An investor in Government securities, held in the form of SC, BLA and SGL/CSGL, can avail of the facility of automatic redemption, i.e., the maturity proceeds along with the interest accruing thereon will be credited to the investor's bank account on due date and the investor need not submit physical discharge in respect of such securities provided the investor has furnished his/her bank account details to the RBI or its agent (A model format is given at the end of these FAQs). However, in case, the investor does not submit his/her bank details to the RBI or the Agency Bank, he/she would be required to submit physical discharge towards the Government securities to receive the redemption proceeds.

All regulated financial services entities of the Promoters/Promoter Group in which the Promoters/Promoter Group has ‘significant influence’ or ‘control’ (as defined in Accounting Standard 23) have to be held by a NOFHC. Regarding financial groups setting up banks, the existing NBFC must transfer all regulated financial services business to a new company and shares in that new company must be held by the NOFHC. Conversion of the NBFC into a non operating holding company would enable meeting the requirement of para 2(C)(iii) of the guidelines provided the listed non operating holding company meets the requirement of para(C)(ii)(b) of the guidelines i.e. the public hold not less than 51 percent voting equity shares in the company.

Yes, part holdings can be redeemed in multiples of one gm.

The Scheme is available at the following link https://rbi.org.in/documents/87730/39016390/RBIOS2021_amendments05082022.pdf.

Ans. Inoperative Account is a savings/ current account wherein no ‘customer induced transactions’ has taken place for a period of over two years. For activation of inoperative accounts, the customer can update his/ her KYC information/ data at home/ non-home branch of the RE, and also through V-CIP, subject to the facility of V-CIP being provided by the bank. The banks shall activate the inoperative accounts, only after adhering to the KYC guidelines provided in the Master Direction on KYC.

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¹ Inoperative Account is defined in the circular DOR.SOG (LEG).REC/64/09.08.024/2023-24 dated January 1, 2024 on Inoperative Accounts /Unclaimed Deposits in Banks- Revised Instructions

 

Ans. No, splitting of credit is not permitted when funds are loaded in PPIs. Since the amount of transaction is more than ₹ 50,000/-, the entire amount has to be credited to bank account.

The investing firm will have to be the member of the respective all-India professional organisation / body and the investment amount should not exceed US$ 1 million. or its equivalent in one financial year.

Remittance cannot be made directly or indirectly to Bhutan, Nepal, Mauritius or Pakistan. The facility is also not available for making remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as ‘non-co-operative Countries or Territories' viz., Cook Islands, Egypt, Guatemala, Indonesia, Myanmar, Nauru, Nigeria, Phillippines and Ukraine. Further, remittance under the facility cannot be made to individuals and entities identified as posing significant risk or committing acts of terrorism as advised to banks by RBI from time to time.

As regards DICGC Guarantee fee, the banks have discretion to absorb or to pass on the guarantee fee to the borrower in case of advances over Rs.25,000/- excluding advances to weaker sections. Banks should bear DICGC guarantee fees in respect of advances upto Rs.25,000/- and all advances to weaker sections.

Yes.  In case the maturity proceeds of a Government security exceeds Rupees One lakh,  the investor(s) should furnish the PAN details in advance so as to avail the facility of automatic redemption and receive the maturity proceeds along with the accruing interest thereon in his/her account on due date.

A dedicated e-mail has been created by the Reserve Bank of India to receive queries from members of public on Sovereign Gold Bonds. Investors can mail their queries to this email id.

All regulated financial services entities of the Promoters/Promoter Group in which the Promoters/Promoter Group has ‘significant influence’ or ‘control’ (as defined in Accounting Standard 23) have to be held by a NOFHC. Regarding financial groups setting up banks, the existing NBFC must transfer all regulated financial services business to a new company and shares in that new company must be held by the NOFHC. Conversion of the NBFC into a non operating holding company would enable meeting the requirement of para 2(C)(iii) of the guidelines provided the listed non operating holding company meets the requirement of para(C)(ii)(b) of the guidelines i.e. the public hold not less than 51 percent voting equity shares in the company.

Yes. Complainants can log on to RBI’s CMS portal (https://cms.rbi.org.in) and can share their feedback under the tab “Feedback”. This feedback is analyzed at RBI for further improving the grievance redress under RB-IOS, 2021.

Ans: To ease the process of activating the ‘Inoperative Accounts’, a bank shall make available the facility of updation of KYC at all branches of the bank, through Video-Customer Identification Process (V-CIP) if requested by a account holder, subject to the facility of V-CIP being provided by the bank.

