Inquisitive Mind

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 joined Project Nexus. What is Project Nexus? Project Nexus, conceptualised by the Innovation Hub of the Bank for International Settlements (BIS), is a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic Fast Payment Systems (FPSs) / Instant Payment Systems (IPSs).  Who are part of Project Nexus? Project Nexus aims to connect the FPSs / IPSs of 4 ASEAN countries (Malaysia, Philippines, Singapore, and Thailand); and India, who would be the founding members and first mover countries of this platform. An agreement to this effect was signed by the BIS and the central banks of the founding countries i.e., Bank Negara Malaysia (BNM), Bank of Thailand (BOT), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and Reserve Bank of India (RBI) on June 30, 2024, in Basel, Switzerland.  Indonesia, which has been involved from the early stages, continues to be involved as a specia...

Reserve Bank of India (RBI) has reset the half-yearly interest rate for Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T). Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T) Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T) are the bonds issued by the Government of India with effect from July 01, 2020. Sellers and investors of FRSB 2020 (T) FRSB 2020 (T) are sold through ‘Receiving Offices’ such as State Bank of India, Nationalised Banks, four private sector banks and any other entity as authorised by RBI. FRSB 2020 (T) can be held by – A person resident in India – in individual / joint capacity or on behalf of a minor Hindu Undivided Family (HUF) Subscribing to FRSB 2020 (T) FRSB 2020 (T) are issued at face value of ₹100/-. The minimum investment in FRSB 2020 (T) shall be ₹1,000/- and thereafter in multiples of ₹1,000/-. There is no maximum limit for investment in FRSB 2020 (T). Tenor of FRSB 2020 (T) FRSB 2020 (T) are repayable on expiry of 7 years from t...