REGULATING COMMERCIAL BANKING

Banks are fundamental to the nation's financial system. The central bank has a critical role to play in ensuring the safety and soundness of the banking system-and in maintaining financial stability and public confidence in this system.

Information pertaining to Commercial Banks


Sr. No. Query Reply
1 What is the meaning of KYC? When this concept was introduced in Banking Sector?

In terms of paragraph 1.1 of Master Circular DBOD.AML.BC.No.22/14.01.001/2014-15 dated July 1, 2014 on Know Your Customer (KYC) norms/ Anti-Money Laundering (AML) standards/ Combating of Financing of Terrorism (CFT)/ Obligation of banks under PMLA, 2002, the objective of KYC/ AML/ CFT guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities. KYC procedures also enable banks to know/ understand their customers and their financial dealings better which in turn help them manage their risks prudently.

The concept of KYC was introduced in the year 2002.

2 What are the documents required to open a savings bank account for an individual who is eligible to obtain the Aadhaar?

In terms of Section 15 (a) of our Master Direction on Know Your Customer (KYC), dated February 25, 2016, as amended on April 20, 2018, for undertaking Customer Due Diligence (identifying and verifying customers), Regulated Entities (REs), including banks, shall obtain the following information from an individual while establishing an account based relationship or while dealing with the individual who is a beneficial owner, authorised signatory or the power of attorney holder related to any legal entity:

a) From an individual who is eligible for enrolment of Aadhaar, the Aadhaar number; the Permanent Account Number (PAN) or Form No. 60 as defined in Income-tax Rules, 1962, as amended from time to time;

Provided, where an Aadhaar number has not been assigned to an individual, proof of application of enrolment for Aadhaar shall be obtained wherein the enrolment is not older than 6 months and in case PAN is not submitted, certified copy of an OVD containing details of identity and address and one recent photograph shall be obtained.

Further, in terms of Section 3 (a) (xiv) of the aforementioned Master Direction, “Officially Valid Document” (OVD) means the passport, the driving licence, the Voter's Identity Card issued by the Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government, letter issued by the National Population Register containing details of name and address.

It may be added that in terms of Section 15 (d) of the aforementioned Master Direction, RE, at the time of receipt of the Aadhaar number, shall carry out, with the explicit consent of the customer, e-KYC authentication (biometric or OTP based) or Yes/No authentication.

The revised Master Direction is in accordance with the changes carried out in the PML Rules vide Gazette Notification GSR 538 (E) dated June 1, 2017 and thereafter and is subject to the final judgment of the Hon’ble Supreme Court in the case of Justice K.S. Puttaswamy (Retd.) & Anr. V. Union of India, W.P. (Civil) 494/2012 etc. (Aadhaar cases).

The aforementioned amended Master Direction is available on our website www.rbi.org.in under the link ‘Notifications’.

3 The address on my Aadhaar card is not my current address. What are the instructions regarding current address for bank accounts?

In terms of Section 15 (c) of our Master Direction on Know Your Customer (KYC), dated February 25, 2016, as amended on April 20, 2018, in case the identity information relating to the Aadhaar number or Permanent Account Number submitted by the customer does not have current address, an OVD as defined in section 3 (a) (xiv) shall be obtained from the customer for this purpose.

Provided that in case the OVD furnished by the customer does not contain updated address, the following documents shall be deemed to be OVDs for the limited purpose of proof of address:-

  1. utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);

  2. property or Municipal tax receipt;

  3. pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;

  4. letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation;

Provided further that the customer shall submit Aadhaar or OVD updated with current address within a period of three months of submitting the above documents.

The revised Master Direction is in accordance with the changes carried out in the PML Rules vide Gazette Notification GSR 538 (E) dated June 1, 2017 and thereafter and is subject to the final judgment of the Hon’ble Supreme Court in the case of Justice K.S. Puttaswamy (Retd.) & Anr. V. Union of India, W.P. (Civil) 494/2012 etc. (Aadhaar cases).

The aforementioned amended Master Direction is available on our website www.rbi.org.in under the link ‘Notifications’.

4 The List of RBI Nominee Directors on the boards of nationalized banks and State Bank of India and their tenure.

In terms of Section 9(3)(c) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/80, and Section 19(f) of the State Bank of India Act, 1955, one director, possessing necessary expertise and experience in matters relating to regulation or supervision of commercial banks, to be nominated by the Central Government on the recommendation of the Reserve Bank on the boards of nationalized banks and State Bank of India, respectively. Government of India notifications effecting such nominations are available at http://financialservices.gov.in/notification

Further, the name of the Nominee Director on a particular public sector bank is also available on respective bank’s website.

5 Please inform whether RBI has appointed the Chairmen / Managing Directors of private sector as well as public sector banks in India. The names of Chairmen / Managing Directors of the banks may be furnished.

(i) In terms of extant statutory provisions and guidelines, the part-time Chairman, and Managing Director & CEOs of public sector banks are appointed by the Central Government after consultation with the Reserve Bank. Thereafter, Government of India notifies these appointments on the Official Gazette of India.

(ii) As regards the private sector banks, the banks are appointing their part-time Chairman, and Managing Director with the previous approval of the Reserve Bank. Thereafter, banks notify their appointments.

Further, these appointments do not require any notification to be issued by the Reserve Bank.