Ans. All wallet transactions involving debit to the wallet, including cash withdrawal transactions, are permitted only by validation through a 2FA. The AFA requirements for PPI Cards (physical or virtual) shall be same as required for debit cards. 2FA / AFA is not mandatory for PPIs issued under PPI-MTS and Gift PPIs.

A partnership firm which fulfills the conditions stipulated under the automatic route may make the investment without prior approval and submit a report containing the following details through an authorised dealer with in 30 days of making such investments –Name and full address and registration of partnership.Full details of investment abroad.Date and amount of remittance/amount of capitalisation of fees/other entitlements due.Name and address of the foreign concern together with its line of activities.Identification number (if already allotted by the Reserve Bank)

The individual will have to designate a branch of an AD through which all the remittances under the Scheme will be made. He has to furnish an application-cum-declaration in the specified format regarding the purpose of the remittance and declare that the funds belong to him and will not be used for purposes prohibited or regulated under the Scheme.

Banks have freedom to charge interest rate beyond the declared 'spread' on advances granted to NBFCs for onlending for consumer credit.

RBI may call for information from any agent or SGL/CSGL account holder and cause an inspection or scrutiny to be made of any agent or SGL/CSGL account holder. Further, RBI may issue directions to the SGL/CSGL account holders, agents and to any other person dealing with the Government securities.

A. Under all circumstances at least 51 per cent of the voting equity shares of the NOFHC shall be held by companies in the Promoter Group, in which public shareholding is not less than 51 percent.[para 2 (C) (ii) (b) of the guidelines]

The online portal (https://cms.rbi.org.in) enables filing of complaint in two languages i.e. Hindi and English. However, facts/description of the complaint can be typed, copied and pasted in description box, in any language for upto 2,000 characters. However, the physical and email complaints can be filed in any language.

Ans. All PPIs shall have a minimum validity period of one year from the date of last loading / reloading in the PPI. PPI issuers are, however, free to issue PPIs with a longer validity. Issuers shall clearly indicate the expiry period of the PPI to the customer at the time of issuance of PPIs.

Partnership firms, which are not eligible under the Automatic Route, are required to make an application in form ODI to the Reserve Bank for necessary approval.

The investor is free to book profit or loss abroad and to invest abroad again. He is under no obligation to repatriate the funds sent abroad.

With effect from April 1, 2002 the interest rates on loans and advances should be charged with monthly rests except in the case of agricultural advances( including short term loans and other allied activities) where the existing practice would continue. However the banks should compound the interest at monthly intervals only from April 1, 2003.

If any person, for the purpose of obtaining for himself or any other person any title to a Government security, makes false statement then he shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both. Further, RBI may impose on any person who contravenes any provision of the G S Act, or contravenes any regulation, notification or direction issued under the G S Act, or violates the terms and conditions for opening and maintenance of SGL/CSGL account a penalty not exceeding five lakh rupees and where such contravention is a continuing one, further penalty, which may extend to five thousand rupees for every day after first day during which the contravention continues.

FAQs in respect of Relief/Savings Bonds

As mentioned above, Relief/Savings Bonds are Government securities and they are issued in the form of Stock and BLA by RBI and in the form of BLA by the Agency banks. The provisions of the G S Act and the G S Regulations also apply to them. For the convenience of the Relief/Savings Bonds holders, certain specific aspects have been elaborated here.

A. Non-voting equity shares are not a part of the guidelines, but are subject to relevant laws/ SEBI guidelines. Non-voting capital will not be reckoned for the purpose of calculation of promoter shareholding in the NOFHC/ bank.

Macro level: RBI Spreads awareness on RB-IOS, 2021 and related matters through various means including:

1. Awareness campaigns hosted with the tag line “RBI Kehta Hai” and placed on the RBI website at /en/web/rbi/rbi-kehta-hai.

2. Awareness related messages placed on RBI website as well as the CMS portal. This covers cyber-crime awareness including frauds using mobile apps/ UPI/ QR codes etc.

3. Awareness messages on illegal collection of deposits by unauthorized entities are hosted on Sachet portal at https://rbi.org.in/en/web/rbi/rbi-kehta-hai/sachet-portal.

4. Messages broadcasted in various multimedia channels including during prime time.

5. RBI has released two booklets, viz., BE(A)WARE on the common modus operandi used by fraudsters and precautions to be taken while carrying out various financial transactions, and ‘Raju and the Forty Thieves’ covering forty stories providing glimpses of various fraudulent means employed by fraudsters, and provides simple tips about Do’s and Don’ts as safeguards against such incidents.

