Ans. Yes, KYC is mandatorily required to be carried out:

1. at the time of commencement of an account-based relationship, i.e., opening any type of account with the RE; or
2. when a walk-in-customer carries out occasional transaction of an amount equal to or exceeding ₹50,000 (whether conducted as a single transaction or several transactions that appear to be connected); or
3. when a walk-in-customer carries out any international money transfer operations; or
4. when the RE has a doubt about the authenticity or adequacy of the customer identification data it has obtained; or
5. when the RE sells its own products or third party products as an agent; payment of dues of credit cards/ sale and reloading of prepaid/ travel cards and any other product for more than ₹50,000.

Response: Resident Indians [Individuals, HUFs, Proprietorship & Partnership firms, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations, Companies, charitable institutions, Central Government, State Government or any other entity owned by Central Government or State Government].

Ministry of Micro, Small and Medium Enterprises, Government of India has launched the Udyam Assist Platform (UAP) to facilitate formalisation of Informal Micro Enterprises (IMEs) through online generation of Udyam Assist Certificate. Ministry of MSME has defined IMEs as those enterprises, which on the basis of their turnover, are exempted from filing returns under the provisions of the Central Goods and Services Tax Act, 2017.

The UAP is managed by SIDBI wherein registration of enterprises on the platform is done with the assistance of Designated Agencies which are RBI regulated entities (including scheduled commercial banks, non-banking financial companies, etc.). The certificate issued on UAP to IMEs is treated at par with URC for the purpose of availing PSL benefits. IMEs with an Udyam Assist Certificate are treated as micro enterprises for the purpose of PSL classification. (Refer Master Direction FIDD.MSME & NFS.12/06.02.31/2017-18 dated July 24, 2017 and circular  FIDD.MSME & NFS.BC.No.09/06.02.31/2023-24 dated May 09, 2023)

Financial Sector regulators/ authorities in India have established regulatory sandboxes to foster innovation in their respective domains. These include:

• Reserve Bank of India (RBI)
  Link: https://rbi.org.in/web/rbi/-/publications/reports/enabling-framework-for-regulatory-sandbox

• Securities and Exchange Board of India (SEBI)
  Link: https://www.sebi.gov.in/legal/circulars/jun-2021/revised-framework-for-regulatory-sandbox_50521.html

• Insurance Regulatory and Development Authority of India (IRDAI)
  Link: https://irdai.gov.in/document-detail?documentId=6541188

• International Financial Services Centres Authority (IFSCA)
  Link:https://ifsca.gov.in/Viewer?Path=Document%2FLegal%2Ffe-framework_27-04-202227042022122844.pdf&Title=Framework%20for%20FinTech%20 Entity%20in%20the%20International%20Financial%20Services%20Centres%20%28IFSCs%29&Date=27%2F04%2F2022

• It may be noted that Pension Fund Regulatory and Development Authority (PFRDA) currently does not have its own regulatory sandbox.

Ans. Any person who contravenes any provision of the FEMA, 1999 [except section 3(a)] or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act or contravenes any condition subject to which an authorization is issued by the Reserve Bank, can apply for compounding to the Reserve Bank. Applications seeking compounding of contraventions under section 3(a) of FEMA, 1999 may be submitted to the Directorate of Enforcement (DOE).

Ans: e₹ can be held and transacted through e₹ wallets offered by banks and non-banks for person-to-person payments or person-to-merchant transactions. One can start using the e₹ wallet by downloading the e₹ app from the Play Store or the App Store and by following the App instructions. Detailed instructions on using the e₹ wallet can be checked with the banks and non-banks providing the wallet. Payments to merchants can be made by scanning either the CBDC QR code or the UPI QR code available at the respective merchant location.

Cheque Clearing traditionally involves a presentation session and a return session. In the Cheque Truncation System (CTS) of India, during the presentation session, the presenting bank (or its branch) captures the data of the cheques along with their electronic images and sends them, in lieu of the physical cheques, to the clearing house for presentation on the drawee (paying) bank. The clearing house processes the data, arrives at the settlement, and routes the images and requisite data to the drawee banks at the end of presentation session.

In the return session, the drawee bank submits the data of unpaid / dishonoured cheques to the clearing house. The clearing house processes provided data, arrives at the settlement, and routes the return data to the presenting banks at the end of the return session.

The clearing cycle is treated as complete once the presentation clearing and the associated return clearing sessions are successfully completed. Funds are made available to the presenting banks only after completion of the return clearing session.

Under Continuous Clearing, the flow of cheque images and data across banks through the clearing house is continuous and both the presentation and the return session (now called the confirmation session) operate in tandem. This enables faster clearing of cheques and even utilisation of infrastructure and resources throughout the day.

The details of the modalities of continuous clearing are indicated in the circular CO.DPSS.RLPD.No.S536/04-07-001/2025-2026 dated August 13, 2025.