reserve bank of india

Latest Ownership Guidelines & Corporate Structure for Indian Private Sector Banks- RBI

Fema / RBI - The Report of the Internal Working Group set up to Review extant Ownership Guidelines and Corporate Structure for Indian Private Sector Banks by Reserve Bank of India dated October 26, 2020, by four members team was submitted. As the name indicates this epoch-making event unlocks the mysteries of floating a private sector bank and the [&h...

Read More

K V Kamath Committee Report – Decoding

Fema / RBI - Loan Restructuring Scheme For COVID-19 Hit Stressed Borrowers. Synopsis : COVID -19 left a destructive mark on the World Economy including India, so the Government of India along with the Ministry of Finance & Reserve Bank Of India announced several Stimulus Shots to revive the Indian economy, so the Governor of RBI , Sri Sakthikantha...

Read More

Dormant Bank Account or Inoperative Bank Account

Fema / RBI - Now-a-days many people receive mail from their banks stating that their bank account will become Inoperative/ Dormant for non-operation of Saving as well as Current Account? Many people got confused or stressed because of such mails, hence today I am writing this article to help my readers to understand and face this issue confidently....

Read More

Revised Core Investment Companies (CIC) Guidelines – August 2020

Fema / RBI - The RBI Committee was formed under former Corporate Affairs Secretary, Mr. Tapan Ray to suggest a new regulatory and supervisory framework in light of the bust up of IL&FS in 2018. IL&FS was declared insolvent in September 2018 after it failed to honour its debt which was distributed among its 347 group companies. The complex [&he...

Read More

RBI: Governor’s Statement – October 9, 2020 with green offshoots

Fema / RBI - The newly appointed Monetary Policy Committee (MPC) of Reserve Bank of India with Dr. Ashima Goyal, Professor Jayanth R. Varma, and Dr. Shashanka Bhide, as external members met on 7th, 8th, and 9th October 2020 in its first meeting and the 25th under the monetary policy framework that was instituted in June 2016. “The MPC […]...

Read More

Gold Card Scheme for Creditworthy Exporters

Fema / RBI - Gold Card Scheme for Creditworthy Exporters Exports play a crucial role in a developing economy like India which attaches considerable importance to export promotion. As a part of the overall strategy of export promotion measures, the Reserve Bank of India has taken various steps to ensure expeditious and timely provision of financial ass...

Read More

No Current Account In Banks for CC/OD Customers?

Fema / RBI - RBI on August 06, 2020, barred banks from opening current accounts for customers who have availed cash credit or overdraft facilities from any bank. RBI has taken this measure with a view to improve credit discipline. In a notification, the central bank said that rather than opening a new current account, all transactions should be [&hell...

Read More

Indian Economy at a Crossroad: A view from Financial Stability Angle

Fema / RBI - he outbreak of COVID-19 pandemic is unambiguously the worst health and economic crisis in the last 100 years during peace time with unprecedented negative consequences for output, jobs and well-being. It has dented the existing world order, global value chains, labour and capital movements across globe and needless to say, the socio-econo...

Read More

RBI extends FLA 2020 due date to 31st July 2020

Fema / RBI - Submission of annual return on FLA through the web-based FLAIR portal for financial year 2019-20 has been started. Entities which are filing FLA return for the first time/ with revised UIN (Unique identification number) are required to register themselves first for generating login credentials and they can file FLA return. However, the en...

Read More

Highlights of RBI Governor’s announcements dated 22.05.2020

Fema / RBI - RBI extends the three-month moratorium The loan moratorium will be extended till August 31 2020. This makes it a six month moratorium Lending institutions are being permitted to restore the margins for working capital to the origin level by March 31, 2021...

Read More

SC refuses to interfere with period of validity of cheque

In re Cognizance for Extension of Limitation (Supreme Court) - In re Cognizance for Extension of Limitation (Supreme Court) With reference to the prayer, that the period of validity of a cheque be extended, we find that the said  period has  not  been  prescribed by  any Statute but  it  is  a  period  prescribed by the Reserve Bank of India under Sec...

Read More

Covid-19: HC restrains bank from taking coercive action for default in factoring facility

Eastman Auto & Power Limited Vs RBI (Delhi High Court) - The object of issuing notifications/circulars dated 27.03.2020 and 17.04.2020 was to provide financial relief in repayment due to COVID-19 to the parties who have availed the term loans and working capital facilities but this relief is not extended towards factoring facilities....

