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RTI Disclosures of Common Interest

The Reserve Bank of India receives requests for information under the Right to Information Act, 2005. Some information furnished by the Chief Public Information Officer in response requests, would be of interest to the members of the public. Such information is furnished in this Disclosure Log.

Information pertaining to Commercial Banks

RIA No

Information Sought

Reply given/ Information provided

Date of Reply

1
RIA 406/05-06
DBOD

Guidelines issued by the Reserve Bank of India to prevent fraudulent use of ATMs.

The report on Information Systems Security Guidelines for the Banking and Financial Sector headed by Dr. R. B. Barman dated March 11, 2002, had indicated that to detect and prevent fraudulent use of ATMs, banks have to install video cameras at the site for capturing the images of all the users of the ATM. Copy of the report, which was sent to all the banks, is available on our website http://rbidocs.rbi.org.in/rdocs/publicationReport

March 22, 2006

2
RIA 411/05-06
DBOD

Can any bank, on its own, recover the loan amount by operating the savings account of a living depositor, without the express instructions of the depositor/without the orders of a Recovery Tribunal?

The account holder of NRE savings deposits can withdraw the savings deposit at any time and therefore, banks should not mark any type of lien, direct or indirect, against these deposits.(as regards domestic savings deposits, banks may follow the guidelines issued by IBA/existing practices approved by their Board in this regard).

April 13, 2006

3
RIA 420/05-06
DBOD

The definitions/ criteria for classifying non-performing assets (NPAs) as ‘doubtful’ and ‘loss’ assets as on 1.4.1994, and what are the subsequent amendments in this regard

Definitions/criteria for classifying NPAs as doubtful and loss assets as on April 1, 1994 are furnished in our circular no.DBOD.No.BC.129/21.04.043/92 dated April 27, 1992, and the subsequent modifications to these definitions are incorporated in our Master Circular on 'Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances' issued every year. The latest Master Circular containing the definition/criteria for classifying NPA as 'doubtful/ and 'loss asset' is DBOD.No.BP.BC.15/21.04.048/2006-07 dated July 1, 2006, which is available on our website www.rbi.org.in

April 5, 2006

4
RIA 434/05-06
DBOD

‘Ration Card’ as a document for proof of residence, for the purpose of opening of bank accounts.

As per RBI Circular DBOD.AML.58/14.01.001/ 2005-06 dated November 29, 2004 (copy available on our website at http://rbi.org.in/scripts/NotificationUser.aspx ration card is a valid document in support of residential address

March 21, 2006

5
RIA 477/05-06
DBOD

Guidelines issued by RBI to declare an a/c non-performing.

These instructions are given in the Master Circular DBOD.BP.BC. 12 / 21.04.048 / 2005-06 dated July 2, 2005, which is available on our website www.rbi.org.in under 'Notification' and the path is http://rbidocs.rbi.org.in/rdocs/notification/PDFs/78400.pdf

April 26, 2007

6
RIA 483/05-06
DBOD

Circulars / Guidelines issued regarding issue of cheque books

Two circulars were issued. DBOD.108/09.07.007/97-98 dated September 25, 1997 and DBOD .LEG .BC . 74/ 09.07.005 / 03-04 dated April 10, 2004. Also refer to our Circular DBOD.No.Leg.BC.87/c.466(IV)-89 dated March 3, 1989 wherein banks have been advised that they may issue cheque books with larger number of leaves(20-25) if a customer demands the same and also ensure that adequate stocks of such cheque books are maintained with all the branches to meet the requirements of the customers. The circular is available on our website

May 10, 2006

7
RIA 614/05-06
DBOD

What are the instructions /guidelines for nomination and settlement of claims of deceased depositors/locker hirers?.

Reserve Bank of India has issued Circular no DBOD.Leg.BC.95 dated June 9, 2005 in this matter and is available on our website at http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=2284&Mode=0 Banking Companies Nomination Rules, 1985 have been framed in terms of Sections 45ZA to 45ZF of the Banking Regulation Act, 1949.

May 19, 2006

8
RIA 693/05-06
DBOD

RBI rules /guidelines on Credit Cards

RBI has issued circular DBOD.FSD.BC.17/24.01.011/2007-08 dated July 2, 2007 which is available on our website at http://rbi.org.in/ Notification

June 9, 2006

9
RIA 10/06-07
DBOD

Guidelines / Rules regarding premature withdrawal of term deposits.

A bank, on request from the depositor, should allow withdrawal of a term deposit before completion of the period of the deposit agreed upon at the time of making the deposit. The bank will have the freedom to determine its own penal interest rate of premature withdrawal of term deposits. The bank should ensure that the depositors are made aware of the applicable penal rate along with the deposit rate. While prematurely closing a deposit, interest on the deposit for the period that it has remained with the bank will be paid at the rate applicable to the period for which the deposit remained with the bank and not at the contracted rate. No interest is payable, where premature withdrawal of deposits takes place before completion of the minimum period prescribed. However, the bank, at its discretion, may disallow premature withdrawal of large deposits held by entities other than individuals and Hindu Undivided Families. The bank should, however, notify such depositors of its policy of disallowing premature withdrawal in advance, i.e., at the time of accepting such deposits.

(ii) In the case of premature withdrawal of NRE term deposits for conversion into Resident Foreign Currency (RFC) Account, the bank should not levy any penalty for premature withdrawal. If such a deposit has not run for a minimum period of 1 year, the bank may, at its discretion, pay interest at a rate not exceeding the rate payable on savings deposits held in RFC accounts, provided the request for such a conversion is made by the NRE account holder immediately on return to India.

(iii) Conversion of NRE deposit into FCNR(B) deposit and vice versa before maturity should be subject to the penal provision relating to premature withdrawal.

(iv) Conversion of NRSR / NRNR deposit into NRO deposit before maturity will be subject to the penal provision relating to premature withdrawal.

(v) In view of the discontinuance of NRNR / NRSR schemes with effect from April 1, 2002, the proceeds of NRNR deposits can be credited to NRE accounts on maturity but not to FCNR(B) accounts, while proceeds of NRSR accounts can be credited on maturity to NRO accounts only. In case of premature withdrawal of NRNR / NRSR deposits, the proceeds should be credited to NRO accounts only.

With effect from February 13, 2004, all aspects concerning renewal of overdue deposits may be decided by individual banks subject to their Board laying down a transparent policy in this regard and the customers being notified of the terms and conditions of renewal including interest rates, at the time of acceptance of deposit. The policy should be non-discretionary and non-discriminatory

August 2, 2006.

10
231/06-07
DBOD

Credit Card Statements indicate a minimum Amount due, which is a percentage of the total outstanding due, the Due Date etc. However, when the credit card is suspended/closed, for what ever reason, the credit card customer receives monthly statements which shows the Total Amount due as the Minimum Amount Due. It also does not specify any Due Date for Payment. The Due Date is shown as IMMEDIATE.

It has been observed that when the Bank’s representatives/agents contact the customer for payment, and the customer is not in a position to pay the entire amount in one go, they (the bank’s representatives) verbally specify an amount which they claim to be the Minimum Amount Due. Unfortunately, in the subsequent statement it is noticed that

a. Even if the verbally specified Minimum Amount Due is paid and

b. Even if the amount is paid soon after the Statement is received, the Bank invariably levies interests and penalties such as LATE PAYMENT FEE

Questions

i. Is the above procedure in conformity with Rules, Regulations and is it a standard procedure? It not what should be the correct procedure in such cases?

ii. In such cases, as cited above, can the bank charge Late payment Fee?

In terms of Master circular on credit card operations of banks dated July 2, 2007, (available on our website www.rbi.org.in athttp://rbidocs.rbi.org.in/rdocs/notification/PDFs/78385.pdf ), the overall procedure to be adopted has been advised to the banks. as under:

a. Card issuers should ensure that there is no delay in dispatching bills and the customer has sufficient number of days (at least one fortnight) for making payment before the interest starts getting charged.

b. Card issuers should quote annualized percentage rates (APR) on card products (separately for retail purchase and for cash advance, if different). The method of calculation of APR should be given with a couple of examples for better comprehension. The APR charged and the annual fee should be shown with equal prominence. The late payment charges, including the method of calculation of such charges and the number of days, should be prominently indicated. The manner in which the outstanding unpaid amount will be included for calculation of interest should also be specifically shown with prominence in all monthly statements. Even where the minimum amount indicated to keep the card valid has been paid, it should be indicated in bold letters that the interest will be charged on the amount due after the due date of payment.

c. The banks /NBFCs should not levy any charge that was not explicitly indicated to the credit card holder at the time of issue of the card and getting his / her consent. However, this would not be applicable to charges like service taxes, etc. which may subsequently be levied by the Government or any other statutory authority.

d. The terms and conditions for payment of credit card dues, including the minimum payment due, should be stipulated so as to ensure that there is no negative amortization.

e. Changes in charges (other than interest) may be made only with prospective effect giving notice of at least one month. If a credit card holder desires to surrender his credit card on account of any change in credit card charges to his disadvantage, he may be permitted to do so without the bank levying any extra charge for such closure.

Sept 13, 2006.

11
44/2007-08 DBOD

What is the licensing policy of MNC Banks?

RBI has issued a press release and notification on February 28, 2006 indicating a roadmap for presence of foreign banks. The same has been placed on RBI website www.rbi.org.in. RBI has also issued a Master Circular DBOD.No.BL.BC.16/22.01.001/2007-08 dated July 2, 2007 on the subject. The branch authorization policy for Indian Banks shall also be applicable to foreign banks subject to other conditions laid out in paragraph 19 of this Master Circular.

 

12
67/2007-08
DBOD

Whether incidental charges for preparing Bank are not uniform for all banks. Are there any guidelines by RBI in this context?

Banks have been given the freedom to fix service charges for banking transactions, which includes incidental charges for issue of bank drafts, with the approval of their Boards. While fixing service charges, they should ensure that the charges are reasonable and not out of line with the average cost of providing these services. In order to ensure transparency, banks are required to display and update on their websites the details of various service charges in a prescribed format. A Working Group constituted by the Reserve Bank to formulate a scheme for ensuring reasonableness of bank charges has in its recommendations identified 'Demand Draft – Issue ' as one of the basic services for levying of service charges in a transparent manner.

Based on the recommendations of the Working Group, RBI has issued necessary instructions to the banks vide circular DBOD.DIR.BC.No.56/ 13.03.00/ 2006-07 dated February 2, 2007 (available on our website at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/75608.pdf) on levying of charges for basic banking services.

Aug 13, 2007

13
RIA 106/
07-08 DBOD

Notifications/circulars issued regarding time limit within which all nationalized banks are required to encash Cheques deposited with them and give due credit in the concerned account.

Our instructions on immediate credit of local/outstation cheques, time frame for collection of local outstation instruments and interest payment for delayed collection have been withdrawn and banks have been advised vide our Circular DBOD.No.Leg.BC.55/09.07.005/2004-05 dated November 1, 2004 ( available on our website at http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=1997&Mode=0 ) to formulate a comprehensive and transparent cheque collection policy taking into account their technological capabilities, systems and processes adopted for clearing arrangements for collection through correspondents.

August 7, 2007

14
RIA 119/
07-08 DBOD

Whether justice can be sought in the matters of bank finance and where can a complaint be filed?

To file a complaint in banking service rendered by banks, as per the Banking Ombudsman Scheme 2006, you may approach the Banking Ombudsman of your area. The list of Banking Ombudsman is available on our website www.rbi.org.in at the link http://www.rbi.org.in/commonman/English/Scripts/AgainstBankABO.aspx

Aug 23, 2007

15
RIA128/
2007-08 DBOD

Standard rules for opening of proprietorship firm’s account

Operation instruction for instruction ‘Either or Survivor’

What about instructions for payment of interest on renewal of FDRs after due date(after 15 days).

What about rates for renewal of FDRs prescribed for as of date or after 15 days or more?

Banks have been advised to follow certain customer identification procedures for opening accounts of customers that are legal persons or entities such as corporates, companies, partnership firms, trusts etc., vide paragraph 3 of the Guidelines on ‘Know Your Customer" norms and Anti Money Laundering Measures of circular DBOD.No.AML.BC.58/14.01.001/2004-05 sated November 29, 2004 ( on the website at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/64686.pdf ).

