Inquisitive Mind

Reserve Bank of India (RBI) has issued directions on Government securities lending. Which transactions will be covered under the directions? The directions shall be applicable to all Government securities lending transactions, undertaken in Over-the-Counter (OTC) markets. What is Government Securities Lending (GSL) transaction? Government Securities Lending (GSL) transaction refers to dealing in Government securities involving lending of eligible Government securities, for a fee, by the owner of those securities (the lender) to a borrower, on the collateral of other Government securities, for a specified period of time, with an agreement that the borrower shall return to the lender the security borrowed and the latter shall return the security received as collateral to the former at the end of the agreed period. Government Security Lending Fee (GSL Fee) means the fee paid by the borrower to the lender of the Government security as mutually agreed between them for undertaking the transa...

Reserve Bank of India (RBI) has updated guidelines on Payments Infrastructure Development Fund (PIDF). What is Payments Infrastructure Development Fund (PIDF)? The Payments Infrastructure Development Fund (PIDF) Scheme, operationalised by Reserve Bank of India (RBI) from January 01, 2021, subsidies and encourages deployment of acceptance infrastructure in the country. What is the basis of creating PIDF? In May 2019, the High-Level Committee on Deepening of Digital Payments (Chairman: Shri Nandan Nilekani, former Chairman, UIDAI) set up by RBI, had recommended setting up of an 'Acceptance Development Fund 'to be used for improving acquiring infrastructure at Tier IV, V and VI areas which will ensure optimum utilisation of millions of cards issued to customers, resulting in increased digitisation in these deficit centres. Accordingly, RBI had created PIDF on January 01, 2021 for a period of 3 years. What is the validity period of PIDF? The validity period of PIDF is 5 years from ...

Reserve Bank of India (RBI) has issued revised instructions on inoperative accounts / unclaimed deposits in the banks. What is inoperative account and unclaimed deposit? Inoperative account – A savings / current account shall be treated as inoperative, if there are no ‘customer induced transactions’ in the account for a period of over 2 years. Unclaimed deposit – The credit balance in any deposit account maintained with banks, which have not been operated upon for 10 years or more, or any amount remaining unclaimed for 10 years or more. What are financial and non-financial transactions? Financial transaction – A monetary transaction in the savings / current account of the customer with the bank either by way of a credit or debit transaction. Non-financial transaction – An enquiry or request for any product / service initiated by the account holder through any ATM / internet banking / mobile banking application of the bank or through Third Party Application Providers, or successful ...

Reserve Bank of India (RBI) had issued instructions on certain aspects of corporate governance in banks. To whom are the instructions applicable? The instructions are applicable to – Private Sector Banks including Small Finance Banks (SFBs) and Payment Banks (PBs) Wholly owned subsidiaries of Foreign Banks In respect of State Bank of India and Nationalised Banks, the guidelines are applicable to the extent they are not inconsistent with provisions of specific statutes applicable to these banks or instructions issued under the statutes.  The instructions are not applicable to foreign banks operating as branches in India.  What are the instructions on Chair and meetings of the Board? The Chair of the board shall be an independent director.  In the absence of the Chair of the board, the meetings of the board shall be chaired by an independent director.  The quorum for the board meetings shall be 1/3rd of the total strength of the board or 3 directors, whichever is highe...

Reserve Bank of India (RBI) has updated the guidelines on acceptance of bulk deposits by banks. What are bulk deposits?  “Bulk Deposit” means single Rupee term deposits of  – Deposit Banks ₹3 crore (earlier ₹2 crore) and above Scheduled Commercial Banks [excluding Regional Rural Banks (RRBs)] Small Finance Banks ₹1 crore (earlier ₹15 lakh) and above Regional Rural Banks (RRBs) Local Area Banks Scheduled Primary (Urban) Co-operative Banks (UCBs) in Tier 3 & 4 ₹15 lakh and above Other UCBs What are the revised guidelines on pre-mature withdrawal option? Commercial 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 ₹1 crore (earlier ₹15 lakh) and below shall have premature-withdrawal-facility. Co-operative Banks shall have the freedom to offer term deposits without prem...

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...