, 2021 are listed under Question 11.
Ans: The requirement of ensuring compliance to the Principles of Natural Justice is applicable to all Persons / Entities and its Promoters / Whole-time and Executive Directors classified as fraud by the REs. In other words, this requirement is applicable in all cases of fraud classification which may have civil consequences (i.e. penal measures, caution listing) as observed in the Judgement of the Hon’ble Supreme Court dated March 27, 2023 (Civil Appeal No. 7300 of 2022 in the matter of State Bank of India & Ors. Vs. Rajesh Agarwal & Ors.).
Ans. For a customer, using a WLA is just like using an ATM of any bank.
The material terms and conditions may be defined, if not already done, as per the credit policy of the bank and they may vary from one category of loan to another, and also, from lender to lender based on their own assessment.
In terms of the Master Directions - Reserve Bank of India (Priority Sector Lending – Targets and Classification) Directions, 2025 dated March 24, 2025, all bank loans to MSMEs shall qualify for classification under priority sector lending (PSL). The definition of MSMEs shall be as given in the Master Direction - Lending to MSME Sector FIDD.MSME & NFS.12/06.02.31/2017-18 dated July 24, 2017 as updated from time to time. For PSL classification purposes, banks shall be guided by the classification recorded in the Udyam Registration Certificate (URC)/ Udyam Assist Certificate (UAC).
Further, RBI has, from time to time, issued a number of instructions / guidelines to banks relating to lending to the MSME Sector. The Master Direction FIDD.MSME & NFS.12/06.02.31/2017-18 dated July 24, 2017 incorporates the updated instructions / guidelines on the subject. The instructions issued by RBI, to banks, on various matters are available on our website www.rbi.org.in.
Answer: Some of the foreign currency accounts that can be opened by resident individuals with an Authorised Dealer bank in India, along with their features are given below:
Particulars | Exchange Earners Foreign Currency (EEFC) Account | Resident Foreign Currency (Domestic) [RFC(D)] Account | Resident Foreign Currency (RFC) Account |
Who can open the account | Exchange Earners | Individuals | Individuals |
Joint account |
Jointly with eligible persons; or With resident relative(s) on former or survivor’ basis. Relative as defined under Companies Act, 2013 (viz. members of HUF, spouse, parents, step-parents, son, step-son, daughter-in-law, daughter, son-in-law, brother/sister, step-brother/ step-sister) Relative joint account holder cannot operate the account during the life time of the account holder |
Jointly with any person eligible to open the | Same as EEFC |
Type of Account | Current only | Current only | Current/ savings/ term deposits |
Interest | Non-interest earning | Non-interest earning | De-regulated (As decided by the AD bank) |
Permitted Credits |
1) 100% of foreign exchange received on account of export transactions. 2) advance remittance received by an exporter towards export of goods or services 3) Repayment of loans given to foreign importers 4) Disinvestment proceeds on conversion of ADR/ GDR 5) professional earnings like director’s/ consultancy/ lecture fees, honorarium and similar other earnings received by a professional by rendering services in his individual capacity 6) Interest earned on the funds held in the account 7) Re-credit of unutilised foreign currency earlier withdrawn from the account 8) Payments received in foreign exchange by an Indian startup arising out of sales/ export made by the startup or its overseas subsidiaries |
1) Foreign exchange received as payment/ service/ gift/ honorarium while on visit abroad or from a non-resident who is on a visit to India 2) Unspent amount of foreign exchange acquired from AD for travel abroad 3) Gift from close relative 4) Earning through export of goods/ services, royalty 5) Disinvestment proceed on conversion of shares into ADR/ GDR 6) foreign exchange received as earnings of LIC claims/ maturity/ surrendered value settled in forex from an Indian insurance company |
1) Foreign exchange received by him as superannuation/ other monetary benefits from overseas employer 2) Foreign exchange realised on conversion of the assets referred to in Sec 6(4) of FEMA 3) Gift/ inheritance received from a person referred to in Sec 6(4) of FEMA 4) Foreign exchange acquired before the July 8, 1947 or any income arising on it held outside India with RBI permission 6) Foreign exchange received as earnings of LIC claims/ maturity/ surrendered value settled in forex from an Indian insurance company 7) Balances in NRE/ FCNR (B) accounts on change in residential status |
Permitted Debits |
1) Any permissible current or capital account transaction 2) Cost of goods purchased 3) Customs duty 4) Trade related loans and advances |
Can be used for any permissible current/ capital account transactions. | No restrictions on utilisation in/ outside India. |
Response: The scheme envisages the following types of deposits –
Sr. No. |
Type of Deposit |
Duration |
Minimum Lock-in Period |
Applicable Interest Rate |
Periodicity of Interest Payment |
i. |
Short Term Bank Deposit (STBD) |
1-3 years |
As determined by banks |
As determined by banks |
As determined by banks |
ii. |
Medium Term Government Deposit (MTGD) |
5-7 years |
3 years |
2.25% p.a. |
Simple Interest annually or cumulative interest at time of maturity compounded annually. |
iii. |
Long Term Government Deposit (LTGD) |
12-15 years |
5 years |
2.50% p.a. |
Simple Interest annually or cumulative interest at time of maturity compounded annually. |
It may be noted that consequent to Government of India’s press release ID 2115009 dated March 25, 2025, mobilization of MTGD and LTGD, including renewal of existing deposits, has been discontinued with effect from March 26, 2025.
Page Last Updated on: December 11, 2022