Such operational matters are decided by the banks themselves and therefore, you may refer to banks/Indian Bank’s Association in this regard.

In terms of paragraph 2.13 of Reserve Bank of India’s Master circular on interest rates on Rupee Deposits DBOD.NO.DIR.BC.7/13.03. 00/2007-08 dated July 02, 2007 (which is available on our website), all aspects concerning renewal of overdue deposits may be decided by individual banks subject to their Boards laying down a transparent policy in this regard and the customers being notified of the terms and conditions of renewal including interest rates, at the time of acceptance of deposit. The policy should be non-discretionary and non –discriminatory.

Aug 10, 2007.

16
RIA 372/
07-08
DBOD/
DBS

If a bank acquires an NPA from another bank, what are the reporting norms stipulated by the RBI for the Assignee Bank (i.e the acquiring bank).

What are the RBI guidelines issued to Banks for declaring an Asset as NPA?

What are the norms stipulated by the RBI for Assignee banks (i.e acquiring banks) qualified to buy and deal in NPAs? Is there any norm stipulated by the RBI when a public sector bank, like the State Bank of India, wants to sell its NPAs to a private sector bank?

What are the norms stipulated by the RBI for the valuation of NPAs when sold as a cluster/basket.

What are the norms stipulated to the Assignee Bank (i.e the acquiring bank) of NPAs regarding the subsequent sale of NPAs and how should the profits be treated in their books.

Does the RBI specifically stipulate any requirements and competencies of the NPA acquiring banks. Please provide a copy of such guidelines.

All guidelines/instructions/ public notices issued by RBI from time to time regarding various aspects of NPAs and treatment of NPAs after their assignment.

RBI has prescribed 'Disclosure Requirements' for banks which purchase NPAs from other banks, vide paragraph 7 of Annexure to circular DBOD,BP.BC.16/21.04.048/2005-06 dated July 13, 2005 available at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/64686.pdf .
RBI guidelines for classifying an asset as NPA is contained in our Master Circular on 'Prudential Norms on Income Recognitions, Asset Classification and Provisioning Pertaining to the Advances Portfolio' issued vide our circular DBOD. No. BP.BO.12 /21.04.048 / 2007-08 dated July 2, 2007 available at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/78399.pdf

The norms for sale/purchase of Non Performing Assets between banks are stipulated in our circular DBOD.No.BP./BC.16/21.04.148/2005-06 dated July 13, 2005 as amended vide our circular DBOD,No.BP.BC.97/21.04.148/2006-07 dated May 16, 2007 and DBOD.No.BP.BC.34/21.04.048/2007-08 dated October 4, 2007, available at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/64686.pdf , http://rbidocs.rbi.org.in/rdocs/notification/PDFs/77377.pdf and http://rbidocs.rbi.org.in/rdocs/notification/PDFs/80478.pdf respectively.

You may please refer to paragraph 5(i) of the above circular dated July 13, 2005, regarding the valuation norms.

You may please refer to paragraph 6 of the above circular dated July 13, 2005, regarding the valuation norms.

You may please refer to paragraph 5 of the above circular regarding the valuation norms.

The 'Guidelines on sale of financial assets toSecuritisation Company/ Reconstruction Company (created under Reconstruction of Financial Assets and Enforcement ofSecurity Interest Act, 2002) and related issues issued vide our circular DBOD, NO. BP.BC.96/21.04.048/2002-03 dated April 23, 2003 is available at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/35918.pdf.
The norms for sale/purchase of non performing Assets between banks are stipulated in our circular, DBOD. No.BP.BC.16/21.04.048/2005-06 dated July 13, 2005, as amended vide our circular DBOD.NO.BP.BC.97/21.04.048/2006-07 dated May 16, 2007, and DBOD.No.BP.BC.34/21.04.048/2007-08 dated October 4, 2007, copies of which are available at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/64686.pdf and http://rbidocs.rbi.org.in/rdocs/notification/PDFs/80478.pdf and Master Circular on 'Prudential Norms on Income Recognitions, Asset Classification and Provisioning Pertaining to the Advances Portfolio' issued vide our circular DBOD.No.BP.BO.12/21.04.048/2007-08 dated July 2, 2007 may be referred at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/78399.pdf

Sep 18, 2007

17
RIA1495/
2007-08 DBOD

"What is the period for encashment of outstation cheque and what is maximum period prescribed by the RBI guidelines? What are the rights of the customer in case the cheque is encashed beyond the prescribed date?"

Banks have been advised by us vide our circular DBOD.No.Leg.BC.55/09.07.005/2004-05 dated November 1, 2004 (copy enclosed) that they may formulate a comprehensive and transparent Cheque Collection Policy taking into account their technological capabilities , systems and processes adopted for clearing arrangements for collection through correspondents. We had issued further instructions to the Indian Bank Association to issue suitable instructions to the banks to incorporate the following points in the cheque collection policy formulated by them:-

(i) In respect of cheques lost in transit or in the clearing process or at the paying bank's branch, banks should immediately bring the same to the notice of the account tholder so that the accountholder can inform the drawer to record stop payment and can also take care that other cheques issued by him are not dishonoured due to non-credit of the amount of lost cheques / instruments.

(ii) The onus of such loss lies with the collecting banker and not with the account holder.

(iii) The banks should reimburse the account holder related expenses for obtaining duplicate instruments and also interest for reasonable delays occurred in obtaining the same.

(iv) If the cheque / instrument has been lost at the paying bank’s branch, the collecting banker should have a right to recover the amount reimbursed to the customer for the loss of the cheque / instrument from the paying banker.

Further the Indian Bank Association has issued a circular to the banks in this regard vide No. OPR/Misc.3/107 dated May 6, 2005.

March 26, 2008.

18
RIA1576/
2007-08 DBOD
/DBS

"Whether interest can be charged after NPA?'

"Whether interest can be charged after NPA under one Time Settlement Scheme. If yes, what will be the rate of interest and on which amount it will be charged?'

"Whether there is any Notification that a bank can make recovery equal to double the capital amount?"

Instructions issued by us in this regard are available in paragraph No. 3 of the Mater Circular DBOD.BP.BC.12/ 21.04.048/ 2007-08 dated July 2, 2007, which is available on our website under 'Notification'. It may be added that the Reserve Bank of India has not issued any circular stating that interest should not be paid after declaration of an account as Non Performing Assets

We have no information on rate of interest charged by banks under their own ‘One Time Settlement Scheme’ as the interest rates have been deregulated by the Reserve Bank of India.

April 8, 2008.

19
RIA1578/
2007-08 DBOD
/DBS

Under which Sections of RBI Act 1934 and Banking Regulation Act, 1949 are all the circulars/notifications/guidelines of Reserve Bank of India issued?

The circulars issued by the Reserve Bank of India are either mandatory or advisory, depending upon their tenor content, intent and the provisions under which they are issued. The circulars /directions issued by the Reserve Bank of India may not always contain/mention the provisions under which those are issued. Therefore, in a given case, whether the circular /direction is issued in a mandatory form or otherwise has to be decided on the basis of its content .In some cases , they may be partly mandatory and partly advisory .

April 11, 2008.

20
RIA2517/
2007-08 DBOD

"What is the policy of Government of India, are there any specific legislative enactments (law / legal provisions) prohibiting discrimination on grounds of sex, caste, religion. By banks in lending-(in India) which banks are required to comply with. If yes, brief detail of the law and date of enactment and your policies and procedures pursuant to the compliance of the same."

We have vide our Circular no. DBOD. Leg No. BC 104/09.07.007/ 2002-03 dated May 5, 2003 – (copy enclosed) issued Guidelines on Fair Practices Code for Lenders, which are required to be framed by banks duly adopted by their Boards. The Guidelines inter alia also contain the following paragraphs

(i) Lenders must not discriminate on grounds of sex, caste and religion in the matter of lending. However, this does not preclude lenders from participating in credit-linked schemes framed for weaker sections of the society.

Further, in terms of paragraph 2.17 of the 'Code of Bank's Commitments to Customers' issued by the Banking Codes and Standards Board of India (BCSBI), which refers to adoption and practice of a non-discriminatory policy, banks should not discriminate on the basis of age, race, gender, marital status, religion or disability. BCSBI is an independent and autonomous watch dog to monitor and ensure that the Banking Codes and Standards adopted by the banks are adhered to in true spirit while delivering their services. The above code is a voluntary Code, which sets minimum standards of banking practices for banks to follow when they are dealing with individual customers. The Code may be accessed on the web site of BCSBI using the URL http://www.bcsbi.org.in/Code_of_Banks.html .

June 16, 2008

21
RIA 582/05-06
DBS

Nature and method of processing done by the RBI to applications for empanelment of Auditors– details of such applications. Details of aspects with reference whereof the processing was done.

 

 

 

 

 

 

 

 

Please give details of eligibility norms/ categorization norms and other norms, if any, which were applied to the applications for the purpose of selecting bank branch auditors and for the purpose of categorizing them.

The Institute of Chartered Accountants of India (ICAI) has been entrusted with the work relating to the preparation of the list of eligible auditors/ audit firms, based on the eligibility norms for empanelment of auditors/ audit firms for appointment as statutory branch auditors in PSBs. The eligibility / categorisation norms are:

Cate-gory

No. of CAs exclusively associated with the firm
(Full time)

No. of partners exclusively associated with the firm (full time) (Out of 2)

Profe-ssional
staff

Bank audit experience

Standing of the audit firm

(1)

(2)

(3)

(4)

(5)

(6)

I.

5

3

8

The firm or at least one of the partners should have a minimum of 8 years experience of branch audit of a nationalised bank and / or of a private sector bank with deposits of not less than Rs.500 crore.

8 years

II.

3

2

6

The firm or atleast one of the partners should have preferably conducted branch audit of a nationalised bank or of a private sector bank with deposits not less than Rs.500 crore for atleast 5 years

6 years
(for the firm or atleast one partner)

III.

2

1

4

The firm or atleast one of the CAs should have preferably conducted branch audit of a nationalised bank or of a private sector bank with deposits not less than Rs.500 crore for atleast 3 years 

5 years
(for the firm or atleast one partner)

IV.

2                         2
(The proprietary concerns of Chartered Accountants with 1 paid CA, 2 professional staff and not having any statutory branch audit experience of a nationalised bank or of a private sector bank with deposits not less than Rs.500 crore will be treated at par with the partnership firm after deducting their 3 years seniority from the date of their establishment).  

2

  

Not necessary

3 years

 

 

PSBs are required to draw the branch audit programme for the statutory audit of the branches every year as per the prescribed procedure.

After the exclusion of the firms which are to be denied audit during the relevant year, two lists, viz. “continuing – Part A” and “fresh allotment - Part B” of the firms are prepared as per the following procedure:

1. Branch auditors are generally appointed / continued for tenure of 5 years in a bank subject to their firm complying with the eligibility norms during the relevant years. Effective from the year 2006-07, the tenure for branch auditors has been made 4 years.

2. Branch auditors, after completion of their tenure in a bank as detailed above, are either placed under “compulsory rest” or “rotated” depending upon the place of their registration/ operation. 33 centres (listed in the Attachment 2) are currently identified as surplus centres where the number of eligible audit firms is more than the number of available vacancies for appointment of branch auditors in PSBs. Audit firms after completion of the tenure as branch auditors in these centres will be placed under “compulsory rest” for a period of two years. Audit firms from centres other than the above mentioned 33 centres will be rotated to other banks.

3. RBI only allots the eligible audit firms to banks depending upon the requirement of branch auditors based on the branch audit programme drawn up by the banks. The allotment of branches for statutory audit to the audit firms is done by the banks themselves.

List of 33 centres being treated as “rested districts” for the
pupose of appointment of branch auditors in public sector banks

Sr.No.

Name of the District

1.

Kolkata

2.

Ghaziabad

3.

Delhi

4.

Ludhiana

5.

Panipat

6.

Panchkula

7.

Gurgaon

8.

Sonipat

9.

Faridabad

10.

Chandigarh

11.

Jaipur

12.

Bhilwara

13.