6 Information on
(1) opening of bank branches, (2) branch opened by bank (3) procedures of identifying a centre and opening of branch there (4) copy of permission/ licence given by RBI

In terms of the liberalized guidelines regarding opening of new branches issued vide circular DBR.No.BAPD.BC.69/ 22.01.001/2016-17 dated May 18, 2017, Domestic Scheduled Commercial Banks (other than Regional Rural Banks) are permitted to open, unless otherwise specifically restricted, Banking Outlets in Tier 1 to Tier 6 centres without having the need to take permission from Reserve Bank of India in each case.

Regarding Small Finance Banks (SFBs) and Payments Banks (PBs), kindly refer to Para No.6 of our above mentioned circular dated May 18, 2017 to be read with Para 4 of Licensing Guidelines for SFBs dated November 27, 2014 and Para 6 of Operating Guidelines for SFBs dated October 06, 2016 and Para 6 of Operating Guidelines for PBs dated October 06, 2016.

The above circular, Licensing Guidelines and Operating Guidelines are available on our web site www.rbi.org.in under “Notification” menu.

7 Information on
(1) leasing of premises for bank branches/ATMs (2) rental rates/ specifications approved by RBI (3) payment or non-payment of rentals and other disputes thereon (4) copy of lease rental agreement (5) identifying and acquiring/leasing of premises for opening a bank branch

In terms of Paras 10(i) and (ii) of Master Circular DBOD.No.BAPD.BC.7/22.01.001/2014-15 dated July 1, 2014 read with circular DBR.No.BAPD.BC.92/22.01.003/2014-15 dated April 30, 2015, all powers relating to hiring of premises, rentals, deposits/advances to premises owners, for acquisition of accommodation on lease/rental basis for their own use (i.e. for Office and Residence of Staff) have been delegated to banks. While acquiring premises for opening of a branch, banks should ensure that the location of the branch complies with the local norms/laws of Municipal Corporation /Nagar Palika /Town area authority / Village Panchayat or any other competent authority. Further, banks must ensure that their branches are not functioning from premises unauthorized in law.

The above mentioned circulars are available on our website www.rbi.org.in under “Notifications” link.

8 Information on
(1) engaging of Business Correspondents (BCs)/Bank Mitras by banks (2) terms of appointment/ retrenchment / renewal of appointment/ remuneration/commission rates, eligibility criteria, activities, etc. for BCs

In terms of Para 8 of Master Circular on Branch Authorization, DBOD.No.BAPD.BC.7/22.01.001/2014-15 dated July 01, 2014, with the objective of ensuring greater financial inclusion and increasing the outreach of the banking sector, scheduled commercial banks including Regional Rural Banks (RRBs) and Local Area Banks (LABs) have been permitted to use the services of intermediaries in providing financial and banking services through the use of Business Facilitator/ Business Correspondent (BC) Model. Banks may formulate a policy for engaging BC with the approval of their Board of Directors.

This Master circular is available on our web-site www.rbi.org.in by “Notification” link.

9 What is the provision for installing/opening of ATM? In terms of Para 8 of our circular DBR.No.BAPD.BC.69/22.01.001/2016-17 dated May 18, 2017 (read with para 4 of our Master Circular DBOD.No.BAPD.BC.7/22.01.001/2014-15 dated July 1, 2014 and also our circular DBR.NO.BAPD.BC.72/22.01.001/2015-16 dated January 14, 2016) banks are allowed to set up onsite/offsite Automated Teller Machines (ATMs) at centres/places identified by them, The above circulars are available on our official web site www.rbi.org.in under “Notification” menu.
10 Information related to security guards in ATMs It is informed that in terms of Para 8 of our circular DBR.No.BAPD.BC.69/22.01.001/2016-17 dated May 18, 2017, banks are permitted to post suitable staff member(s) to provide guidance to the customers using the services of these outlets. The above circular is available on our official web site www.rbi.org.in under “Notification” menu.
11 I have taken Credit Information Report (CIR) from Credit Information Companies (CICs) viz: TUCIBIL/Experian/Equifax/ CRIF HIGH Mark as the case may be. It is observed that there are many errors appearing in my Credit Information Report (CIR). Please rectify the same/How can I rectify the same?

Complaint Redressal does not come under the purview of RTI Act. We therefore, advise you to contact TUCIBIL/Experian/Equifax/ CRIF HIGH Mark as the case may be. The addresses are as under :

TransUnion CIBIL Limited
One Indiabulls, Tower 2A-2B,
Unit No 1901, 19th Floor,
Jupiter Mill Compound,
Senapati Bapat Marg,
Lower Parel,
Mumbai – 400 013
Tel: +91 - 22 - 6638 4600

Alternatively, you may raise your complaint by using the following link: https://www.cibil.com/complaints-escalation-procedure/

Experian Credit Information Company of India Private Limited
5th Floor,
East Wing,
Tower 3, Equinox Business Park,
LBS Marg, Kurla (West),
Mumbai -400070, India
T: +91 (0) 22 3017 6700

Alternatively, you may raise your complaint by using the following link:
http://www.experian.in/addressing-your-queries-disputes

Equifax Credit Information Services Private Limited,
Unit No. 931, 3rd floor, Building no. 9,
Solitaire Corporate Park,
Andheri Ghatkopar Link Road,
Andheri East,
Mumbai – 400093,
India.
T: 1-800-209-3247
Alternatively, you may raise your complaint by using the following link:
https://eport.equifax.co.in/eport/dispute.jsp

CRIF High Mark
3B-01,02 & 03, 3rd Floor,
Phoenix Paragon Plaza
CTS No. 124/B, 15, L.B.S Marg,
Kurla (West), Mumbai-400070
Maharashtra, India

Tel No - +91-22-71712900
Alternatively, you may raise your complaint by using the following link:
https://www.crifhighmark.com/support-desk/
Nodal Officer
Email Id: nodalofficer@crifhighmark.com

Tel. No.: +91-020-6715 7878 (Business Hours Mon- Fri 10:30 – 07:00)

12 What is the statute under which Credit Information Companies (CICs) including CIBIL (Credit Information Bureau Limited) are set up? RBI has, in exercise of powers conferred by section 5 of the Credit Information Companies (Regulations) Act 2005 (CICRA) and the Rules and Regulations framed there under the Act, granted Certificate of Registration to four Credit Information Companies (CICs).
13 What is the purpose of setting up credit bureaus in India? Please provide the names of credit bureaus that are currently approved by RBI and operating in India. Please give the date of issue of Certificate of Registration. Which are statutes under which CICs operate/function ?