6. All banks also repeatedly send SMS/ email to their customers detailing the modus operandi of different types of frauds and the due diligence required at the customer’s end to safeguard oneself from such frauds.

7. List of Do’s and Don’t is published on the RBI website as tickers.

Apart from the above, various outreaches including by Regional Offices of RBI, Centres for Financial Literacy (CFLs) and Financial Literacy Centres (FLCs), specific awareness programmes, town hall events and display of information/ messages at various public places are being regularly held through RBI Ombudsman Offices. ‘Ombudsman Speak’ too is held in the months of March and repeated in October, every year.

Ans. A PPI with no financial transaction for a consecutive period of one year shall be made / treated inactive after sending a notice to the PPI holder. It can be reactivated only after validation and applicable due diligence.

It will be in order for individual partners to hold shares for and on behalf of the firm in overseas JV/WOS provided the entire funding for the investment is done by the firm and if the host country regulations or operational requirements warrant such holding.

Once a remittance is made for an amount upto USD 25,000 during the calendar year, he would not be eligible to make any further remittances under this route, even if the proceeds of the investments have been brought back into the country.

The interest rate directives on bank advances will not be applicable to loans or advances or other financial accommodation made or provided or renewed by a scheduled bank, inter alia, to its own employees. Where the advances are provided by the bank to co-operative credit societies formed by the bank’s staff members for lending to constituents ( i.e. Staff of the bank ) the interest rate directives of the RBI will not apply to such advances.

Yes.  As Relief/Savings Bonds are Government securities, nomination facility is available for these as explained at Question Nos. 17, 18, 19, 20, 21 & 22 above.

The entities/individuals belonging to the Promoters/Promoter Group, which would participate in the voting equity shares of the NOFHC, would have to provide theMemorandum and Articles of Association, financial statements for past ten years and IT returns for last three years, as appropriate, at the time of submission of their application. The last available financial statements in respect of other Group entities, which do not participate in the voting equity shares of the NOFHC will also have to be furnished. The details of the Promoters’ direct and indirect interest in various entities/companies/industries and details of credit/other facilities availed by the Promoters/Promoter Group would be required of all entities. [ para 3 of Annex II to the guidelines]

Considering that a large number of customer complaints emanate on account of unsuccessful or ‘failed’ transactions, RBI has issued a circular dated September 20, 2019 on Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems wherein the TAT is prescribed for reversing the funds in case of failed transactions. Further, the circular also prescribes a compensation mechanism if there is a delay on the part of Regulated Entity to reverse the funds. The details of the circular are available at /en/web/rbi/-/notifications/harmonisation-of-turn-around-time-tat-and-customer-compensation-for-failed-transactions-using-authorised-payment-systems-11693.

Ans. The holders of such PPIs shall be permitted to redeem the outstanding balance in the PPI, if for any reason the scheme is being wound-up or is directed by RBI to be discontinued.

The remittances can be in any currency equivalent to USD 25,000 in a calendar year.

No.

Indian parties which have majority share holding in a foreign entity abroad are required to seek specific approval of Reserve Bank of India for setting up of a second generation company in case:the foreign entity has been in operation for a period of less than two years; orthe Indian party has not repatriated the amount of dividends, fees and royalties due to it from the foreign entity; orproceeds of exports to the foreign entity have not been realised in accordance with the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000; oradditional capital contribution is required from India.

The entities/individuals belonging to the Promoters/Promoter Group, which would participate in the voting equity shares of the NOFHC, would have to provide theMemorandum and Articles of Association, financial statements for past ten years and IT returns for last three years, as appropriate, at the time of submission of their application. The last available financial statements in respect of other Group entities, which do not participate in the voting equity shares of the NOFHC will also have to be furnished. The details of the Promoters’ direct and indirect interest in various entities/companies/industries and details of credit/other facilities availed by the Promoters/Promoter Group would be required of all entities. [ para 3 of Annex II to the guidelines]

Yes.  The facility of automatic redemption, i.e., the facility to receive maturity proceeds along with interest accruing thereon on due date without the hassle of visiting the RBI/Agency Bank and submitting physical discharge in respect of the maturing Relief/Savings Bonds is available to all the Relief/Savings Bond investors as explained at Question Nos. 36 & 37 above.

Customers must report to the bank immediately after noticing any unauthorized transactions in their accounts. Delay in reporting reduces their chance of getting the money back.