Ajmer

14.

Bikaner

15.

Jodhpur

16.

Udaipur

17.

Kota

18.

Vadodara

19.

Surat

20.

Ahmedabad

21.

Brihan Mumbai

22.

Thane

23.

Kolhapur

24.

Solapur

25.

Pune

26.

Nagpur

27.

Indore

28.

Raipur

29.

Hyderabad

30.

Bangalore

31.

Chennai

32.

Coimbatore

33.

Ernakulam

 

614/2008-09

What are the new guidelines on maintain minimum balance in savings bank accounts?

Is it essential to make transactions at an interval of 6 months in a in a savings bank account? Why the account is blocked if there is no transaction after 6 months and what is the legal basis of doing this by the bank?

If there is no transaction in an account for more than 6 months a certain amount is deducted from it, what is the legal basis of this and where does the amount is deposited, provide copy of the Government Order

Reserve Bank of India has not stipulated any minimum balance to be maintained in savings accounts. Reserve Bank of India has also not stipulated levy of any service charge, if the minimum balance is not maintained in such accounts. Such stipulations are made by individual banks themselves, as per their Board approved policies. Reserve Bank of India has issued necessary instructions advising banks that they should inform their customers regarding the requirement of minimum balance at the time of opening savings accounts and levying of charges etc., if the minimum balance is not maintained. Any change in regard to minimum balance should also be intimated to the account holders by banks at least one month in advance

We have advised banks vide our circular no. BC.34 dated August 22, 2008 that a savings as well as current account should be treated as inoperative/ dormant account, if there are no transactions in the account for over a period of two years.

In the context of granting greater functional autonomy to banks, operational freedom has been given to banks on all matters pertaining to banking transactions. Accordingly, with effect from September 7, 1999 banks have been given freedom to fix service charges for various types of services rendered by them. While fixing service charges, banks should ensure that the charges are reasonable and not out of line with the average cost of providing these services. In order to ensure transparency, banks have been advised to display and update on their websites the details of various service charges in a prescribed format.

October 7, 2008

589/2008-09

Whether a bank can charge money in the name of foreclosure charges in case of prepayment of personal loan if it is being repaid in 14th month when the entire loan is repayable in 36 months? If yes, whether such charges can be 5.62% at O/S Principal?”

We have not issued any guidelines regarding foreclosure charges. In the context of granting greater functional autonomy to banks, operational freedom has been given to banks on all matters pertaining to service charges on banking transactions. Accordingly, with effect from September 1999, banks have been given the freedom to fix service charges for various types of services with the approval of their respective Boards. However, banks have been advised that while fixing service charges, they should ensure that the charges are reasonable and not out of line with the average cost of providing these services. Further, the management of loan recovery activity in a bank is essentially an internal management function and each bank's Board is authorized to frame suitable policies in this regard.

October 7, 2008

269/2008-09

On which date the Credit Information Companies (Regulation) Act, 2005 came into force?

Whether Credit Information Bureau (India) Limited, as credit information company, has been granted a certificate of Registration under sub-section (2) of Section 5 of the Credit Information companies (Regulation) Act, 2005? If so, on which date was it registered?

Are the banks not duty bound to disclose to its customers when particulars are sought by them about the credit information furnished by it to Credit Information Company?

The Credit Information Companies (Regulation) Act, 2005 (CIC Act) came into force with effect from December 14, 2006.

The Reserve Bank of India has not yet granted Certificate of Registration (CoR) to Credit Information Bureau (India) Ltd. (CIBIL) for continuing business of credit information under CIC Act. Their application is pending with Reserve Bank of India.

In terms of Section 21 of the Act, a borrower can request for credit information report from credit institution if he/she has applied for a credit facility and it is mandatory for the credit institution to supply him/her with a copy of credit information report.

September 2, 2008

1828/08-09 DBOD

Whether the banks may or may not provide any New /Additional Loan Facility to any existing NPA a/c which is in doubtful and /or loss category except rehabilitation scheme.

There are no RBI guidelines prohibiting a bank from extending any new or additional loan facility to an existing customer having an existing NPA account. Most credit related matters have been deregulated by RBI. Banks formulate their credit policies keeping in view the overall prudential norms prescribed by RBI and on the basis of their risk appetite. Lending decisions are taken by banks based on their commercial judgment and merits of each case, keeping in view the credit policies approved by their Board of Directors.'.

February 12, 2009.

RIA 1602 DBOD

Details of PLR rate applicable to a commercial bank during December 2005 to 2008.
Guidelines issued by RBI for fixing EMI and/or charging the rate of interest by private bank to/from customers/borrowers of housing loan since December 2005.

Guidelines issued by the RBI, for adjustment ratio of EMI towards the principal amount and interest amount in respect of Housing Building loan.

Benchmark Prime Lending Rate (BPLR), which is the reference rate for banks for credit limits over Rs.2 lakhs, is decided by the banks themselves with the approval of the respective Boards. Data on banks' BPLR from the quarter ended June 2002 onwards is available on our website www.rbi.org.in under the link "For Bankers-Lending Rates of Banks-Bank wise Data".

With effect from October 19, 1994 RBI has deregulated the interest rates on advances above Rs.2 lakh and these interest rates are determined by the banks themselves with the approval of their Boards, subject to Benchmark Prime Lending Rate (BPLR) and Spread guidelines. Individual banks therefore determine interest rates to be charged to a particular borrower subject to BPLR and Spread guidelines. Loans upto Rs.2 lakh carry the prescription of not exceeding the BPLR. However, banks have the freedom to determine the rate of interest, without reference to BPLR and regardless of size in respect of loans for purchase of consumer durables and other non-priority sector personal loans including credit cards dues.

Further, the management of loan sanctioning/loan recovery activity in a bank, including fixing of EMI and/or charging of interest rate, is essentially an internal management function and each bank's Board is authorized to frame suitable policies in this regard.
Feb 4, 2009

2099/08-09 DBOD

(1)Service charges/ percentage of commission payable to Nationlised Banks for disbursement of monthly pension to Karnataka State Pensioners. Specify whether the above charges / commission is paid by RBI or Government of Karnataka.

(2)Are there standing orders/ circulars etc. for delayed payment of arrears (any kind) payable to pensioners? If so, a copy of the same may kindly be sent.

(3) Is there any alternative method / procedure to make entries in the customer’s Bank Pass Book in case the computer system goes out of order for a long period?

The banks are paid commission of Rs. 60/- for each pension transaction. Further, agency commission is payable to an agency bank at the full rate provided the transactions are handled by the bank at all stages. Where, however, the work is shared between two banks (i.e. agency bank and Reserve Bank of India/ State Bank of India), the commission is shared between the agency banks and Reserve Bank of India/ State Bank of India in the proportion of 75:25.
(ii) The agency commission is paid by Reserve Bank of India and not by Government of Karnataka.

Yes, the ‘Revised Orders - Payment of Pension through Public Sector Banks in Karnataka’ Published by Finance Department, Government of Karnataka, Bangalore deals with delayed payment of arrears (any kind) payable to pensioners. In this context, an extract of para 16.4 (c) of the said orders issued by Government of Karnataka is enclosed.

We have not issued any specific guidelines regarding alternative method/procedure to make entries in the customer's bank pass book in case the computer system goes out of order for a long period. However, as per instructions contained in paragraph 5.6.2 (Updating Passbooks) of the Master Circular DBOD. No.Leg.BC.75/09.07.005/2008-09 dated November 3, 2008 on Customer Service, banks have been advised the procedures to be followed wherever passbooks are held back for updating. Further, banks have also been advised to put in place Business Continuity Plans and Disaster Recovery Plans for ensuring uninterrupted services to the customers.

March 19, 2009
4103/11-12 DBOD

1. What is the validity time (180 days or 6 months) of a cheque.?

2. Under which provision of law is it provided?

· As per extant banking practice the validity period of a cheque is six months from the date of issue.

· Now, banks have been advised vide circular DBOD. AML. BC. No. 47 / 14.01.001 / 2011-12 dated November 4, 2011 that with effect from April 1, 2012, banks should not make payment of cheques / drafts / pay orders / banker’s cheques bearing that date or any subsequent date, if they are presented beyond the period of three months from the date of such instrument.

· The extant validity period of a cheque for six months from the date of issue is in accordance with the banking practice.

· The instructions dated November 4, 2011 applicable with effect from April 1, 2012 are issued to banks under Section 35A of the Banking Regulation Act, 1949.
March 5, 2012
4327/11-12 DBS

1. What are the RBI criteria for judging profitability of Indian banks?

2. What are the RBI criteria for judging productivity of Indian banks?

For calculating financial performance of banks, various criteria are being used by Reserve Bank of India including Annual Financial Inspection of the banks, conducted under Section 35 of the Banking Regulation Act, 1949. RBI assesses the bank’s financial soundness, net worth, compliance with licensing requirements, Net profit etc. under AFIs. Certain financial ratios such as earnings, Return on Assets, Return on Equity, Net Interest Margin (NIM), Capital Adequacy Ratio (CRAR), Gross and Net Non-performing Advances Ratio, etc. are also used for assessing the profitability and productivity of the Indian banks.

March 29, 2012

RIA No 4272/2013-14

1. Is M&AoA mandatory for opening a current a/c of a Pvt. Ltd. Company?

Yes, Memorandum and Articles of Association is mandatory for opening an account of a company.

RBI’s instructions regarding the documents required for opening bank accounts of companies are mentioned in Annex I of the Reserve Bank’s Master Circular (containing 77 pages) DBOD. AML. BC. No. 24 /14.01.001/2013-14 dated July 1, 2013 on Know Your Customer (KYC) Norms / Anti-Money Laundering (AML) Standards/ Combating of Financing of Terrorism (CFT)/ Obligation of banks under PMLA, 2002.

 They are :

(i) Certificate of incorporation and Memorandum & Articles of Association (ii) Resolution of the Board of Directors to open an account and identification of those who have authority to operate the account (iii) Power of Attorney granted to its managers, officers or employees to transact business on its behalf (iv) Copy of PAN allotment letter (v) Copy of the telephone bill.

February 28, 2014

2. Is the Certificate of Incorporation of the company essential for opening a current a/c of a Pvt. Ltd. Company?

22. Are RBI norms same for Public Sector and Private Banks?

The regulatory prudential norms are applicable to all commercial banks including public sector banks and private sector banks.  RBI also issues Guidelines/ directions etc. to Scheduled Commercial Banks (SCBs) under various provisions of Banking Regulation Act, 1949 and RBI Act, 1934 etc.

These instructions are available on our website www.rbi.org.in under the head “Notifications.”


Information pertaining to Urban Co-operative Banks

1
RIA 453/05-06
UBD

Norms for classifying borrowal accounts of Urban Co-operative Banks as NPAs?

Norms for classification of borrowal accounts as NPAs is provided in our Master Circular UBD(PCB)Cir.No.1/09. 140.00/05-06 dated July 4, 2005 on Income Recognition, Asset Classification and Provisioning, which is available on our website under the title ‘Notifications’

April 21, 2006

2
RIA 430/05-06
UBD

RBI guidelines on merger/ amalgamation of urban co-operative banks (UCBs)?

RBI guidelines on merger/amalgamation of UCBs are available in our circulars No.UBD(PCB)Cir.36/ 09.169.00/2004-05 dated February 2, 2005, and Circular No. UBD(PCB)Cir.18/09.169. 00/2005-06 dated November 22, 2005. These circulars are available on our website at http://rbi.org.in/scripts/Notification User.aspx

April 12, 2006

3
RIA 455/05-06
UBD/
DNBS

Whether a co-operative bank is registered under SARFAESI Act with Reserve Bank of India as a “Securitisation Company” and/or “Securitisation Creditor”? Whether such a bank can automatically become Securitisation Company/Creditor merely on it being registered as a banking company under Banking Regulation Act, 1949 with Reserve Bank of India? Whether such a bank is required to renew its Certificate every year as contemplated under SARFAESI Act? Whether the bank is required to approve a person to be appointed as “Authorised Officer”? Whether such a person is required to be registered as contemplated under SARFAESI Act?