Credit Bureaus have been set up mainly to address the information asymmetries between creditors and borrowers or potential borrowers in order to facilitate an effective and informed credit risk assessment. The credit reporting also helps in arresting accretion of fresh NPAs in the banking system through an efficient system of collection and dissemination of credit information on borrowers. RBI has granted Certificate of Registration to 4 Credit Information Companies (CICs) viz; 1)TransUnion CIBIL Limited 2) Equifax Credit Information Services Pvt. Ltd, 3) Experian Credit Information Co. of India Pvt. Ltd and 4) CRIF Highmark Credit Information Services Pvt. Ltd. The date of issue of COR is as follows:

TransUnion CIBIL Limited, date of CoR-March 5, 2012.
Equifax Credit Information Services Pvt. Ltd, date of CoR- March 26, 2010.
Experian Credit Information Co. of India Pvt. Ltd, date of CoR- February 17, 2010.
CRIF Highmark Credit Information Services Pvt. Ltd, date of CoR-November 25, 2010.
These operate under the framework of Credit Information Companies Regulation Act 2005 (CICRA), Credit Information Companies (CIC) Rules and Regulations, 2006.

14 What are the duties and responsibilities of the Credit Information companies (CICs) as set forth by the RBI? The duties and responsibilities CICs are mentioned at Section 17, 19, 20 and 22 of Credit Information Companies (Regulations) Act 2005 (CICRA), Credit Information Companies Rules 24, 25, 26, 28 and 29 and Regulation 7, 10.
15 Has RBI issued instructions to banks/FIs/NBFCs to access credit information reports for loan disbursals?

Reserve Bank of India, vide its circular DBOD.No.CID.BC.127/20.16.056/2013-14 dated June 27, 2014 advised banks and financial institutions that Banks/FIs should include in their credit appraisal processes/loan policies, suitable provisions for obtaining Credit Information Reports (CIR) from one or more Credit Information Companies (CICs) so that the credit decisions are based on information available in the system.

The information contained in the CIR (which contains credit score) would be one of the factors that banks would consider before granting any credit facility to a prospective borrower. However, it will be the commercial judgement of the concerned credit institution to grant loan or otherwise to such borrowers based on their Board approved policies.

16 What are the steps taken against wilful defaulters by RBI?

In terms of Master circular dated July 1, 2015, following instructions have been issued with regard to Wilful Defaulters.

I) Measures to be initiated by the banks and FIs against the wilful defaulters identified:

i). No additional facilities should be granted by any bank / FI to the listed wilful defaulters. In addition, such companies (including their entrepreneurs / promoters) where banks / FIs have identified siphoning / diversion of funds, misrepresentation, falsification of accounts and fraudulent transactions should be debarred from institutional finance from the scheduled commercial banks, Financial Institutions, NBFCs, for floating new ventures for a period of 5 years from the date of removal of their name from the list of wilful defaulters as published/disseminated by RBI/CICs.

ii) A covenant in the loan agreements, with the companies to which the banks / FIs have given funded / non-funded credit facility, should be incorporated by the banks / FIs to the effect that the borrowing company should not induct on its board a person whose name appears in the list of Wilful Defaulters and that in case, such a person is found to be on its board, it would take expeditious and effective steps for removal of the person from its board.

II) Criminal Action against Wilful Defaulters

It is essential that offences of breach of trust or cheating construed to have been committed in the case of loans should be clearly defined under the existing statutes governing the banks, providing for criminal action in all cases where the borrowers divert the funds with malafide intentions.

III) Monitoring of End Use

Banks / FIs should closely monitor the end-use of funds and obtain certificates from borrowers certifying that the funds are utilised for the purpose for which they were obtained. In case of wrong certification by the borrowers, banks / FIs may consider appropriate legal proceedings, including criminal action wherever necessary, against the borrowers.

IV) Criminal Action by Banks / FIs

It is essential to recognise that there is scope even under the existing legislations to initiate criminal action against wilful defaulters depending upon the facts and circumstances of the case under the provisions of Sections 403 and 415 of the Indian Penal Code (IPC) 1860. Banks / FIs are, therefore, advised to seriously and promptly consider initiating criminal action against wilful defaulters or wrong certification by borrowers, wherever considered necessary, based on the facts and circumstances of each case under the above provisions of the IPC to comply with our instructions and the recommendations of JPC.

17 Provide details of total NPA of wilful defaulters of Banks as on 31.03.2016

Requested Information is confidential in nature and is exempt from disclosure under section 45E of the Reserve Bank of India Act, 1934. Moreover, in a pending case, [(W.P. (C) No. 573 of 2003 (Centre for Public Interest Litigation v. Housing & Urban Development Corp. Ltd &Ors)] Reserve Bank has submitted to the Hon’ble Supreme Court a list of defaulters above Rs. 500/- crores in a sealed cover claiming that the said information is confidential and requesting that it may not be revealed to the public. The matter is still under the consideration of the Supreme Court. We are therefore unable to provide the requested information.

