Inquisitive Mind

Reserve Bank of India (RBI) has issued guidelines for import of gold and silver. Who can import gold and silver in India? The following entities are permitted to import gold under specific ITC(HS) Codes through India International Bullion Exchange IFSC Ltd. (IIBX) – Nominated agencies as notified by Reserve Bank of India (RBI) (in case of banks). Nominated agencies as notified by Directorate General of Foreign Trade (DGFT). Qualified Jewellers (QJ) as notified by International Financial Services Centers Authority (IFSCA). The list of QJs is available at https://www.ifsca.gov.in/Directory/index/%20BeofL9D7gY= . Valid Tariff Rate Quota (TRQ) holders under the India-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA) as notified by the IFSCA. Further, Qualified Jewellers (QJ) as notified by IFSCA are also permitted to import silver under specific ITC(HS) Codes through IIBX. (Updated on February 04, 2024) What are the conditions for import of gold and silver? Res...

Reserve Bank of India (RBI) has issued guidelines for opening / shifting / closure of place of business by District Central Co-operative Banks (DCCBs). What is the pre-condition for opening / shifting place of business by DCCBs? Pursuant to the amendment to the Banking Regulation Act dated September 29, 2020, District Central Co-operative Banks (DCCBs) are permitted to open new place of business / install ATMs or shift the location of such offices only after obtaining prior approval of Reserve Bank of India (RBI).  What is the criteria for opening / shifting / upgrading the place of business by DCCBs? The criteria for opening of branches / extension counters / specialized branches / regional offices / zonal offices / administrative offices / shifting of branches / upgradation of extension counters into full-fledged branches by a DCCB are as follows - A licensed DCCB should have completed at least 3 years of operation. CRAR at least 9%. No default in maintenance of CRR / SLR du...

Reserve Bank of India (RBI) has made addition to the specified securities under Fully Accessible Route (FAR). What is Fully Accessible Route (FAR)? An announcement was made in the Union Budget 2020-21 that certain specified categories of Central Government securities would be opened fully for non-resident investors without any restrictions, apart from being available to domestic investors as well.  Accordingly, Reserve Bank of India (RBI) had introduced a separate route viz., Fully Accessible Route (FAR) for investment by non-residents in securities issued by the Government of India. Who are eligible investors under FAR? Eligible investors shall mean any “person resident outside India” as defined in Foreign Exchange Management Act, 1999. Which are specified securities under FAR? Specified securities include - Government securities of 5-year and 10-year tenors from the financial year 2020-21. Government securities of 7-year tenors (w.e.f. July 07, 2022). Sovereign Green Bonds ...

Reserve Bank of India (RBI) has updated the directions for non-banking financial companies undertaking the business of account aggregator. Who is Account Aggregator (AA)? “Account Aggregator” means a non-banking financial company (NBFC) as notified under section 45-I of Reserve Bank of India (RBI) Act, 1934, that undertakes the business of an account aggregator, for a fee or otherwise. “Business of an account aggregator” means the business of providing under a contract, the service of -  Retrieving or collecting financial information pertaining to its customer and; Consolidating, organizing and presenting such information to the customer or any other financial information user. In simple words, the financial information providers share the financial information of a customer with an Account Aggregator for transferring it to the customer or a financial information user. What is financial information? “Financial Information” means information in respect of the following with financia...

Reserve Bank of India (RBI) has taken regulatory measures towards credit exposures of banks and non-banking financial companies (NBFCs). What is the rationale behind the regulatory measures? The high growth in consumer credit and increasing dependency of non-banking financial companies (NBFCs) on bank borrowings may build-up risk in the portfolios of the banks and NBFCs. In view of this, Reserve Bank of India (RBI) has issued revised guidelines for certain credit exposures of banks and NBFCs. What are the revised guidelines? Previous Instructions Revised Instructions Consumer credit exposure of commercial banks attract a risk weight of 100%. The risk weights in respect of consumer credit exposure of commercial banks (outstanding as well as new), including personal loans, but excluding housing loans, education loans, vehicle loans and loans secured by gold and gold jewellery, has been increased to 125%. NBFCs’ loan exposures generally att...

Reserve Bank of India (RBI) has issued guidelines for regulation of payment aggregators facilitating cross-border payment transactions for import and export of goods and services. Who are Payment Aggregators? Payment Aggregators (PAs) are entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers for completion of their payment obligations without the need for merchants to create a separate payment integration system of their own. PAs facilitate merchants to connect with acquirers. In the process, they receive payments from customers, pool and transfer them on to the merchants after a time period. Who are Payment Aggregator – Cross Border (PA-CB)? Payment Aggregator – Cross Border (PA-CB) are entities that facilitate cross-border payment transactions for import and export of permissible goods and services in online mode. Who is authorised to operate as PA-CB? AD Category-I Banks AD Category-I banks do not require separate approv...

Reserve Bank of India (RBI) has released a comprehensive framework for strengthening and improving the efficacy of the grievance redress mechanism and customer service provided by the Credit Institutions (CIs) and Credit Information Companies (CICs). What are Credit Institutions (CIs)? C redit Institutions (CIs) are the entities which undertake credit (lending) related activities and include - Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks, and excluding Payments Banks) Primary (Urban) Co-operative Banks / State Co-operative Banks / Central Co-operative Banks Non-Banking Financial Companies (including Housing Finance Companies) All-India Financial Institutions (Exim Bank, NABARD, NHB, SIDBI and NaBFID) Asset Reconstructions Companies What are Credit Information Companies (CICs)? Credit Information Companies (CICs) are the entities that collect, maintain and analyse the credit information of companies and individuals.  Presently, the ...