Co-operative Banks fall within the definition of “secured creditor” under SARFESI Act by virtue of the definition contained in section 2(1)(c )(v) of the Act in view of the notification No. S O.105(E) dated 28th January, 2003 of the Central Government declaring “Co-operative Bank” as defined in clause (cci) of section 5 of Banking Regulation Act, 1949 to be a bank for the purposes of SARFAESI. Section 13 of SARFAESI Act, 2002, authorizes the secured creditors to enforce any security interest created in favour of it by the borrower without the intervention of the Court or Tribunal in accordance with provisions of the Act. As a co-operative bank is not a Securitisation Company, the questions regarding renewal of certificate, appointment of “Authorised Officer”, application for registration, etc., would not be relevant.

The query as to whether enforcement of security interest by a secured creditor is required to be registered with “Central Registry” is an issue relating to the interpretation of the provisions of the Act and it is not “information” covered under the Right to Information Act. Reserve Bank does not hold information regarding the exercise of powers by the said bank under section 13(4) of the Act. A reference is also drawn to Section 20 of the Act. Such Central Registry contemplated under the Act would not be a part of the Reserve Bank. It is also clarified that the Central Government has so far not issued any notification to set-up the Central Registry.

April 21, 2006

4
RIA 456/05-06
UBD

(i) The validity period of Co-operative Banks’ pay order?

(ii) Whether co-op banks have the right to withdraw or deposit the amount in customer's saving account without his permission?

(i) Bank’s pay order is basically a bankers’ cheque and hence valid for six months.

(ii) Every bank frames saving bank rules. Deposits/withdrawals into the account (SB Account) are subject to these rules. Banks generally debit SB account with cheque book charges, account maintenance charges, etc.

April 21, 2006

5
RIA 479/05-06
UBD

List of names of scheduled urban co-op banks operating in Maharashtra state

The information is available on the website at www.rbi.org.in/scripts/sitemaps.aspx

April 27, 2006

6
RIA 22/07-08
UBD

RBI guidelines to Co-operative Banks on premature withdrawal of deposits

Paragraph 8 of the Master Circular no 1 dated July 2,
2007 (on our website at http://www.rbi.org.in/scripts/NotificationUser.aspx?Mode
=0&Id=3691
) and a Circular UBD(PCB) 78/DC.V.(B) 92-93 dated May 26, 1993 may be referred.

April 26, 2006

Information pertaining to Non-Banking Financial Institutions

3

The Non-Banking Financial Companies are lending cash against gold deposits and collecting interest against the loan amount. How much percentage of the cost of the gold deposited can be given as loan and what shall be the interest to be collected against the loan according to the Reserve Bank of India’s specifications.

In terms of extant instructions, Non-Banking Financial Companies (NBFCs) are required to maintain a Loan-to-Value (LTV) ratio not exceeding 75 percent for loans granted against the collateral of gold jewellery.

The interest rates charged by NBFCs are governed by the terms and conditions of the loan agreement entered into by the borrower and the NBFC. The Reserve Bank has not specified any interest rate that can be charged by any NBFC. However, in order to ensure transparency in such matters, the NBFCs have been advised by the Reserve Bank to adopt a Fair Practice Code with the approval of their Boards. They are also advised to lay out appropriate internal principles and procedures in determining interest rates and other charges. The latest circular issued to NBFCs on Fair Practices Code is Master Circular DNBS (PD) CC No. 340/03.10.042/2013-14 dated July 1, 2013 which is available on our website www.rbi.org.in > sitemap > Master Circulars – Fair Practice Code. http://rbi.org.in/scripts/BS_ViewMasterCirculardetails.aspx

April 10, 2014
RIA No4357/ 2013-14 1. Kindly inform me about the maximum rate of interest that can be charged by a Non-Banking Financial Company in regard to loans lent to loanees/borrowers against the security of Gold Ornaments.

The Reserve Bank has not prescribed any ceiling on interest rate that can be charged by an NBFC. The interest rate chargeable, on all loans including loans against Gold Ornaments, is governed by the terms and conditions of the loan agreement entered into between the borrower and the NBFC. However, in order to ensure transparency in such matters, the NBFCs have been advised by the Reserve Bank to adopt a Fair Practices Code (FPC) with the approval of their Boards. The latest circular issued to NBFCs on FPC is Master Circular DNBS (PD) CC No. 340/03.10.042/2013-14 dated July 1, 2013 which is available on our website www.rbi.org.in > sitemap > Master Circulars – Fair Practice Code

Available at the link: http://rbi.org.in/scripts/ BS_ViewMasterCirculardetails.aspx

February 25, 2014
2. Kindly furnish me the prevailing rules, regulations, norms, notifications, orders etc. pertaining to the charge of interest on loans lent by Non-Banking Financial Companies as against security of Gold Ornaments.

Instructions in regard to rate of interest chargeable on all types of loans including loans against security of Gold Ornaments are consolidated in our Master Circular on the Fair Practices Code referred to above.

3. Kindly inform me as to the applicability of the AP Pawn Brokers Act, 2002 to the (Act No. 6 of 2002, passed by the Andhra Pradesh Legislature & came into force with effect from 15.10.2003) in regard to the loans and advances lent by Non-Banking Financial Companies to the public at large against the security of Gold/gold ornaments.

All loans, including loans against the security of Gold/gold ornaments, granted by NBFCs, registered with the Reserve Bank of India under Section 45-IA of the RBI Act, 1934, are governed by the provisions of the said Act and the guidelines issued in this regard by the Reserve Bank.

4. Kindly inform me the prevailing rules, regulations, norms, guidelines, notifications etc. in regard to auctioning of securities by Non-Banking Financial Companies in the event of failure of the loanees to repay the borrowed amount.

Our guidelines with regard to auction of jewellery, in the event of non-repayment of loans, are available in Para C of our above referred circular, read with para V of our circular DNBS.CC.PD.No.356 / 03.10.01/ 2013-14 September 16, 2013 on Lending Against Security of Single Product – Gold Jewellery, which is available on our website www.rbi.org.in > Sitemap > NBFC List > NBFC Notifications.

Available at the link: (http://rbidocs.rbi.org.in/rdocs/ Notification/PDFs/CCN356160913L.pdf)

5. Kindly inform me the prevailing rules and regulations in regard to maximum and minimum duration for which loans can be granted by Non-Banking Financial companies against the security of Gold ornaments and the periodicity of compounding of interest.

The Reserve Bank has not prescribed maximum and minimum duration of loans and the periodicity for compounding of interest on loans granted by NBFC against any kind of security including Gold ornaments. The Non-banking Financial Companies have discretion to determine the duration and the periodicity of compounding of interest on the loans granted. However, the rate of interest disclosed should be annualised rate so that the borrower is aware of the exact rate that would be charged to the account.

4080/
13-14
DNBS

Which of the Foreign or Indian, Private banks, NBFC, Financial Institute and the Banks/ NBFC and here quotd Bank or NBFC can charge compound interest (cumulative interest)? If they can charge cumulative interest then RBI or which of it's Department or Department of Non-Banking Supervision (DNBS) or which Authority has been permitted to charge this? Particularily which Bank / NBFC can charge cumulative interest and express in detail the permission given to them?

(1) Citi Financial Consumer Finance India Ltd. called as “Citi Financial”, (2) HDFC Bank Ltd., (3) Kotak Mahindra Bank Ltd., (4) Kotak Mahindra Prime Ltd., (5) Reliance Capital Ltd., (6) Barclays Bank Ltd., (7) ICICI Bank Ltd., (8) India Bulls.

Non-Banking Financial Companies (NBFC) are registered with the Reserve Bank under Section 45 IA of the RBI Act, 1934. The Reserve Bank has not prescribed any specific interest rate that should be charged by NBFCs or “cumulative interest”. The interest rates charged by NBFCs are governed by the terms and conditions of the loan agreement entered into between the borrower and the NBFC. Further, our Master Circular on this subject (Fair Practices Code) states that “The NBFCs should convey in writing to the borrower in the vernacular language as understood by the borrower by means of sanction letter or otherwise, amount of loan sanctioned along with the terms and conditions including annualised rate of interest and method of application thereof and keep the acceptance of these terms and conditions by the borrower on its record.”

In order to ensure transparency in such matters, NBFCs have been advised by the Reserve Bank to adopt a Fair Practices Code with the approval of their Boards. The latest circular issued to NBFCs on Fair Practices Code is Master Circular DNBS (PD) CC No. 340/03.10.042/2013-14 dated July 1, 2013 which is available on our website www.rbi.org.in > sitemap > Master Circulars – Fair Practice Code at the link http://rbi.org.in/scripts/BS_ViewMaster Circulardetails.aspx?did=333

The Department of Non-Banking Supervision regulates and supervises the Non-Banking Financial Companies and has issued the above guidelines to them.

February 24, 2014

1
RIA 433/05-06
DNBS

Is it permissible for a non-banking financial company (NBFC) to carry on business without registering with the Reserve Bank of India? If not, and if a NBFC carries on such business, what action would be taken against such a company?

As per Section 45 IA of the Reserve Bank of India Act, 1934, no NBFC shall commence or carry on the business of non-banking financial institution (NBFI) without obtaining certificate of registration (CoR) from the Reserve Bank of India. Business activities to be carried on by such NBFCs are provided under Section 45 I(c) of the RBI Act, 1934. The Reserve Bank of India may take appropriate action against any person (NBFC) contravening the provisions of RBI Act, 1934 and the Directions issued there under.

March 28, 2006

2
RIA 461/05-06
DNBS

What are the businesses that a company which is registered as a Residuary Non-Banking Company (RNBC) with RBI can undertake?

A company registered as a RNBC is defined as a non-banking institution, in terms of the Residuary Non-Banking Companies (Reserve Bank) Directions, 1987. RNBCs are companies which receive any deposit under any scheme or arrangement, by whatever name called, in one lumpsum of in installment by way of contributions or subscriptions or by sale of units or certificates or other instruments, or in any other manner and which, according to the definitions contained in the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998, or as the case may be, the Miscellaneous Non-Banking Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1977, is not

  1. an equipment leasing company
  2. a hire purchase finance company
  3. a housing finance company
  4. an insurance company
  5. an investment company
  6. a loan company
  7. a mutual benefit company
  8. miscellaneous non-banking company, and
  9. a mutual benefit company.

April 25, 2006

3
RIA 472, 473/2005-06
DNBS

Does law permit a NBFC governed by RBI rules to disburse loan amt by cash/ through bearer cheque

The mode of disbursal of loan amounts by NBFCs is not governed by RBI regulations. As regards the business practices of NBFCs, these are matters of contract between the NBFC and the borrower and therefore the loan transaction between the borrower and NBFC is regulated by the terms and conditions of the contract. Any grievances in this regard can be raised before the appropriate courts (both civil and criminal) including the local Consumer Forums, as you may deem fit. We may also add that no guidelines have been issued by Reserve Bank relating to vehicle financing by NBFCs.

April 25, 2006

4
RIA 182, /2007-08
DNBS

Rules and Regulations to form a Banking and Non Banking Financial Organizations

As far as Non – Banking Financial companies (NBFC) are concerned, as per Section 45 – IA (1) of Reserve Bank of India Act, 1934, no NBFC shall commence or carry on business of a non – banking financial institution without –

(a) Obtaining a certificate of registration; and

(b) Having the net owned fund (NOF) of rupees twenty - five lakh or such other amount, not exceeding rupees two hundred lakh.

Currently, an NBFC requires NOF of Rs 200 lakh to be eligible for registration as a non banking financial institution and you may refer to RBI's website, www.rbi.org.in ( go to Sitemap>NBFC list>Forms/returns) for other details and specimen application form for certificate of registration to commence / carry on the business of a non- banking financial institution by a company and the requirements to be complied with and documents to be submitted to RBI by NBFCs for obtaining Certificate of Registration from RBI.

3. As regards query about licensing of new bank, at present RBI is not considering any request for opening of new banks in the private sector. As and when RBI considers it necessary to invite applications for opening of new banks in the private sector, a public announcement indicating the detailed norms for setting up a bank will be made. The same will also be made available on the RBI website www.rbi.org.in

4. Banks are regulated by Reserve Bank of India under provisions of the Banking Regulation Act, 1949 and Reserve Bank of India act, 1934.