Further, the banks /Financial Institutions have been advised to submit the data regarding defaulting borrowers to Credit Information Companies (CICs) and not to RBI from December 2014 onwards.

18 Information about Deposit Education and Awareness Fund Scheme, 2014. In terms of the Depositor Education and Awareness Fund Scheme, 2014 (Scheme), the Reserve Bank has established a Fund, called the Depositor Education and Awareness Fund (Fund). As per the Scheme, the amount to the credit of any account in India with any bank which has not been operated upon for a period of ten years or any deposit or any amount remaining unclaimed for more than ten years shall be credited to the Fund. The Fund shall be utilized for promotion of depositors’ interest and for such other purposes which may be necessary for the promotion of depositors’ interests as specified by RBI from time to time. The depositor would, however, be entitled to claim from the bank his deposit or any other unclaimed amount or operate his account after the expiry of ten years, even after such amount has been transferred to the Fund. The bank would be liable to pay the amount to the depositor/claimant and claim refund of such amount from the Fund.
19 What are the interest rates as set by the Reserve Bank of India for various categories of loans? RBI has not issued any specific instructions prescribing the interest rates on advances including home loans since with effect from October 18, 1994, Reserve Bank of India had deregulated the interest rate on advances sanctioned by Scheduled Commercial Banks (excluding Regional Rural Banks) and these interest rates are determined by banks with the approval of their respective Board of Directors subject to regulatory guidelines on interest rate on advances contained in our Master Direction - Reserve Bank of India (Interest Rate on Advances) Directions, 2016 issued vide DBR.Dir.No.85/13.03.00/2015-16 dated March 3, 2016, which is available on our website www.rbi.org.in under the head ‘Notifications’.
20 What are the interest rate on term deposits of various maturities as per the RBI Guidelines? RBI has deregulated the interest rates on deposits and Scheduled Commercial Banks have been given the freedom to fix their own interest rates on domestic term deposits of various maturities duly approved by the Board of Directors subject to the instructions contained in our Master Direction on ‘Interest Rate on Deposits’ issued vide DBR.Dir. No.84/13.03.00/2015-16 dated March 3, 2016, which is available on our website www.rbi.org.in under the head ‘Notifications’.
21 Whether there is any provision in the bank for giving more interest on the money deposited by senior citizen?

In terms of Section 8 (b) of Master Direction on ‘Interest Rate on Deposits’ issued vide DBR.Dir.No.84/13.03.00/2015-16 dated March 3, 2016, Scheduled Commercial Banks shall, at their discretion, formulate term deposit schemes specifically for resident Indian senior citizens, offering higher and fixed rates of interest as compared to normal deposits of any size.

The above Master Direction is available on our website www.rbi.org.in under the head ‘Notifications’.

22 What is the eligibility criteria and documents required to get a loan from a public or private bank? What are the RBI guidelines for availing loan from a bank?

RBI has not issued any instructions in this regard since the management of loan sanctioning/ recovery activity in a bank is essentially an internal management function and each bank’s Board is authorized to frame suitable policies. Banks have been advised to prepare a well-defined loan policy approved by their Board of Directors subject to the instructions contained in our Master Circular on “Loans and Advances – Statutory and Other Restrictions” issued vide DBR.No.Dir.BC.10/13.03.00/2015-16 dated July 1, 2015, which is available on our website www.rbi.org.in under the head ‘Notifications’.

Further, banks have been advised to consider exposure limits to individual/ group borrowers, documentation standards, margin, security, sectoral exposure limits, delegation of powers, maturity and pricing policies, factors taken into consideration for deciding interest rates etc., while sanctioning advances.

23 Has RBI prescribed the charges for the various services provided by banks? Scheduled Commercial Banks (excluding Regional Rural Banks) have been given the freedom to fix service charges on various types of service rendered by them, as per their Board approved policy subject to the general instructions on levy of charges contained in paragraph 6 of Master Circular on ‘Customer Service in Banks’ issued vide DBR.No.Leg.BC.21/ 09.07.006/2015-16 dated July 1, 2015, which is available on our website www.rbi.org.in under the head ‘Notifications’.
24 Does the bank have the right to levy foreclosure charges/ pre-payment penalty on the individual borrowers?

Scheduled Commercial Banks (excluding Regional Rural Banks) have the freedom to fix charges, as per their Board approved policy subject to general instructions regarding levy of charges by banks contained in paragraph 6 of our Master Circular on ‘Customer Service in Banks’ issued vide DBR.No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015, which is available on our website www.rbi.org.in under the head ‘Notifications’.

However, banks are not permitted to charge foreclosure charges / pre-payment penalties on all floating rate term loans sanctioned to individual borrowers. These instructions are consolidated in paragraph 6.4 of Master Circular referred to above.

25 What is the definition of ‘individual’ as applicable to RBI instructions? The term ‘Individual’ has been defined as a natural person, in Section 3 (a) (ix) of our Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 issued vide DBR.Dir.No.84/13.03.00/2015-16 dated March 3, 2016, which is available on our website www.rbi.org.in under the head ‘Notifications’.
26 Most of the banks ask their customers to maintain some amount as Minimum balance/ Average Minimum Balance. Please provide the instructions issued by RBI in this regard.