In terms of RBI circular on Limiting Liability of Customers in Unauthorised Electronic Banking Transactions dated July 06, 2017, zero liability of the customer shall arise if:

1. Contributory fraud/ negligence/ deficiency is there on the part of the bank (irrespective of whether or not the transaction is reported by the customer).

2. Third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction.

Limited Liability of a Customer

A customer shall be liable for the loss occurring due to unauthorized transactions in the following cases:

1. In cases where the loss is due to negligence by a customer, such as where he/she has shared the payment credentials, the customer will bear the entire loss until the unauthorized transaction was reported to the bank. Any loss occurring after the reporting of the unauthorized transaction shall be borne by the bank.

2. In cases where the responsibility for the unauthorized electronic banking transaction lies neither with the bank nor with the customer, but lies elsewhere in the system and when there is a delay (of four to seven working days after receiving the communication from the bank) on the part of the customer in notifying the bank of such a transaction, the per transaction liability of the customer shall be limited as given in the circular.

Ans. Refunds in case of failed / returned / rejected / cancelled transactions shall be applied to the respective PPI immediately, to the extent that payment was made initially by debit to the PPI, even if such application of funds results in exceeding the limits prescribed for that type / category of PPI.

The stipulation that investors could invest in equities of overseas listed firms that hold at least 10% in a listed Indian firm which was made in terms of our A.P.(DIR Series) Circular No.66 dated January 13, 2003 continues as an additional facility. Under the current Liberalised Remittance Scheme, no such stipulation has been made.

No.

The shares of a JV/WOS can be pledged as a security for availing fund based or non-fund based facility for the concerned entity or for the JV/WOS from an authorised dealer/ public financial institution in India.

Relief/Savings Bonds provide the investors to opt for cumulative/non-cumulative interest payment. In case of cumulative bonds, the interest is payable along with the principal at the time of redemption. However, in case of non-cumulative bonds, the same is paid at half-yearly intervals. If an investor requires regular income flow then it is suggested that he/she should opt for non-cumulative mode of interest payment. Interest can be paid through interest warrants delivered through registered post or can be credited to the investor's bank account on due date, in case the investor has submitted the bank details as per the ECS Mandate form available in the offices of RBI and the Agency Banks. (A model format is given at the end of these FAQs).

A. The NOFHC has to be wholly owned by a single Promoter/Promoter Group ( as per the definition given in the Annex I to the guidelines) and the pattern of shareholding would be as per the provisions laid down at para 2 ( C ) ( ii ) & ( iii) of the guidelines. Two or more separate Groups cannot combine together to set up a NOFHC.

In terms of Master circular on Customer Service in Banks dated July 1, 2015 , banks are advised to have a board approved policy providing infrastructure facilities by branches by bestowing particular attention to providing adequate space, proper furniture, drinking water facilities, with specific emphasis on pensioners, senior citizens, disabled persons, etc. Further, Banks are advised to include senior citizens preferably in Branch Level Customer Service Committee.

In terms of Statement on Developmental and Regulatory Policies - October 4, 2017- Banking Facility for Senior Citizens and Differently abled Persons dated November 9, 2017 banks are required to put in place appropriate mechanism with the following specific provisions:

1. Dedicated Counters/Preference to Senior Citizens, differently abled persons - Banks are advised to provide a clearly identifiable dedicated counter or a counter which provides priority to senior citizens and people who are differently abled including visually impaired persons.

2. Ease of submitting Life Certificate - banks shall ensure that when a Life Certificate is submitted in any branch, including a non-home branch, of the pension paying bank, the same is updated/ uploaded promptly in CBS by the receiving branch itself, to avoid any delay in credit of pension.

3. Cheque Book Facility - Banks shall not insist on physical presence of any customer including senior citizens and differently abled persons for getting cheque books.

4. Automatic conversion of status of accounts - Banks are advised that a fully KYC compliant account should automatically be converted into a ‘Senior Citizen Account’ based on the date of birth available in bank’s records.

5. Ease of filing Form 15G/H - Banks are advised to provide senior citizens and differently abled persons Form 15G/H once in a year (preferably in April) to enable them to submit the same, where applicable, within the stipulated time.

6. Door Step Banking - banks are advised to make concerted effort to provide basic banking facilities, such as pick up of cash and instruments against receipt, delivery of cash against withdrawal from account, delivery of demand drafts, submission of Know Your Customer (KYC) documents and Life certificate at the premises/ residence of such customers.

The Scheme does not restrict such transactions, provided the transactions are within the limit of USD 25,000 per calendar year and is otherwise in order.