August 21, 2007.

5
RIA 1648, /2007-08
DNBS

"Does the money lending business under hire purchase require registration / permission from RBI; if yes under what provision of law?"

Granting of License/ permission for money lending activity is under the jurisdiction of concerned State Governments. In case any non-banking financial activity (e.g. hire purchase and leasing) is to be undertaken, such activity cannot be commenced or carried on without a Certificate of Registration from RBI as per Section 45 IA of RBI Act, 1934.

April 9, 2008

2673/13-14 DNBS

Are Non-Banking Finance Companies (NBFC) in India allowed to give loans to NPA accounts of nationalized and private banks?

NBFCs lend based on their own credit appraisal mechanism.

Dec 11, 2013

Whether they are regulated to a point of Rate of Interest charged by them? Or they can charge whatsoever they would like to under the guidelines of honorable RBI?

Rate of Interest on loans is a contractual obligation between NBFC and borrower. RBI has not issued any guidelines in this regard. However, the Board of each NBFC has to adopt an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium, etc and determine the rate of interest to be charged for loans and advances. NBFC cannot charge interest that are seen to be excessive. The rate of interest should be annualized rates so that the borrower is aware of the exact rates that would be charged to the account. Further, the rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers has to be disclosed by the NBFC to the borrower or customer in the application form and communicated explicitly in the sanction letter.

In addition, the Board of the NBFC has to adopt Fair Practice Code issued by the Bank vide Master Circular DNBS(PD) CC No. 340 / 03.10.042/ 2013-14 dated July 1, 2013 which deals, inter alia, with transparency in interest rates charged to the borrower.

 

If a NBFC is charging any amount of ROI to any client then can a complaint can be made, if yes to whom?

Grievances can be addressed to the Grievances Redressal Officer of the company. In case the NBFC does not respond, the matter can be taken up with the concerned Regional Office of the Department in whose jurisdiction the company is registered.

 

Information pertaining to Financial Market Department

1
RIA 1124, /2007-08
FMD


Details of Memorandum of Understanding entered between the Reserve Bank of India and the Ministry of Finance, Govt of India, detailing the rationale and operational modalities of the Market Stabilisation Scheme.

The details are available on our website www.rbi.org.in at http://www.rbi.org.in/scripts/ BS_PressReleaseDisplay.aspx?prid=9886

January 31, 2008

1654/13-14 FMD

On which date was Indian currency Rupee devalued in terms of American Dollar for the first time and what were the reasons for the devaluation?

 

Under RTI Act, furnish the reasons for devaluation of Rupee in terms of Dollar as stated by the Government, in Hindi and English.

Consequent to the devaluation of Pound Sterling, Rupee was automatically devalued to the same extent (as the Pound Sterling) on 18 September 1949. Rupee was again devalued on June 06, 1966 to correct the external payments which had reached a state of critical disequilibrium. The measure was also resorted to with a view to maintain the existing exports by bringing about a better alignment between internal and external prices and thus giving exports greater competitive strength. Corresponding new rate of exchange was Rs.7.50 to 1 US dollar as against the previous rate of Rs. 4.76 to 1 US dollar.

As regards the two way movement of exchange rate of Indian Rupee, it is advised that the Reserve Bank does not control the foreign exchange rate of Rupee. The exchange rate of the Rupee is largely determined by demand and supply conditions in the foreign exchange market. The Reserve Bank’s role is to maintain stability in the foreign exchange market by ensuring orderly conditions without targeting a pre-specified level or band for Rupee’s exchange rate.

October 15, 2013

2627/13-14 FMD

What measure has been taken to stable or strong Indian Rupees (INR) as compared to US Dollar or other currency. Please provide all the document like minutes or meeting, circular or other related document.

In recent times, in order to stabilize the value of rupee, RBI has taken various measures like clamping restrictions on import of gold, tightening the position limits on currency futures, prohibiting arbitrage trades between futures and OTC markets, rationalizing forex outflows by residents and encouraging capital inflows.

Information on various measures taken is available in detail in the relevant Press Release on the following link-
http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx

November 25, 2013

Information pertaining to Payment and Settlement Systems

1
674/2008-09 DPSS

Time frame prescribed by the Reserve Bank of India to different banks for clearance of local and outstation cheques.

Prescription of penalty by the Reserve Bank of India for non-clearance of cheques in the prescribed time frame

Definition and explanation of terms 'local' and 'outstation' in the context of cheque clearance by the Reserve Bank of India.

The Reserve Bank of India(RBI) has advised banks to frame their own Cheque Collection Policies (CCPs) in respect of local and outstation cheques which should include explicit mention of time frame for collection of both local and outstation cheques.

Banks have been further advised vie our circular DPSS.CO.(CHD)No.873/03.09.01/2008-09 dated November 24, 2008 to modify their CCPs in accordance with orders of the National Consumer Disputes Redressal Commission in the case No.82 of 2006 on Delays in Cheque Clearing.

Accordingly, for local cheques debit and credit shall be given on the same day or at the most the next day of their presentation in clearing. Timeframe for collection of outstation cheques drawn on state capitals/major cities/ other locations should be 7/10/14 days respectively. This timeframe is the outer limit and credit shall be afforded if the process gets completed earlier.

If there is any delay in collection beyond the prescribed period, interest at the rate specified in the cheque collection policy of the bank, shall be paid. In case the rate is not spcesified in the CCP, the applicable rate shall be the interest rate on fixed deposits for the corresponding maturity. The link to the CCP of banks has been hosted on our website www.rbi.orb.in.

Local cheques are those cheques that are drawn on branches within the jurisdiction of the Local Clearing House. All other cheques would be outstation cheques. However, there are cheques called multicity cheques and at par cheques which are payable in all cities where the drawee bank has a branch irrespective of the city on which it is drawn.

October 17, 2008

6045/11-12 DPSS

Provide the details of information, guidelines, circulars, notifications and regulations made by Reserve Bank of India in chronological order for scheduled and private banks operating in India, using OTP via phone IVR and mobile phone technology for any kind of financial as well as monetary transactions to make it more convenient and secured as a system.

RBI has issued the following guidelines to make card transactions more secured:

(i) Requirement of additional factor of authentication for online transactions except Interactive Voice Response (IVR) transactions was enabled, vide, circular RBI / DPSS NO. 1501 / 02.14.003 / 2008 - 2009 dated February 18, 2009. This circular has been placed on RBI website at the link
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=4844&Mode=0

(ii) Requirement of additional factor of authentication/validation extended to IVR transaction with effect from February 1, 2011 vide, circular DPSS .CO. NO. 1503 / 02.14.003 / 2010 - 2011 dated December 31, 2010. This circular has been placed on the RBI website at the link
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6185&Mode=0

(iii) Requirement of online alerts to customers for all types of card transaction at all channels irrespective of the amount was made applicable, vide, circular DPSS. CO. PD. 2224 / 02.14.003 / 2010 - 2011 dated March 29, 2011. This circular has been placed on the RBI website at the link
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6309&Mode=0

June 27, 2012

6307/11-12 RPCD

ATM transaction is failed due to technical/network problem. Amount is not dispensed but account is debited in such circumstances. What are the rules for refund/credit of such amount? Such refund should be made within how many days?

Banks have been advised by the Reserve Bank of India, vide, circular DPSS. PD. No. 2632 / 02.10.002 / 2010 - 2011 dated May 27, 2011 that:

1. Effective from July 1, 2011, banks have to reimburse the customers, the amount wrongfully debited on account of failed ATM transactions within a maximum period of 7 working days from the receipt of the customer complaint.

2. Banks have to pay customers Rs. 100/- per day for delays beyond 7 working days from the date of receipt of the complaint.

If the complaint is not lodged within 30 days of transaction, the customer is not entitled for any compensation for delay in resolving his / her complaint.

June 27, 2012

RIA No 4541/ 2013-14

1. The date of implement of new cheques with printed name and account of cheque owner in the recognized Banks.

Reserve Bank of India vide its circular DPSS.CO.CHD.No./ 1112 / 04.07.05 / 2011-12 dated December 27, 2011 advised all banks providing cheque facility to their customers  to issue only 'CTS-2010' standard cheques across the country by September 30, 2012. Account number in such cheques should be pre-printed for current account holders and corporate customers and as far as possible to other category of customers.

However, printing the name of the account holder was not mandated by Reserve Bank of India. RBI circular issued in this regard (DPSS.CO.CHD.No. 1832 / 04.07.05 / 2009-10 dated February 22, 2010) may be referred for the purpose.

Copies of the circulars referred to above are available on the website of Reserve Bank of India under the following links :
http://www.rbi.org.in/scripts/ NotificationUser.aspx?Id=6901&Mode=0

http://www.rbi.org.in/scripts/ NotificationUser.aspx?Id=5509&Mode=0
February 17, 2014

2. The old cheques got issued prior to the date of implement of new cheques (i.e. during the year 2006) from the recognized Banks are applicable or not after the date of implement of new cheques.

Reserve Bank of India vide its circular  DPSS.CO.CHD.No.133/04.07.05/2013-14 dated July 16, 2013 notified that cheques which are not complying with CTS-2010 standards would continue to be valid but will be cleared at less frequent intervals from January 1, 2014 as detailed in paragraph 2(a) of the above referred circular.

Copy of the circular  referred to above is available on the website of Reserve Bank of India under the following link:

http://www.rbi.org.in/scripts/ NotificationUser.aspx?Id=8245&Mode=0

3. If not applicable, kindly arrange to intimate the date of disapplicable / disimplement of old cheques along with instruction, if any.

Refer to reply 2 above

Information pertaining to Foreign Exchange Department

1
RIA 422/05-06
FED

RBI permission for carrying samples while proceeding on business promotion tours abroad.

No permission or approval of the Reserve Bank of India is required for carrying samples as baggage, while traveling abroad. However, applicant may check with Customs Authorities regarding applicability of Customs Baggage Rules

April 9, 2006

2
229/06-07
FED

1. Eligibility of borrower under Automatic Route of ECB for the purpose of importing capital goods (Fishing Vessels).

2. Whether terms with the lender (Foreign supplier of Equipment) related to debt servicing are in conformity with RBI guidelines.

3. Can any department or Ministry of Government of India other than RBI or Ministry of Finance set additional conditions in this matter? Has RBI delegated any authority to any other Ministry to interfere in this procedure or only RBI is the sole authority in this matter?

Eligibility of borrower is laid down in A.P. (DIR Series) Circular No.5 dated August 1, 2005 which is available on our website www.rbi.org.in at the link http://rbidocs.rbi.org.in/rdocs/notification/PDFs/65065.pdf

Terms of debt have to be in conformity with A.P. (DIR Series) Circular No.5 dated August 1, 2005.

External Commercial Borrowing (ECB) Policy is framed by Government of India in consultation with Reserve Bank of India. Government of India, Ministry of Finance has delegated authority to administer ECB Policy to Reserve Bank of India. ECB can be raised for end-uses specified in the policy. However, transactions like import are governed by the respective policies e.g. Foreign Trade Policy of the Directorate General of Foreign Trade. In other words, if further approval or permission is required from any other regulatory authority or Govt under the relevant laws/regulations, the applicant should take the necessary approval of the concerned agency before effecting the transaction.

Sept 20, 2006.

3
378/07-08
FED

Whether any permission / approval / registration is required from RBI in case of royalty to a Foreign company by an Indian company in consideration of a Trade mark / Franchise Agreement ? If yes, what are the terms and conditions for the same?

Whether there is any notification / regulation governing the payment of royalty to a Foreign Company by an Indian Company to acquire the trademark rights of the foreign company?

Whether there is any restriction on the payment of royalty to the parent foreign companies and payment of royalty for use of TRADE MARK and brand name / Franchise rights without technology transfer under the automatic route of Reserve Bank of India?

Permission from Reserve Bank of India is not required.

The instructions/clarification on purchase of Trademarks for use in India/ payment of Royalty is given in terms of the AP Circular No 14 dated November 28, 2006 and item number 8 of Sch. II to FEM (CAT) Rules, 2000. AP (DIR Series) Circular No. 76 dated February 24, 2004 is placed on our website at the link http://rbidocs.rbi.org.in/rdocs/notification/PDFs/74403.pdf and http://rbidocs.rbi.org.in/rdocs/notification/PDFs/51521.pdf respectively.

