Inquisitive Mind

Reserve Bank of India (RBI) has revised the guidelines on bank finance against shares and debentures and small value loans  by Primary (Urban) Co-operative Banks (UCBs). What are the guidelines on bank finance to stock brokers? Primary (Urban) Co-operative Banks (UCBs) are prohibited from extending any fund based or non fund based credit facilities, whether secured or unsecured, to stockbrokers against shares and debentures / bonds, or other securities, such as fixed deposits, LIC policies etc. UCBs are not permitted to extend any facility to commodity brokers, including issue of guarantees on their behalf. What are the guidelines on bank finance to individuals against shares and debentures? Advances against units of mutual funds can be extended only to individuals. Loans against the primary / collateral security of shares / debentures can be extended only to individuals and should be limited to ₹5 lakh if the security is in physical form and up to ₹10 lakh if the security is in de...

Reserve Bank of India (RBI) has issued Prompt Corrective Action (PCA) framework for Primary (Urban) Co-operative Banks (UCBs). What is Prompt Corrective Action (PCA) framework? Prompt Corrective Action (PCA) framework enables supervisory intervention at an appropriate time and requires the Primary (Urban) Co-operative Banks (UCBs) to initiate and implement remedial measures in a timely manner, to restore their financial health.  To which UCBs is the PCA framework applicable? The PCA framework shall be applicable to all UCBs under Tier 2, Tier 3 and Tier 4 categories except UCBs under All Inclusive Directions (AID).  The PCA framework will replace the existing Supervisory Action Framework (SAF) and will be effective from April 01, 2025. How are UCBs categorized? UCBs have been categorized into – Tier 1 - All unit UCBs and salary earners’ UCBs (irrespective of deposit size), and all other UCBs having deposits up to ₹100 crore Tier 2 - UCBs with deposits more than ₹100 crore and ...

Reserve Bank of India (RBI) has reviewed the guidelines on domestic money transfer. What was the rationale behind the relaxation in guidelines on domestic money transfer? A large number of people, particularly the migrant population, did not have access to formal banking channels for want of proof of identity / address. Consequently, they faced difficulties in using the authorized channels for transferring funds. Therefore, the guidelines on domestic money transfer were relaxed to facilitate fund transfers of small values using formal banking channels. What relaxations were given in the domestic money transfers?   Nature of transaction Limit Other guidelines (revised) Cash Pay-out Customers transfer funds from their bank accounts for delivery in cash to the recipients (not having bank accounts) at an ATM or through Business Correspondent (BC) ₹10,000 per transaction with a cap of ₹25,000 per beneficiary per month ...

Reserve Bank of India (RBI) has issued directions on fraud risk management in Commercial Banks [including Regional Rural Banks (RRBs)], All India Financial Institutions (AIFI), Urban Cooperative Banks (UCBs), State Cooperative Banks (StCBs), Central Cooperative Banks (CCBs) and Non-Banking Financial Companies (NBFCs) [including Housing Finance Companies (HFCs)]. What is the purpose of the directions? The directions are issued with a view to providing a framework to Commercial Banks, AIFI, Cooperative Banks and applicable NBFCs for prevention, early detection and timely reporting of incidents of fraud to Law Enforcement Agencies (LEAs), Reserve Bank of India (RBI), National Bank for Agriculture and Rural Development (NABARD) and National Housing Bank (NHB) and dissemination of information by RBI and matters connected therewith or incidental thereto. To whom are the directions applicable? The directions are applicable to – Banks Cooperative Banks Applicable NBFCs ...

Reserve Bank of India (RBI) has issued draft regulation of foreign trade under Foreign Exchange Management Act (FEMA), 1999. Who is Authorised Dealer? Authorised Dealer (AD) means a person authorised as an authorised dealer under Section 10(1) of Foreign Exchange Management Act (FEMA), 1999, and includes a person carrying on business as a factor and authorised as such under the said Section 10. What are the draft guidelines for declaration of exports? Every exporter shall submit Export Declaration Form (EDF) specifying the amount representing the full export value of the goods or services. The exporter shall submit to the AD bank the documents pertaining to export, within 21 calendar days from the date of shipment in case of goods or from the date of invoice in case of services. AD bank may accept the documents after the expiry of the said period subject to directions issued by RBI. What are the draft guidelines on receipt of payment for export of goods and services? Receipt of payment...