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FAQs on Master Direction - Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021 (MD-TLE)

Q3: Clause 77 of the MD-TLE stipulates the valuation of investment by a transferor in SRs backed by stressed loans transferred by it. Whether this treatment will be applicable for the entire investments holding or only for SR investments that are made subsequent to the release of the MD-TLE on September 24, 2021?

Ans: It is clarified that treatment advised in the relevant clause (revised clause 77A) for investment by a transferor in SRs backed by stressed loans transferred by it are applicable to all SR investments outstanding as on the date of issuance of the MD. However, lenders other than specified at clause 3(a) & (e) shall be guided by the proviso added to the clause 77A.

3. What are the benefits of using RTGS? +

Ans. RTGS offers many advantages for funds transfer:

It is a safe and secure system for funds transfer.
RTGS transactions / transfers have no amount cap set by RBI.
The system is available on all days on 24x7x365 basis. There is real time transfer of funds to the beneficiary account.
The remitter need not use a physical cheque or a demand draft.
The beneficiary need not visit a bank branch for depositing the paper instruments.
The beneficiary need not be apprehensive about loss / theft of physical instruments or the likelihood of fraudulent encashment thereof.
Remitter can initiate the remittances from his / her home / place of work using internet banking, if his / her bank offers such service.
The transaction charges have been capped by RBI.
The transaction has legal backing.

Q 3. What are the entry point norms for NBFC-Factor ? +

Ans, Every company registered under Section 3 of the Companies Act 1956 seeking registration as NBFC-Factor shall have a minimum Net Owned Fund (NOF) of Rs. 5 crore. Existing companies seeking registration as NBFC-Factor but do not fulfil the NOF criterion of Rs. 5 crore may approach the Bank for time to comply with the requirement.

3. How can the ATS be accessed ? +

A link to ATS has been provided in the RBI website http://www.rbi.org.in.

Q3. Who can sponsor IDF-MFs and IDF-NBFCs? +

Ans : IDF-MFs can be sponsored by banks and NBFCs. Only banks and Infrastructure Finance companies can sponsor IDF-NBFCs.

3. My bank charges me a large sum of money for cheque collection. Is there any remedy? +

Local cheque collection charges are decided by the concerned bank from time to time and communicated to customer through their CCP as part of the Code of Bank’s Commitment to Customers.

Banks cannot charge more than the following for outstation cheques:

Up to and including Rs.5,000 – Rs.25 per instrument + service tax; Above Rs.5,000 and up to and including Rs.10,000 – not exceeding Rs.50 per instrument + service tax; Above Rs.10,000 and up to and including Rs.1,00,000 – not exceeding Rs.100 per instrument + service tax; Above Rs.1,00,000 – left to the banks to decide. No additional charges such as courier charges, out of pocket expenses, etc., should be levied.

It may be noted, no outstation cheque collection charges to be levied if the collecting bank and the paying bank are located within the jurisdiction of the same CTS grid even though they are located in different cities.

3. Whether capital protection will be provided? +

Yes, capital protection will be provided by paying higher of the adjusted principal and face value (FV) at redemption.
If adjusted principal goes below FV due to deflation, the FV would be paid at redemption and thus, capital will get protected.

Q.3. What is the funds availability schedule for the beneficiary? +

Ans The remitting bank transmits the funds transfer message to RBI so as to reach NCC, before the cut off time for the settlement, the receiving bank’s account is credited by RBI at the destination centre and beneficiary gets credit on the same day.

3. What is the maximum deposit amount insured by the DICGC ? +

Each depositor in a bank is insured upto a maximum of ₹ 5,00,000 (Rupees Five Lakhs) for both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank's licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force.

3.Who is an authorized dealer? +

An authorized dealer is normally a bank specifically authorized by the Reserve Bank under Section 10(1) of FEMA,1999, to deal in foreign exchange or foreign securities.