 

Sept 21, 2007

4
495/07-08
FED

RBI guidelines to Indian Residents for purchase of residential property abroad

RBI guidelines on whether Banks operating in India are allowed to give Housing loan for such transactions

The revised guidelines are , the Indian Residents can purchase an immovable property outside India up to a ceiling limit of USD 2,00,000 per financial year under Liberalised Remittance Scheme (LRS).

In terms of paragraph 4 of A.P.(Dir.Series) circular no.51 dated May 8, 2007,
(available on our website at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/77185.pdf)
Authorised Dealers (Banks in India) are not allowed to extend any kind of credit facilities to Resident Individuals to facilitate remittances under the LRS.

Oct 5, 2007

5
RIA 200/07-08
FED

After returning to India after three years, whether an NRI can maintain, hold and operate the foreign currency accounts, which were opened abroad during his stay abroad

Whether such an NRI, during his stay abroad for three years, can open a foreign account abroad jointly along with a close relative such as his mother, who is a resident of India.

Whether such an NRI person after return to India can transfer and make remittance abroad, from his foreign currency accounts held abroad.

As per Sub-section (4) of Section 6 of Foreign Exchange Management Act, 1999, a person resident in India may hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India.

As regards holding such foreign account jointly with resident of India, it is not permissible as the pre-condition for opening such foreign account is that the account is opened when the person was resident outside India.

Same as (a) above.

May 16, 2008

6
RIA 1450/07-08
FED

(a) "Is it essential for a Foreign citizen availing "Home Loan" from any Bank / Commercial Bank within India to obtain a permission / No-Objection Certificate from the Reserve Bank of India?"

(b) "What are the other rules / regulations imposed by the Reserve Bank of India for them to avail of Home loans from any Bank /commercial Bank within India?

(If the citizen under consideration is an Indian Resident)."

Foreign nationals of non-Indian origin and resident outside India require specific prior approval of the Reserve Bank of India for acquisition of immovable property. Further, it may be mentioned that under the general permission available, the following categories can freely purchase immovable property in India:

i) Non-Resident Indian (NRI)- that is a citizen of India resident outside India

ii) A foreign national of Indian Origin or Person of Indian Origin (PIO)- that is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who

a. at any time, held Indian passport, or

b. who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

The general permission, however, covers only purchase of residential and commercial property and not for purchase of agricultural land / plantation property / farm house in India.

(b) If the applicant is a 'person resident in India' in terms of Section 2 (v) of Foreign Exchange Management Act, 1999, he/she does not require the Reserve Bank of India approval from Foreign Exchange Management Act angle for purchase of immovable property in India. 

Instructions/guidelines/documentation regarding availing Home loan are decided by the commercial bank granting loan. 

 

APPEAL 453/ RIA 1873/07-08
FED

" Can a NRI open a foreign account during his stay abroad, initially in his single name and then add his family member's name"

In terms of Regulation 3 of FEMA Notification No.10/2000-RB dated May 3, 2000, no person resident in India shall open or hold or maintain a foreign currency account, provided further that the Reserve Bank of India(RBI) may on an application made to it, permit a person resident in Ida to open or hold or maintain a foreign currency account subject to such terms and conditions as may be considered necessary. Accordingly, the resident in India will have to approach RBI for our specific approval for our opening/holding/maintaining a foreign currency account with a NRI outside India. As such a resident in India requires RBI approval to open a foreign currency account outside India along-with an NRI.

June 26, 2008

RIA 2388-07-08
FED

Do banks signing contracts for derivatives trade in foreign currency with foreign banks, require RBI permission?

Are banks authorised to trade in derivative product in foreign currency without having written a derivative contract for Corporate or SMEs?

Are Banks to Banks derivatives contracts permitted by RBI without permission?

Is it mandatory for banks to inform RBI for the amount hedged in foreign currency in derivative trade written within stipulated period. Is it mandatory to inform about the nature of Derivative product written?

Any guidelines issued by RBI for foreign currency derivatives contract or agreements.

Can a Corporate/ SMEs be allowed to enter into agreement for sell of foreign currencies without permission from RBI? Are banks permitted to buy foreign currency from corporate/SMEs?

If without any underlying a derivative is written by Indian Banks with Foreign banks, can it be termed Speculative Trade in foreign currencies or not?

If any records submitted to RBI by the following banks, relating to Foreign exchange transaction written by them under Derivatives…

No. Inter bank foreign exchange dealings are permitted freely subject to Board approved policy and limits for treasury functions of which open position and aggregate gap limits are required to be approved by RBI.
Yes.

Yes. Inter bank transactions are permitted without Reserve Bank of India permission.

No. It is not mandatory to report back to back trades in foreign currency.

The guidelines for foreign currency derivative contracts are outlined in the Master Circular 'Risk Management and Inter Bank Dealings" dated July 1, 2008, available on our website: www.rbi.org.in under 'Notification'. However, if you desire to obtain a hard copy of the circular, you may arrange to pay Rs.102/-(Rs.2/- X 52 pages) towards photocopying charges by DD/Bankers' Cheque/PO drawn in favour of Reserve Bank of India(RBI)or deposit cash, at any of the RBI offices.

Yes. A corporate /SME may sell/buy foreign currency in respect of a transaction permitted under the Foreign Exchange Management Act, 1999.

No. Because Authorised Dealer banks are free to undertake forex transactions with banks overseas for adjustment of own position or for initiating trading positions in the overseas markets.

Trade by trade transactions are not reported to Reserve Bank of India by the banks. However, the Foreign Turnover Data reported by banks, contains forwards and swaps and is reported on a weekly basis in the Weekly Statistical Supplement which is published on our website: www.rbi.org.in under Publications< Weekly.

July 9, 2008.

RIA 3307/08-09 FED

Guidelines/ Rules framed by Reserve Bank of India regarding sale of property by the Non-Resident of India at India in lieu of sale consideration and information is required whether N.R.I. Sells his property in India in consideration of money then he require permission of the R.B.I. and also has to pay tax and procedure for taking the sale consideration amount out of India and when sale consideration is above Rs. 10 Lacs.

Non – Resident Indians have been granted general permission under Regulation 3 of Notification No FEMA 21/2000 – RB dated May 3, 2000, for acquisition / transfer of immovable property other than agriculture land, farmhouse, plantation – property in India provided the same is in terms of the aforesaid Regulations. For repatriation / remittance of sale proceeds you may please refer to Regulation 6 of Notification ibid read with Notification No FEMA 13/ 2000 – RB dated May 3, 2000. This information is available on our website www.rbi.org.in (Homepage > Notification > FEMA > Notification).

July 20, 2009
2251/13-14 FED

NRI/ PIO have following two options for their current income:

1. Remit outside India
2. Transfer/ credit to NRE A/c

Whereas in case of balance held in NRO A/c- only remittance outside India is permitted and transfer / credit to NRO A/c is not permitted.

May I know the reasons recorded for the same?
In terms of para 4 of Schedule 3 to Notification No. FEMA 5/ 2000-RB dated May 3, 2000, balances in NRO accounts are not eligible for remittance outside India without the approval of Reserve Bank. Funds received by way of remittances from outside India in foreign exchange which have not lost their identity as remittable funds will only be considered by Reserve Bank for remittance outside India. Where an account (current / savings) is opened by a foreign tourist visiting India, with funds remitted from outside India in a specified manner or by sale of foreign exchange brought by him to India, authorized dealers may convert the balance in the account at the time of departure of the tourist from India into foreign currency for payment to the account holder provided the account has been maintained for a period not exceeding six months and the account has not been credited with any local funds, other than interest accrued thereon. However, in terms of A.P.(DIR Series) Circular No. 67 dated January 13, 2003, AD banks may allow remittances up to USD one million from the NRO account of NRIs / PIO subject to conditions. In view of the above, transfer of funds from NRO account to NRO account is not permissible. November 26, 2013

4537/
13-14
FED

Please inform, is an exporter allowed to sell goods on:

(A) 360 days credit from the date of Bill of Lading.

And

(B) If not then, up to 180 days credit from the date of bill of lading of such exports.

In terms of Section 8 of FEMA 1999 any amount of foreign exchange due or accrued is required to be realized and repatriated to India within such period and in such manner as may be specified by the Reserve Bank. Further, in terms of Notification No. FEMA 176 / 2008-RB dated July 23, 2008 (Export of Goods and Services) the period of realization / repatriation is 12 months from the date of export (copy enclosed).

The present instructions are as under;

(i) Units located in Special Economic Zones (SEZs) – period of realization / repatriation is 12 months from the date of export in terms of A. P. (DIR. Series) Circular No.108 dated June 11, 2013 (copy enclosed).

(ii) Goods exported to a warehouse established outside India – period of realization / repatriation is 15 months in terms of Regulation 9 of Notification No. FEMA 23 / 2000–RB dated May 03, 2000 (Export of Goods and Services) (copy enclosed).

(iii)  Status Holder Exporters – period of realization / repatriation is 12 months in terms of A. P. (DIR. Series) Circular No.35 dated April 01, 2002 (copy enclosed).

(iv) 100% Export Oriented Units and units set up under EHTPs / STPs / BTPs – period of realization / repatriation is 12 months in terms of A. P. (DIR. Series) Circular No.25 dated November 01, 2004 (copy enclosed).

(v) In cases where exporters not falling within the above categories have to realize and repatriate the export proceeds within a period of 9 months from the date of export in terms of A. P. (DIR. Series) Circular No. 105 dated May 20, 2013 read with A. P. (DIR. Series) Circular No.14 dated July 22, 2013 (copies enclosed).

March 07, 2014

RIA No4601/ 2013-14

(i) I am an Indian and I perform my business abroad.

(ii) While returning from abroad I have foreign currency.

(iii) Can I deposit my foreign currency in form of cash in my EEFC (Exchange Earners Foreign Currency) Account at any authorised Bank in India?

Our comments on issues raised are :

(1) In terms of Regulation 4 (i) of Notification No. FEMA 14 / 2000-RB dated May 03, 2000; payment for export may also be received in foreign currency notes from a buyer during his visit to India, provided the foreign currency so received is surrendered within the specified period to the AD Bank. (copy enclosed)

(2) Further, deposits in the EEFC Account can only be in the form of permissible credits to such an account as per Regulation 4 of Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000 notified vide Notification No.FEMA.10/2000-RB dated 3rd May, 2000.(copy enclosed)

March 12, 2014

Information pertaining to Rural Credit, Priority Sector Advances, Financial Inclusion etc.