RBI has not issued any specific instructions prescribing the amount of minimum balance to be maintained in savings bank account since banks have the freedom to determine the quantum of minimum balance to be maintained by their depositors in savings bank account subject to conditions that:

i) At the time of opening savings bank accounts, banks should inform their customers in a transparent manner the requirement of maintaining minimum balance.

ii) Banks should inform, at least one month in advance, the existing account holders of any change in the prescribed minimum balance.

The above instructions are contained in paragraph 5.4 of Master Circular on ‘Customer Service in Banks’ issued vide DBR.No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015, which is available on our website www.rbi.org.in under the head ‘Notifications’.

27 As per the RBI rules, whether banks are supposed to deduct the charges for Non maintenance of minimum balance from Account holder. If yes, please provide a copy of the rules.

Levy of penalty by banks on non-maintenance of minimum balance in savings account is subject to following:

i) In the event of a default in maintenance of minimum balance as agreed to between the bank and customer, the bank should notify the customer clearly by SMS / email / letter etc. that in the event of the minimum balance not being restored in the account within a month from the date of notice, penal charges will be applicable.

ii) In case the minimum balance is not restored within a reasonable period, which shall not be less than one month from the date of notice of shortfall, penal charges may be recovered under intimation to the account holder.

The above instructions are contained in paragraph 5.4 of Master Circular on ‘Customer Service in Banks’ issued vide DBR.No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015, which is available on our website www.rbi.org.in under the head ‘Notifications’.

28 What are charges for SMS alert facility?

With effect from November 26, 2013, banks have been advised to leverage the technology available with them and the telecom service providers to ensure that such charges are levied on all customers on actual usage basis.

The above instructions are contained in paragraph 6.7 of Master Circular on ‘Customer Service in Banks’ issued vide DBR.No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015, which is available on our website www.rbi.org.in under the head ‘Notifications’.

29 Can I withdraw my fixed deposit prematurely?

In terms of our extant instructions contained in Section 7 (a) of our Master Direction on ‘Interest Rate on Deposits’ issued vide DBR.Dir.No.84/13.03.00/2015-16 dated March 3, 2016, banks shall have the freedom to offer term deposits without premature withdrawal option provided that all term deposits accepted from individuals (held singly or jointly) for amount of Rupees fifteen lakh and below shall have premature-withdrawal-facility.

The above Master Direction is available on our website www.rbi.org.in under the head ‘Notifications’.

30 What all entities are eligible to open a Savings Bank Account?

We have not issued any specific instructions for opening saving bank accounts. However, in terms of instructions contained in our Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 issued vide DBR.Dir.No.84/13.03.00/2015-16 dated March 3, 2016 Scheduled Commercial Banks shall not open a savings deposit account in the name of entities other than individuals, Karta of HUF and organisations/agencies listed below:

(1) Primary Co-operative Credit Society which is being financed by the bank.
(2) Khadi and Village Industries Boards.
(3) Agriculture Produce Market Committees.
(4) Societies registered under the Societies Registration Act, 1860 or any other corresponding law in force in a State or a Union Territory except societies registered under the State Co-operative Societies Acts and specific state enactment creating Land Mortgage Banks.
(5) Companies licensed by the Central Government under Section 8 of Companies Act, 2013 or Section 25 of Companies Act, 1956 or under the corresponding provision in the Indian Companies Act, 1913 and permitted, not to add to their names the words ‘Limited’ or the words ‘Private Limited’.
(6) Institutions other than those mentioned in section 26(h) and whose entire income is exempt from payment of Income-tax under the Income-Tax Act, 1961.
(7) Government departments / bodies / agencies in respect of grants/ subsidies released for implementation of various programmes / Schemes sponsored by Central Government / State Governments subject to production of an authorization from the respective Central / State Government departments to open savings bank account.
(8) Development of Women and Children in Rural Areas (DWCRA).
(9) Self-help Groups (SHGs), registered or unregistered, which are engaged in promoting savings habits among their members.
(10) Farmers’ Clubs – Vikas Volunteer Vahini – VVV.

The above circular is available on our website www.rbi.org.in under the head ‘Notifications’.

31 What is the rate of interest to which a depositor is entitled for such intervening periods after date of maturity till the date of renewal? If a Term Deposit matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings deposits as per the instructions contained in para 9 (b) of our Master Direction on ‘Interest Rate on Deposits’ issued vide DBR.Dir.No.84/13.03.00/2015-16 dated March 3, 2016, which is available on our website www.rbi.org.in under the head ‘Notifications’.
32 Whether there is any provision which allows bank to give more interest on the money deposited by its own employees? Scheduled Commercial Banks shall, at their discretion, allow additional interest of one per cent per annum, over and above the rate of interest mentioned in the schedule of interest rates on savings or term deposits of bank’s employees and former employees subject to the regulatory guidelines issued by RBI contained in Section 8 of our Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 issued vide DBR.Dir.No.84/13.03.00/2015-16 dated March 3, 2016 which is available on our website www.rbi.org.in under the head ‘Notifications’.
33 What is the penal rate of interest prescribed by RBI? Banks shall formulate a Board approved policy for charging penal interest on advances which shall be fair and transparent. The rate of penal interest shall be decided after taking into account incentive to service the debt and due regard to genuine difficulties of customers. The above instructions are contained in Section 5 of our Master Direction - Reserve Bank of India (Interest Rate on Advances) Directions, 2016 issued vide DBR.Dir.No.85/13.03.00/2015-16 dated March 3, 2016, which is available on our website www.rbi.org.in under the head ‘Notifications’.
34 How is the Savings Bank account interest calculated? Interest on domestic rupee savings deposits shall be calculated on a daily product basis as per the instructions contained in Section 6 (a) of our Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 issued vide DBR.Dir.No.84/13.03.00/2015-16 dated March 3, 2016 which is available on our website www.rbi.org.in under the head ‘Notifications’.
35 What is the procedure of the disbursal of a housing loan?

