Inquisitive Mind

The bi-monthly monetary policy of Reserve Bank of India (RBI) was announced on September 30, 2022. Here are some of the highlights of the monetary policy announcement. Rates and reserves   Change Revised ra te Policy repo rate Increase by 50 basis points 5.90% Standing deposit facility (SDF) rate 5.65% Marginal standing facility (MSF) rate 6.15% Bank rate 6.15% India’s foreign exchange reserves (as on September 23, 2022)   US$ 537.5 billion Monetary policy stance Withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. Economy    GDP growth projection CPI inflation projection FY 2022-23 7.0% 6.7% Q2 of FY 2022-23 6.3% 7.1% Q3 of FY 2022-23 4.6% 6.5% ...

Achieving complete financial inclusion is one of the important goals of the nations and central banks across the world. But how do we measure the extent to which the population of the country is financially included? Well, there is an index in India for this. What is Financial Inclusion (FI) Index? The composite Financial Inclusion (FI) Index was constructed by Reserve Bank of India (RBI) in August 2021, to capture the extent of financial inclusion across the country. FI-Index has been conceptualised as a comprehensive index incorporating details of banking, investments, insurance, postal as well as the pension sector in consultation with Government and respective sectoral regulators.   What are the parameters of FI-index? The FI-index comprises of three broad parameters (comprising of 97 indicators) with different weights assigned to each parameter. Ease of Access (35%) Availability and usage of services (45%) Quality of services (20%) The 'Quality' parameters captures the qua...

On account of the rise in digital lending platforms, ‘Guidelines on Digital Lending’ were introduced for regulation of this segment. What is digital lending? Digital Lending refers to a remote and automated lending process, largely by use of seamless digital technologies for customer acquisition, credit assessment, loan approval, disbursement, recovery, and associated customer service. Digital Lending Apps / platforms (DLAs) include apps of the Regulated Entities (REs) as well as the apps of Lending Service Providers (LSPs) engaged by REs as agents for extending any credit facilitation services. What is the basis of the Guidelines on Digital Lending? The guidelines on digital lending are based on the recommendations of the Working Group on ‘digital lending including lending through online platforms and mobile apps’ (Chairman: Jayant Kumar Dash). Which REs are covered by the Guidelines? The guidelines are applicable to digital lending extended by following REs – All Commercial Banks Pri...

On a day-to-day basis, we use the banknotes of different denominations for various financial transactions. But we rarely flip the notes to see the designs (motifs) on its back. What are the motifs on different banknotes? Following is the list of motifs on different denominations of Mahatma Gandhi (New) Series banknotes. Denomination of currency note Motif 10 Sun Temple, Konark 20 Ellora Caves 50 Hampi with Chariot 100 Rani ki vav 200 Sanchi Stupa 500 Red Fort 2000 Mangalyaan References Reserve Bank of India. (n.d.). 'Know Your Banknotes'. Retrieved from https://rbikehtahai.rbi.org.in/know-your-banknotes.html Follow at -  Telegram     Instagram     LinkedIn     Twitter

To promote innovations in the financial technology (fintech), Reserve Bank of India (RBI) had introduced Regulatory Sandbox (RS). What is Regulatory Sandbox (RS)? Regulatory Sandbox (RS) refers to live testing of new products / services in controlled / test regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of testing. The objective of RS is to foster responsible innovation in financial services, promote efficiency and bring benefit to consumers. Which financial products / services can be tested under RS? The proposed financial service to be launched under RS should be new / emerging technology or use of existing technology in innovative way and should address a problem and bring benefit to customers. Who can apply under RS? Fintech companies (including start-ups), banks, financial institutions, company, partnership firms, Limited Liability Partnerships (LLPs) can apply for entry to RS. The entity shall have a mini...

Recently, Reserve Bank of India (RBI) has brought new updates to the Mobile Aided Note Identifier (MANI) App. What is Mobile Aided Note Identifier (MANI) App? The Mobile Aided Note Identifier (MANI) App was launched by RBI on January 01, 2020. It is a mobile application for aiding visually impaired persons to identify the denomination of Indian Banknotes. What are the features of MANI App? Capable of identifying the denominations of Mahatma Gandhi Series and Mahatma Gandhi (New) series banknote by checking front or reverse side / part of the note including half folded notes at various holding angles and broad range of light conditions (normal light / day light / low light / etc.). Ability to identify the denomination through audio notification in Hindi / English and non-sonic mode such as vibration (suitable for those with vision and hearing impairment). After installation works in offline mode. Ability to navigate the mobile application via voice controls for accessing the application...

Received a torn / cut note from a shopkeeper / vegetable vendor and unable to use it for further transactions? Kids tore off the note in multiple pieces? Note accidently got burnt, losing a portion of the note? Found pieces of notes from old stuff? Do such notes have any value? Where can we exchange such notes? What are Note Refund Rules (NRR)? What are Note Refund Rules (NRR)? In terms of Section 28 read with Section 58(2) of Reserve Bank of India (RBI) Act, 1934, a person is not entitled to recover the value of any lost, stolen, mutilated or imperfect currency note / banknote from the Government of India / RBI as a right. However, RBI may prescribe the circumstances in, and the conditions and limitations subject to which, the value of such currency notes / banknotes may be refunded as a matter of grace. Accordingly, the Note Refund Rules have been prescribed by RBI for exchange of mutilated / defective notes.  As per Rule 2(j) of RBI (Note Refund) Rules, 2009 [as Amended by RBI (...

We have heard about some banks being placed under Prompt Corrective Action (PCA) framework by Reserve Bank of India (RBI). Similar guidelines have also been introduced for Non-Banking Financial Companies (NBFCs) which will be applicable from October 01, 2022. What is this PCA framework? And what does it mean for NBFCs placed under PCA? What is Prompt Corrective Action (PCA) framework? Prompt Corrective Action (PCA) framework enables detection of deteriorating financial health of an NBFC and requires the NBFC to initiate and implement remedial measures for its timely restoration.  From when will PCA framework be applicable to NBFCs? The PCA framework for NBFCs will come into effect from October 1, 2022, based on the financial position of NBFCs on / after March 31, 2022. The framework will be reviewed after 3 years of being in operation. To which NBFCs is PCA framework applicable? The PCA framework is applicable to the following categories of NBFCs – All Deposit Taking NBFCs [Excludi...