1
RIA 408/05-06
RPCD

The Reserve Bank of India's guidelines on One Time Settlement (OTS) to small and medium enterprises

Circular RPCD.PLNFS.No.39/06.02.31/2005-06 dated September 3, 2005, which is available on our website at http://rbi.org.in/scripts/NotificationUser.aspx contains the Reserve Bank of India's guidelines on OTS to SMEs

April 4, 2006

2
RIA 513/05-06
RPCD

a) What is the maximum rate of interest on agricultural loans that can be charged by the financial institutions under RBI?

c) As per the special relief measures announced in the 2004 budget speech of the Hon. Central Finance Minister in respect of peasants affected by natural calamity, it is observed from the website that the loans of the farmers in the drought affected districts can be closed by repaying the balance outstanding in the principal as on 31.3.2001 and amount paid after 31.3.2001 should be deducted from the loan balance. Similarly, those who are not capable of repaying the loan should be given moratorium for two years and the repaying period should be extended by next three years. Are the banks liable for extending the above relief measures to the deserving farmers? If so, it is requested that a copy of the circular issued by RBI in this regard may kindly be forwarded.

d) What is meant by the word moratorium as seen in the circular? Do the financial institutions have permission to force the loanees for repayment of the principal or interest during this moratorium period?

e) Is there any One time Settlement Scheme in vogue in respect of defaulters of agricultural loans? If so, details of the same.

a) As per the interest rate policy of RBI, interest rates on loans given by commercial banks have been deregulated, except that the interest rate on loans up to Rs 2 lakh should not exceed the Benchmark Prime Lending Rate (BPLR) of the banks concerned. Commercial banks are, therefore, free to decide their lending rates on loans above Rs.2 lakhs, subject to the announcement of BPLR. Banks are also free to lend at sub-BPLR rates to creditworthy borrowers based on an objective and transparent policy, subject to the approval of their Boards. Banks decide their BPLR by taking into account, inter alia, their cost of funds, transaction cost and risk cost. As regards RRBs and Co-operative Banks, the interest rates on loans have been completely deregulated.

c) RBI vide circular dated RPCD.No.Plan.BC.92/ 04.09.01/ 2004-05 dated June 24, 2004.(Copy available on our website www.rbi.org.in under the title 'Notification') had advised all scheduled commercial banks to extend the relief measures.

d) Since moratorium implies postponement of payment of interest and/or repayment of principal/installments, Financial Institutions would not force the loanees for repayment.

e) RBI vide circular RPCD.No.Plan.BC.92/ 04.09.01/ 2004-05 dated June 24,2004 had advised all scheduled commercial banks to implement an OTS Scheme for Small and Marginal Farmers. Moreover, RBI vide its circular RPCD.PLNFS.BC.No. 56/ 06.02.31/ 2005-06 dated December 27, 2005 had advised the scheduled commercial banks (including RRBs and Local Area Banks) to provide a simplified mechanism for one time settlement of loans where the principal amount is equal to or less than Rs.25,000/- and which have become doubtful and loss assets as on September 30, 2005. Copies of the above circulars are available on our website www.rbi.org.in under the title 'Notifications' at http://rbi.org.in/scripts/NotificationUser.aspx?Id=1724&Mode=0 and http://rbi.org.in/scripts/NotificationUser.aspx?Id=2667&Mode=0 respectively.

May 3, 2006

3
RIA 718/05-06
RPCD

What are RBI guidelines on Education Loan Scheme?

A "New Education Loan Scheme" was formulated by IBA in consultation with the Govt of India and circulated by RBI to all scheduled commercial banks vide circular RPCD.PLNFS.BC.83/06.12.05/2000-01 dated April 28, 2001 for implementation. The circular is available on our website www.rbi.org.in. The Scheme provides broad guidelines to the banks and implementing bank will have the discretion to make changes suiting to the convenience of students/parents etc.

June 21, 2006

4
RIA 718/05-06
RPCD

What are RBI guidelines on Education Loan Scheme?

A "New Education Loan Scheme" was formulated by IBA in consultation with the Govt of India and circulated by RBI to all scheduled commercial banks vide circular RPCD.PLNFS.BC.83/06.12.05/2000-01 dated April 28, 2001 for implementation. The circular is available on our website www.rbi.org.in. The Scheme provides broad guidelines to the banks and implementing bank will have the discretion to make changes suiting to the convenience of students/parents etc.

June 21, 2006

5
1800/08-09 RPCD

Whether the operation of all unlicensed DCCBs is within the meaning of the Banking Regulation Act, 1949 (AACS)

In terms of Section 22 of the Banking Regulation Act, 1949 (AACS) a co-operative society, which was carrying on business as cooperative bank at the commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965 and applied for license to the Reserve Bank before the expiry of three months from such commencement, can carry on banking business until it is granted a license or is, by a notice in writing, notified by the Reserve Bank that the license cannot be granted to it. All unlicensed DCCBs come under the above category and they are working within the meaning of the Banking Regulation Act, 1949 (AACS).

February 27, 2009.
6 5924/11-12 RPCD

What is the definition of Financial Inclusion?

What are its objectives?

What is the relation of Financial Inclusion and Financial Inclusion Plan?

Financial Inclusion can be defined as the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups in particular, at an affordable cost in a fair and transparent manner by regulated mainstream institutional players.

Our broad objective is to take banking to all excluded sections of the society, rural and urban. Our attention was specifically attracted to provide banking services to all the 6 lakh villages and meet their financial needs through basic financial products like savings, credit and remittance for obvious reasons. Though, the focus initially was to cover villages with population above 2000 by March 2012, banks have since drawn up their Board approved Financial Inclusion plans to put in place a roadmap for extending banking services in all villages in an integrated manner over a period of next 3 to 5 years.

With a view to increasing banking penetration and ensuring financial inclusion, domestic commercial banks, both in the public and private sectors, were advised to draw up Board-approved Financial Inclusion Plans (FIP) with a view to rolling them our over the next three years. The same were submitted to the Reserve Bank. Banks were advised to devise FIPs congruent with their business strategy and comparative advantage to make it an integral part of their corporate plans. These plans broadly include self-set targets in respect of rural brick and mortar branches opened; business correspondents (BC) employed; coverage of unbanked villages with population above 2000 as also other unbanked villages with population below 2000 through branches / BCs / other modes; no-frill accounts opened including through BC-ICT; Kisan Credit Cards (KCC) and General Credit Cards (GCC) issued; and other specific products designed by them to cater to the financially excluded segments. The implementation of these plans is being closely monitored by the Reserve Bank.

June 8, 2012
RIA 4913 RPCD

1. Request to send copies of rules and regulations given to banks of Gujarat State for the P.N.E.G.P. Scheme

The PMEGP Scheme was formulated by Government of India and circulated by Reserve Bank of India. vide its circular RPCD.PLNFS.BC.41/09.04.01/2008-2009 dated October 10, 2008, which is available on our website www.rbi.org.in.

April 11, 2014

2. Under P.M.E.G.P. what sorts of professionals are being given loan and advances? Kindly do needful to provide full information. Kindly provide complete information in detail about, if any order or condition has been issued by Indian Government to you in this regard.

The information is available in our circular RPCD.PLNFS.BC.41/09.04.01/2008-2009 dated October 10, 2008

Information pertaining to Human Resources and Personnel Management

90/2008-09

Total no of Officers with break-up of Grades(A to F)
Total no of Class III employees.
Total no of Class IV employees.

Actual Staff Strength as on June 30, 2008.
Sr.No

Class I

Actual Strength

1

Senior Officer in Gr.'F'

99

2

Senior Officer in Gr.'E'

231

3

Senior Officer in Gr.'D'

353

4

Officer in Gr.'C'

860

5

Officer in Gr.'B'

1427

6

Officer in Gr.'A'

5602

7

Treasurer in Gr.'C'

18

8

Dy.Treasurer in Gr.'B'

58

9

Asstt.Treasurer in Gr.'A'

245

 

Total

8893

 

Class III

 

10

Total in Class III

4987

 

Class IV

 

11

Total in Class IV

7346

August 20, 2008

Information pertaining to Department of Currency Management

RIA No

Information Sought

Reply given / Information provided

Date of Reply

3297/11-12 DCM

Arrangements for minting of coins and printing of notes and names and addresses of agencies [Mints / Note Presses] in India

(i) Arrangements for minting of coins is done through the following Mints of Government of India:

(a) India Government Mint Shahid Bhagat Singh Marg Fort, Mumbai 400023
(b) India Government Mint Alipore, Kolkata 600053
(c) India Government Mint D-2, Sector -1, P.O.Box No.78 Noida 201301
(d) India Government Mint IDA Phase, Cherapally (R.R.District) Hyderabad 500051

Arrangements for printing of notes is done through the following Currency Presses:

(a) Currency Note Press Nashik Road - 422101
(b) Bank Note Press Dewas 455001
(c) Bharatiya Reserve Bank Note Mudran Pvt. Ltd. Note Mudran Nagar Mysore 570003
(d) Bharatiya Reserve Bank Note Mudran Pvt. Ltd. Salboni - 721132

February 7, 2012

2886/11-12 DCM

Procedure & Terms of supply of new currency in various chests of banks

(i) As regards the procedure, allocation of notes and coins to Reserve Bank of India offices is made on the basis of indent placed to presses and mints. Offices of Reserve Bank of India arrange remittances to currency chests under their jurisdiction as per the periodical indents placed by the currency chests and stocks available with them as well as with the currency chest. Currency chest branches in turn supply notes and coins received from Reserve Bank of India offices to other branches linked to them. There are no terms and conditions.

January 13, 2012

RIA 2439/2007-08

What are the different forms and value of Rupee accepted as per Indian law?

When does an in-use rupee form become invalid or not acceptable? is there any Govt order that describes an invalid form of rupee?

Is a torn/damaged rupee note valid?

What damage will make rupee note invalid (eg complete torn apart note ,half torn note etc. ?

What are various options available for one to follow to make an invalid rupee note valid.

Bank note/ coins are legal tender in payment or on account as indicated below:

(i) Banknote of any denomination and coin of any denomination not lower than a rupee for any sum.

(ii) In case of a half rupee coin for any sum not exceeding 10 rupees.

(iii) In the case of any other coin for any sum not exceeding one rupee.

The Central Government may, by notification in the gazette, declare that with effect from such date as may be specified, any series of bank notes of any denomination shall cease to be legal tender. Further, no person shall of right be entitled to recover from the Government or the Reserve Bank of India, the value of any lost, stolen, mutilated or imperfect currency note of Government of India or banknote. The value of imperfect / mutilated note may be refunded as a matter of grace subject to conditions and limitations.

Soiled bank notes (i.e. notes which have become dirty and due to excessive use or double numbered banknote cut into two pieces but on which both the numbers are intact) can be exchanged for full value at Reserve Bank of India or any commercial bank branch.

The public can get value of mutilated notes (i.e. notes which are torn,disfigured, burnt, washed, eaten by white ants etc.) as a matter of grace, as laid down in the RBI Note Refund Rules 1975 (as amended up to 1980) after adjudication. Currently, provisions exist for payment of full, half or no value as far as bank notes of Rs.10 and above are concerned. As regards Re.1/-, Rs.2/-, and Rs.5/- notes, the tenderer can get either full or no value depending upon the condition of the note. Mutilated notes can be tendered at Reserve Bank of India Offices/designated bank branches. 

The following types of banknotes are not eligible for payment under RBI Note Refund Rules, 1975 (as amended up to 1980)

A banknote which is

  • less than half the area of the full note.
  • devoid of the major portion of the number on an undivided area i.e. the prefix and three digits or four digits of the number in banknotes up to and inclusive of Rs.5/- in respect of banknotes of Rs.10/- and above where this inadequacy is present at both the numbering panels.
  •  Cancelled by any office of Reserve Bank of India or against which the value has already been paid.
  •  found to be forged / counterfeit.
  • Deliberately cut or tampered, carrying extrinsic words or visible representation intended to convey or capable of conveying any message of a political character

    Notes can be exchanged / tendered for adjudication over the counters of Reserve Bank of India Offices/designated bank branches. Mutilated notes can be sent by post for adjudication to the nearest Issue Office of Reserve Bank of India.

July 25, 2008

2
RIA 135/
2007-08 DCM

Instructions given by RBI to banks regarding exchange of mutilated notes.

Information on instructions given to banks on exchange of mutilated notes is in our Master Circular- "Facility for exchange of Notes and Coins" available at http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=3671&Mode=0 on our website.

Aug 27, 2007

1
RIA 133/2007-08 DCM

Are 25 paise and 50 paise coins withdrawn from circulation?

The 25 paise and 50 paise coins are legal tender and are not withdrawn from circulation. They may be validly used/ accepted for all transactions. RBI has issued press release to that effect and has also issued instructions to banks to display at all branches, boards/notices for information of customers/ general public to the effect that all 25 and 50 paise coins continue to be valid/legal tender and may be used for transactions in the normal course.

Aug 22, 2007.

Information pertaining to Monetary Policy Department

2751/11-12 MPD

Presently, what is the yearly rate of interest / return on savings accounts in banks?

The Reserve Bank has deregulated the savings bank deposit interest rate with effect from October 25, 2011. Banks are now free to determine their savings bank deposit interest rate, subject to the following conditions:

(i) First, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs. 1 lakh, irrespective of the amount in the account within this limit

(ii) Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses. However, there should not be any discrimination from customer to customer on interest rates for similar amount of deposit.

December 28, 2011

2168/12-13 MPD

Factors leading to increasing and decreasing of interest rate?