Banks have been advised that disbursal of housing loans sanctioned to individuals should be closely linked to the stages of construction of the housing project / houses and upfront disbursal should not be made in cases of incomplete / under-construction / green field housing projects. However, in cases of projects sponsored by Government/Statutory Authorities, banks may disburse the loans as per the payment stages prescribed by such authorities, even where payments sought from house buyers are not linked to the stages of constructions, provided such authorities have no past history of non-completion of projects. These instructions are contained in paragraph 3 (f) and 3 (g) of our Master Circular on “Housing Finance” issued vide DBR.No.Dir.BC.13/08.12.001/2015-16 dated July 1, 2015, which is available on our website www.rbi.org.in under the head ‘Notifications’.

The instructions regarding Housing Finance by banks are consolidated in the above-mentioned circular. In addition, the LTV ratios and risk weights for individual housing loans have been revised in terms of circular DBR.BP.BC.No. 44/08.12.015/2015-16 dated October 8, 2015 on ‘Individual Housing Loans: Rationalisation of Risk-Weights and LTV Ratios’ which is available on our website www.rbi.org.in under the head ‘Notifications’

36 What are the current guidelines for the issue of a Bank Guarantee? The regulatory guidelines issued by RBI are contained in our Master Circular – ‘Guarantees and Co-acceptances’ issued vide DBR.No.Dir.BC.11/13.03.00/2015-16 dated July 1, 2015 which is available on our website www.rbi.org.in under the head ‘Notifications’.
37 Whether guidelines are issued by RBI to Housing Finance Companies (HFCs)? No. NHB regulates and issues guidelines to HFCs.
38 Whether the Banking Regulation Act, 1949 is applicable to AIFIs? No. AlFIs are regulated by RBI in terms of powers conferred by Section 45L of RBI Act, 1934. The activities of AIFIs are mainly governed by their respective statutes.
39 Name of the Regulatory body regulating Financial Institutions. RBI, DBR, FID regulates four All India Financial Institutions (AIFIs), viz. Small Industries Development Bank of India (SIDBI), National Housing Bank (NHB), Export-Import Bank of India (EXIM Bank) and National Bank for Agriculture and Rural Development (NABARD).
40 Name of the Regulatory body regulating State Finance Corporations? SIDBI is the regulator of State Finance Corporations (SFCs).
41 Total number of All India Financial Institutions (AIFIs).
In India and Sector wise

At present, RBI, Department of Banking Regulation (DBR) regulates four All India Financial Institutions, viz. National Bank for Agriculture and Rural Development (NABARD), Export Import Bank of India (EXIM Bank), Small Industries Development Bank of India (SIDBI), National Housing Bank (NHB). Further, Industrial Investment Bank of India (IIBI) Ltd., which was also being regulated by RBI, DBR has been under the process of Voluntary Winding up since September 2012.

Small Industries Development Bank of India (SIDBI) is the principal financial institution which caters to the MSME Sector.

National Bank for Agriculture and Rural Development (NABARD) is a financial institution for agriculture and rural credit.

National Housing Bank (NHB) deals with housing finance sector.

Export Import Bank of India (EXIM Bank) caters to credit needs of export/import sectors.

42 Name and Date of Establishment of the All India Financial Institutions (AIFIs).
Name of AIFI Date of Establishment
National Bank for Agriculture and Rural Development (NABARD)- July 12, 1982
Export Import Bank of India (EXIM Bank) January 1, 1982
Small Industries Development Bank of India (SIDBI) March 7, 1990
National Housing Bank (NHB) July 9, 1988
43 Is it mandatory to take insurance while availing any loan product from a bank?

In terms of Section 18(d)(v) of our Master Direction on Financial Services provided by Banks dated May 26, 2016(Updated as on September 25, 2017), the following is prescribed:-

“(v) The bank shall not follow any restrictive practices of forcing a customer to either opt for products of a specific insurance company or link sale of such products to any banking product. It shall be prominently stated in all publicity material distributed by the bank that the purchase by a bank’s customer of any insurance products is purely voluntary, and is not linked to availment of any other facility from the bank.

The above mentioned master direction is available on our official website https://www.rbi.org.in under the ‘Notifications’ tab.

44 If bank staff force customer to purchase insurance products and/or threaten to deny the loan then what should be course of action/grievance redressal mechanism. In case of grievance against particular bank, a complaint may be lodged with the branch of concerned bank or its controlling office. If the complaint is not redressed within 30 days, then a fresh complaint can be made to Banking Ombudsman, under the Banking Ombudsman Scheme, 2006. The details of the Banking Ombudsman Scheme are available on RBI’s website www.rbi.org.in.
45 Whether the ATM card gives an insurance cover to the account holder in case of accidental death? Department of Banking Regulation has not issued any specific instructions in this regard and hence, do not have the requisite information.
46 What are the measures taken by RBI to control credit card frauds?

The relevant guidelines on “Fraud control – security and other measures” are issued under para I(14) of Master Circular dated July 1, 2015 on “Credit Card, Debit Card and Rupee Denominated Co-branded Pre-paid Card Operations of Banks and Credit Card issuing NBFCs”.

The circular is available on our official website https://www.rbi.org.in under the ‘Notifications’ tab.