The Reserve Bank deregulated the interest rates on advances above Rs.2 lakh effective October 18, 1994. Effective July 1, 2010, banks are free to determine interest rates on all rupee advances (irrespective of the amount) with the approval of their respective Boards, subject to condition that all rupee advances should be only at or above their Base Rates. Further, interest rates on term deposits were deregulated by the Reserve Bank effective October 22, 1997 and savings deposits effective October 25, 2011. In a deregulated environment, banks are, therefore, free to determine their interest rates both on deposits and advances based on their commercial judgment.

Banks determine their interest rates on loans by taking into consideration various factors such as cost of funds, operational expenses, minimum margin to cover regulatory requirements of provisioning and capital charge, profit margin, customer / product specific charges, risk premia, term premia, etc. The movement in the Reserve Bank’s repo rate (key policy rate for signaling the monetary policy stance) also guides banks in deciding their interest rates.

November 6, 2012

Information pertaining to Department of Economic & Policy Research

2203/ 2013-14 DEPR What happen if excess currency were printed?

As detailed in the “Frequently Asked Questions” link on the Reserve Bank of India website (http://www.rbi.org.in/scripts/ FAQView.aspx?Id=39), the Reserve Bank decides the volume and value of banknotes to be printed each year. The quantum of banknotes that needs to be printed, broadly depends on the requirement for meeting the demand for banknotes due to GDP growth, replacement of soiled banknotes, inflation and reserve stock requirements. This estimation is done with the help of statistical models/techniques.

The Government of India decides the quantity of coins to be minted on the basis of indents received from the Reserve Bank. Although coins of all denominations are issued by the government, they are put into circulation through the Reserve Bank. The Reserve Bank is the sole authority for issuing banknotes in India under Section 22 of the Reserve Bank of India Act, 1934. It also derives the role of currency management from the above act.

The currency operations are carried out through its 18 issue offices, one sub-office at Lucknow, a currency chest at Kochi and a wide net work of currency chests. These offices receive fresh banknotes from the banknote printing presses. The issue offices of the Reserve Bank send fresh banknote remittances to the designated branches of commercial banks. Once the bank notes are released into the banking system, they form a part of the currency in circulation, which is the liability of the Issue Department of the Reserve Bank.

Section 34 (l) of the RBI Act requires that all bank notes issued by the Reserve Bank since April 1, 1935 and the currency notes issued by the Government of India before the commencement of operations of the Reserve Bank, be part of the liabilities of the Issue Department which stood at `12,016.24 billion as on June 30, 2013, including notes in circulation of `12,016.16 billion (Table 1).

Table 1: Reserve Bank of Indi: Issue Department Balance Sheet as at 30th June 2013

(` thousands)

2011-12

LIABILITIES

2012-13

2011-12

ASSETS

2012-13

89,169

Notes held in the Banking Department

 80,169

 760,096,797

Gold Coin and Bullion:

 

(a) Held in India

674,316,432

11,034,645,327

Notes in Circulation

12,016,157,427

(b) Held outside India

     

10,261,966,851

Foreign Securities

11,329,100,584

11,034,734,496

Total Notes Issued

12,016,237,596

11,022,063,648

Total

12,003,417,016

     

2,206,548

Rupee Coin

2,356,280

     

10,464,300

Government of India Rupee Securities

10,464,300

     

Internal Bills of Exchange and other Commercial Paper

11,034,734,496

Total Liabilities

12,016,237,596

11,034,734,496

Total Assets

12,016,237,596

Source: Reserve Bank of India, Annual Report 2012-13

The eligible assets of the Issue Department for backing its currency liabilities consist of gold (coin and bullion), foreign securities, rupee coin, Government of India securities, internal bills of exchange and other commercial papers.

Though printing of money per-se is not inflationary, the injection of the same in to the banking system could lead to rise in prices. It may be mentioned in this context, presently the Reserve Bank does not directly monetise fiscal deficit by participating in government securities auctions (primary bond market).

The Reserve Bank however, could influence money supply by changing short-term interest rates (which impact currency demand) or by open market operations (by impacting funds available to the banking sector).

 

3117/11-12 DEPR

From where can I procure the History of Reserve Bank of India publication and what is its cost? Please mention full address and phone number of the person whom I can contact to procure the above said publication?

The Reserve Bank of India History 1935 – 1981 (3 volumes) is available at leading book stores in India. It can also be purchased by sending cheques / draft drawn in favour of Reserve Bank of India payable at Mumbai and sent to

Director
Division of Reports and Knowledge Disemination
Department of Economic and Policy Research
Reserve Bank of India, Amar Building
Sixth floor, P.M.Road, Fort, Mumbai 400 001.
Phone: 022-22603000 Extn: 4609
Click here to send email

The price of the three volume set is Rs. 3700/- (including postal charge).

January 3, 2012

4575/11-12 DEPR Please send the list of publications published by the Bank and also inform how to subscribe to the publications.

The list of major publications published by Department of Economic Policy Research is given below:

1. RBI Bulletin

2. Weekly Statistical Supplement (WSS)

3. Annual Report

4. Report on Trend and Progress of Banking In India

5. State Finances: A Study of Budgets

6. Report on Currency and Finance

7. Working Papers (published on RBI website only)

8. Occasional Papers

9. DRG Studies

Subscription process for the monthly RBI Bulletin and the Weekly Statistical Supplement is as follows:

  Single Issue One year Three Years
Monthly Bulletin in India      
(a) Inclusive of Postage Rs.300* Rs.2750 Rs.8000
(b) Concessional @Abroad Rs.240* Rs. 2400 Rs.7200
Inclusive of Courier Charges US$14 US$150 US$450
Weekly Statistical Supplement in India (inclusive of Postage) Rs.11 Rs.475 Rs.1425
Abroad (Inclusive of Postage - US$30 US$90

*The price of a single copy without postage for regular subscription is Rs. 260 and for concessional subscription is Rs.200.
@ Available for research students, full time teachers, academic institutions and public libraries in IndiaThe Reserve Bank of India Bulletin is also available on Internet at http://www.bulletin.rbi.org.in
Payments should be made by Demand Draft / Crossed Cheque / pay Order drawn in favour of Reserve Bank of India and payable at Mumbai only. The forwarding letter enclosing DD / Crossed Cheque / Pay Order should be addressed to:
The Director, Division of Reports and Knowledge Dissemination, Department of Economic and Policy Research, Reserve Bank of India, Amar Building, 6th Floor, P.M.Road, Fort, Mumbai 400 001. Ph: 022 22603000 Extn. 4609 Fax: 022 22632110

Click here to send email

March 26, 2012

RIA No  4650/ 2013-14

1. When we say that the current account deficit of India is for say x Billion, what exactly is the period that we are referring to. India’s current account deficit is compiled on quarterly basis capturing all the current account transactions of balance of payments which take place between resident and non-resident entities during a particular quarter. Period coverage is clearly indicated in the Press Release and Statements on the balance of payments (i.e., Annual, half yearly or quarterly).

March  04, 2014

2. Is it updated on daily basis or on monthly basis.

As mentioned under 1, CAD is compiled on a quarterly basis

Information pertaining to Department of Communication

3462/11-12 DOC

Detailed policy of the Reserve Bank of India for release of advertisements in Media

The Department of Communication [DoC] prepares a panel of approved advertising agencies for use by all the Regional Offices and Central Office Departments of the Reserve Bank of India. The Advertising Agencies have to meet a detailed eligibility criteria prescribed by the RBI for being considered for empanelment. Whenever an advertisement has to be inserted in the print / electronic media, the work is assigned to an empanelled advertisement agency on rotation basis. The agencies are required to execute the work assigned to them as per the time schedules prescribed by the RBI.

The work of releasing advertisements through the media is decentralized. Except for advertisements involving large budgets and creativity, which are coordinated by the DoC, the Central Office Departments of the RBI and the Regional Offices issue advertisements locally through one of the advertisement agencies on the approved panel.

The Indian Newspaper Society (INS) publishes rules for advertising in its Handbook of Press Publicity. The DoC circulates these rules to all the Central Office Departments and Regional Offices of the RBI for their information and use.

February 17, 2012

Department of Statistics and Information Management

5902/ 2012-13 DSIM

“Year - wise foreign exchange earned from medical tourists in India ( since 2002)”

Separate data on foreign exchange purchases by Authorised Dealer (AD) banks for the purpose of “Travel for medical treatment including TCs purchased by hospital” are collected by the Reserve Bank under Foreign Exchange Transaction Electronic Reporting System (FETERS) since April 1, 2012. The total receipt on account of the above purpose during April –Dec 2012 is as follows:

Table 1: Foreign exchange receipts on account of tourists travel to India for Medical Purpose

Period

Total Receipts (Rs. Million)

April – Dec 2012

1666

Source: Foreign Exchange Transactions Electronic Reporting System (FETERS), RBI

Note: Banks report the information on sale/purchase of foreign exchange by their Authorised Dealer (AD) branches to the Reserve Bank under the Foreign Exchange Transaction Electronic Reporting System (FETERS). The information collected relates to transaction date, purpose, amount, currency and country. The information is primarily used as input for compilation of balance of payment wherein the emphasis is given for the purpose and amount. For purposes like transportation, travel, insurance, software exports, private remittances, capital account transactions, the FETERS provides partial data and these are supplemented with data from various other sources. The detailed methodology for compilation of BoP statistics in India is provided in the Report of the Working Group on Balances of Payments Manual for India (Chairman: Shri Deepak Mohanty) – September 2010, which is available in public domain (RBI website: www.rbi.org.in -> Homepage -> Publications -> Reports)

June 18, 2013

2365/2012-13 DSIM

Number of all functioning banks in Urban areas of Raipur. Provide information / list of name and address of each bank branch.

The following information is attached:

i) Bank group-wise and bank-wise number of branches of scheduled commercial banks (SCBs) under different population groups in Raipur District, Chhattisgarh as on 31st October 2012; and

ii) Population group-wise list of branches of SCBs functioning in Raipur District, Chhattisgarh, with address and other details as on 31st October 2012.

Also, the updated information on bank-group and bank-wise list of branches of scheduled commercial banks (SCBs) functioning in India with all details viz., state, district name, etc. and their address, are available on the RBI website (www.dbie.rbi.org.in with the hyperlink ‘Branch Locator’).

November 16, 2012

Department of Banking Supervision

4698/ 2013-14

1. What is purpose of categorization of CA firms for Branch Statutory Audits of banks

The purpose of categorization of CA firms for Branch Statutory Audits of banks is to enable the banks to allot the branches to the extent possible, to the audit firms taking into consideration their category and audit experience in such a way that larger branches are audited by bigger/experienced audit firms.

March 11, 2014

2. What are the Ranges of Advances to particular category of CA firms for allotment of Branch Statutory Audits

 No range of advances to particular category of CA firms for allotment of Branch Statutory Audits has been prescribed by RBI.

3. What is Unique Code Number

Unique Code Number is allotted by the Institute of Chartered Accountants of India to audit firms.  Since The Institute of Chartered Accountants is a public authority as defined in section 2(h) of the Right to information Act 2005, you may consider approaching them for the required information.

4. What is the system to allot Unique Code Number

4753/ 2013-14

1. Why was the “no frills” account converted to the ‘Basic saving Bank Deposit Account’?
What is the system to allot Unique Code Number

The rationale for the conversion is spelt out in para 88 of Monetary Policy Statement of RBI for 2012-13 announced on 17.04.2012 which is as under:

“Financial inclusion has been high on the agenda of the Reserve Bank. With a view to providing fillip to this concept, banks were advised, in November 2005, to make available a basic banking ‘no-frills’ account with either ‘nil’ or very low minimum balance as well as charges that would make such accounts accessible to vast sections of the population. The nomenclature of the account in this manner has tended to signify that these accounts are opened more with a view to indicating achievement of numerical targets under the financial inclusion plans. On a review, it has been decided to modify the guidelines on opening of basic banking ‘no-frills’ accounts with a view to doing away with the stigma associated with the nomenclature and making the basic banking facilities available in a more uniform manner across the banking system. Accordingly, it is proposed that:

  • banks should offer a ‘basic savings bank deposit account’ with certain minimum common facilities and without the requirement of minimum balance to all their customers.”

March 11, 2014

 
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