47 What are the guidelines on interest rate and other charges pertain to credit card?

The relevant guidelines on “Interest rates and other charges” issued under para I (5) of Master Circular dated July 1, 2015 on “Credit Card, Debit Card and Rupee Denominated Co-branded Pre-paid Card Operations of Banks and Credit Card issuing NBFCs”.

The above cited circular is available on website www.rbi.org.in under “Notifications” tab.

48 Is bank staff are allowed to sell insurance products in branches? What are the guidelines issued in this regard?

In terms of para 18 of Master Direction on “Financial Services provided by Banks” dated May 26, 2016 (Updated as on September 25, 2017), banks can undertake departmentally agency of business of insurance products subject to conditions inter-alia includes:

• Banks which are acting as corporate agents for insurance companies should have a Board approved policy mentioning issues of customer appropriateness, suitability and grievance redressal.

• Banks should treat its customers fairly, honestly and transparently, with regard to suitability and appropriateness of the insurance products sold.

• Banks are also restricted from forcing customers to opt for products of a specific insurance company or link sale of such products to any banking product.

• Banks should have a robust internal grievance redressal mechanism to resolve issues related to services offered.

• Banks should ensure that performance assessment and incentive structure for staff is not violative of Section 10(1) (ii) of the BR Act, 1949 or the guidelines issued by IRDA in payment of commissions/brokerage/incentives. Also it has to be ensured that no incentive (cash or non-cash) is paid to the staff engaged in insurance broking/corporate agency services by the insurance company.

The above cited Master Direction is available on our website www.rbi.org.in under the tab “Notifications”.

49 Name and Number of nominated banks permitted by RBI to import gold for this financial year The list of nominated banks permitted by RBI to import gold is available at :
https://rbi.org.in/commonman/english/Scripts/Content.aspx?id=336
50 List of Foreign Banks which are permitted by RBI to do banking services in India with their addresses.

The list of foreign banks operating in India (as branches and Representative offices), is available at:
https://www.rbi.org.in/commonman/Upload/English/Content/PDFs/71207.pdf

The correspondence addresses of foreign banks carrying on banking business in India are available at:
https://rbi.org.in/commonman/english/scripts/banksinindia.aspx

51 What is RBI`s policy regarding safety of lockers in banks? The applicant may refer to para 18.2 on 'Security aspects relating to Safe Deposit Lockers’ of our Master Circular DBR.No.Leg.BC.21/09.07.006/ 2015-16 dated July 1, 2015 on ‘Customer Service in Banks’ which is available on our website www.rbi.org.in under the link ‘Notifications’.
52 Please provide RBI guidelines on fair practice code.

RBI, Department of Banking Regulation has issued following circulars to banks:-
DBOD.Leg.No.BC.104/09.07.007/2002-03 dated May 5, 2003 on ‘Guidelines on Fair Practices Code for Lenders’.
DBOD.No.Leg.BC.65/09.07.005/2006-07 dated March 6, 2007 on ‘Guidelines on Fair Practices Code for Lenders’.
DBOD.No.Leg.BC.28/09.07.005/2007-08 dated August 22, 2007 on ‘Guidelines on Fair Practices Code for Lenders- Furnishing Copy of Loan Agreement’.

(iv) DBOD.No.Leg.BC.86/09.07.005/2008-09 dated November 25, 2008 on ‘Guidelines on Fair Practices Code for Lenders- Disclosing all information relating to Processing Fees / Charges’.

(v) DBOD.Leg.No.BC.61/09.07.005/2010-11 dated November 12, 2010 on ‘Guidelines on Fair Practices Code for Lenders- Disclosing all information relating to processing fees / charges’.

(the aforementioned circulars are available on our website www.rbi.org.in under the link ‘Notifications’)

In this regard, you may also refer to our instructions to banks issued vide circular DBR.Leg.No.BC.64/09.07.005/2014-15 dated January 22, 2015 on ‘Display of Information by Banks’.

53 Please provide RBI guidelines to banks on collecting information from customers for cross-selling purposes The applicant may refer to para 25.1 on ‘Collecting Information from customers for cross-selling purposes’ of our Master Circular DBR No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015 on ‘Customer Service in Banks’ which is available on our website www.rbi.org.in under the link ‘Notifications’.
54 What are RBI guidelines regarding banking hours, extended business hours and extended business hours for non-cash banking transactions? The applicant may refer to paragraphs 7.2, 7.3 and 7.4 on ‘Changes in banking hours’, ‘Commencement/Extension of working hours’ and ‘Extended business hours for non-cash banking transactions’ respectively of our Master Circular DBR.No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015. on ‘Customer Service in Banks’ which is available on our website www.rbi.org.in under the link ‘Notifications’.
55 What are RBI guidelines on liability of customers and banks in an unauthorized electronic banking transaction? The applicant may refer to our circular DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 6, 2017 on ‘Customer Protection - Limiting Liability of Customers in Unauthorized Electronic Banking Transactions’ which is available on our website www.rbi.org.in under the link ‘Notifications’.
56 Please provide Policy Guidelines in respect of Senior citizen and differently abled person with key instructions to banks to facilitate such account holders in their legitimate banking transaction to ensure inclusive growth of the society RBI, Department of Banking Regulation has issued necessary instructions to banks vide its circular DBR.No.Leg.BC.96/09.07.005/2017-18 dated November 9, 2017 on ‘Statement on Developmental and Regulatory Policies - October 4, 2017- Banking Facility for Senior Citizens and Differently abled Persons’. In this regard, the applicant may also refer to paragraphs 1.1, 9, 10 and 11 of our Master Circular DBR.No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015 on “Customer Service in Banks” which is available on our website www.rbi.org.in under the link ‘Notifications’.
57 What are the latest guidelines of RBI on entries in Passbook and Statement of Accounts? The applicant may refer to our instructions issued vide circular DBR.No.Leg.BC.76/09.07.005/16-17 dated June 22, 2017 on “Recording of Details of Transactions in Passbook/ Statement of Account” and para 5.6.5 on ‘Providing monthly statement of accounts’ of our Master Circular DBR.No.Leg.BC.21/09.07.006/2015-16 on ‘Customer Service in Banks’ dated July 1, 2015. The circulars are available on our website www.rbi.org.in under the link ‘Notifications’.
58 If a customer has any grievance/complaint against a bank/branch then what shall be the course of action? In case of grievance against a specific bank, you may lodge a complaint with the concerned bank branch. If you are not satisfied with their reply, you may lodge a complaint with Nodal Officers / Principal Nodal Officers at Controlling Office / Head Office of the bank branch, appointed under the Banking Ombudsman Scheme, 2006, for redressal of complaints. If your complaint is not redressed within one month, a complaint can be made to Banking Ombudsman, under the Banking Ombudsman Scheme, 2006. The details of the Banking Ombudsman Scheme are available on RBI’s website www.rbi.org.in. The name and contact details of the Nodal Officers of the banks are available in their respective official website. You may also refer to RBI Press Release, 2014-2015/2374 - RBI advises Banks to appoint Internal Ombudsman (issued to Public Sector Banks, and some Private Sector and Foreign Banks) dated May 11, 2015 (available on our website www.rbi.org.in under the link ‘Press Releases’), wherein we have advised all public sector banks and some private sector and foreign banks to appoint an internal ombudsman. The bank's internal ombudsman will be a forum available to bank customers for grievance redressal before they can even approach the Banking Ombudsman.
59 Information about Regional Rural Banks (RRBs)

There are 56 Regional Rural Banks (RRBs) in the country. All the RRBs are included in the second schedule to RBI Act, 1934.

The list of all RRBs can be accessed by RBI website using the following path:
www.rbi.org.in>> Home>>Consumer Education & Protection>>For common person>>useful information >>Financial agents>>Banks in India

60 Whether any bank can obtain revival letter/acknowledgement of debt after the loan account become NPA? Any circular/notification of RBI regarding the above matter may be also furnished.

Reserve Bank of India has not issued any specific instructions in this regard. However, RBI’s guidelines on asset classification and income recognition contained in the Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2015, are prudential in nature and pertain to various aspects of asset classification and recognition of interest income on NPAs in banks’ profit and loss account and these guidelines do not obviate the liability of the borrower in any manner.

The above-mentioned circular is available on website www.rbi.org.in under the link ‘Notifications’.

61 Define the meaning of NPA with rule provision to ascertain its nature.

DBR instructions on classification of an account as non-performing asset (NPA) are contained in paras 2 and 4.2 of the Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2015.

This circular is available at website www.rbi.org.in under the link ‘Notifications’.

62

Provide the steps would follow to recover the amount from NPA account.

Provide the steps for process for recovery of NPA loan account

As per circular DBOD.NO.BP.BC.81/21.01.040/95 dated July 21, 1995, each bank is required to have a loan recovery policy which sets down the manner of recovery of dues, targeted level of reduction (period-wise), norms for permitted sacrifice/waiver, factors to be taken into account before considering waivers, decision levels, reporting to higher authorities and monitoring of write-off/waiver cases.
63 I want to know that in the matter of working capital assessment, is there any guidelines/rules requiring banks to re-assess/appraise the working capital of the borrower each year.

In terms of para 4.2.4 (ii) of the Master Circular on ‘Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances’, regular and ad hoc credit limits need to be reviewed/ regularised not later than three months from the due date/date of ad hoc sanction. In case of constraints such as non-­availability of financial statements and other data from the borrowers, the branch should furnish evidence to show that renewal/ review of credit limits is already on and would be completed soon. In any case, delay beyond six months is not considered desirable as a general discipline.

The aforesaid Master Circular is available on website www.rbi.org.in under the link ‘Notifications’.

64 List of All Nationalized Banks in India. The list of Public Sector Banks functioning in India is available in public domain on website
https://rbi.org.in/commonman/english/scripts/banksinindia.aspx
65 List of Private Sector Banks which are permitted by RBI to do banking services in India with their correspondence address available at RBI records. The list of Private Sector Banks issued licence under Section 22(1) of Banking Regulation Act. 1949 to do Banking Business in India, is available at :
https://rbi.org.in/commonman/english/scripts/banksinindia.aspx
66

(i) Whether a private sector bank / banks and branches are under the control of RBI?

(ii) What are the conditions on which these banks have to function?

Private Sector Banks are issued license by RBI under Section 22(1) of BR Act, 1949. Private Sector Banks in India are governed by the provisions of Banking Regulation Act, 1949, Reserve Bank of India Act, 1934, other relevant statutes and directions, instructions and guidelines issued by RBI from time to time.
67 What are the guidelines and documents that are required for opening of a Universal Bank in the Private Sector? Applications for new banks can be submitted to RBI under the Guidelines for ‘on tap’ Licensing of Universal Banks in the Private Sector, dated August 1, 2016, as issued by RBI vide press release 2016-2017/281. The same can be accessed through the web link
https://rbidocs.rbi.org.in/rdocs/Content/PDFs/GOTL01082016BB321081EF5A45A489080187CA4CA690.PDF
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