Read More

RBI’s circular directing bank to take recourse to IBC is ultra vires to section 35AA

Dharani Sugars And Chemicals Ltd. Vs Union of India & Ors. (Supreme Court of India) - Hon'ble Supreme Court held that RBI Circular directing bank to take recourse to Insolvency and Bankruptcy Code (IBC)  is ultra vires to Section 35AA of the Banking Regulation Act....

Read More

No advocate / chartered accountants can represent willful defaulter

Revati Cements Pvt. Ltd & Anr. Vs State Bank of India & Ors. (Madhya Pradesh HC) - Assessee-company being a ‘willful defaulter’ could not be represented through the lawyers or Chartered Accountants as the personal hearing was available only to borrower Director and Promoter of the alleged default unit....

Read More

Unrealised loss on outstanding interest rate swaps would be allowable as business deduction

J P Morgan Chase Bank Vs. ADIT (ITAT Mumbai) - This decision is relevant to assessees following RBI guidelines for accounting for interest rates swaps. Companies which are claiming unrealised loss on outstanding interest rate swaps at the year end would find this ruling useful. While this ruling ...

Read More

RBI places Lakshmi Vilas Bank under Moratorium

Press Release: 2020-2021/645, Notification No. S.O. 4127(E), Order No. DOR/PSBD.No.1406/16.01.067/2020-21 - (17/11/2020) - Reserve Bank of India Date : Nov 17, 2020 The Lakshmi Vilas Bank Ltd. placed under Moratorium The financial position of The Lakshmi Vilas Bank Ltd. (the bank) has undergone a steady decline with the bank incurring continuous losses over the last three years, eroding its net-worth. In absence of any ...

Read More

Ratios which banks must consider for finalizing resolution plan of eligible borrowers

Circular No. RBI/2020-21/34 DOR.No.BP.BC/13/21.04.048/2020-21 and Press Release: 2020-2021/298 - (07/09/2020) - All lending institutions shall mandatorily consider the following key ratios while finalizing the resolution plans in respect of eligible borrowers under Part B of the Annex to the Resolution Framework:...

Read More

RBI releases Financial Stability Report, July 2020- Highlights

Press Release: 2020-2021/96 - (24/07/2020) - Reserve Bank released the 21st Issue of the Financial Stability Report (FSR), which reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, and the resilience of the financial system in the context of contempo...

Read More

Banking Regulation (Amendment) Bill, 2020

Bill No. 56 of 2020 - (03/03/2020) - Government introduces Banking Regulation (Amendment) Bill, 2020 in Lok Sabha to bring the co-operative banks on par with the developments in the banking sector through better management and proper regulation of co-operative banks with a view to ensure that the affairs of the co-operative banks are c...

Read More

Statement by Governor- Sixth Bi-monthly Monetary Policy Statement, 2019-20

Press Releases No. 2019-2020/1891 and 1890 - (06/02/2020) - Reserve Bank of India Statement by Governor – Sixth Bi-monthly Monetary Policy Statement, 2019-20, February 6, 2020 Over the last three days, i.e., during 4th, 5th and 6th February, 2020 the Monetary Policy Committee (MPC) met and assessed current and evolving macroeconomic and financial condi...

Read More

Recent Posts in "reserve bank of india"

Latest Ownership Guidelines & Corporate Structure for Indian Private Sector Banks- RBI

The Report of the Internal Working Group set up to Review extant Ownership Guidelines and Corporate Structure for Indian Private Sector Banks by Reserve Bank of India dated October 26, 2020, by four members team was submitted. As the name indicates this epoch-making event unlocks the mysteries of floating a private sector bank and the [&h...

Read More
Posted Under: Fema / RBI |

RBI places Lakshmi Vilas Bank under Moratorium

Press Release: 2020-2021/645, Notification No. S.O. 4127(E), Order No. DOR/PSBD.No.1406/16.01.067/2020-21 (17/11/2020)

Reserve Bank of India Date : Nov 17, 2020 The Lakshmi Vilas Bank Ltd. placed under Moratorium The financial position of The Lakshmi Vilas Bank Ltd. (the bank) has undergone a steady decline with the bank incurring continuous losses over the last three years, eroding its net-worth. In absence of any viable strategic plan, declining [&helli...

Read More

K V Kamath Committee Report – Decoding

Loan Restructuring Scheme For COVID-19 Hit Stressed Borrowers. Synopsis : COVID -19 left a destructive mark on the World Economy including India, so the Government of India along with the Ministry of Finance & Reserve Bank Of India announced several Stimulus Shots to revive the Indian economy, so the Governor of RBI , Sri Sakthikantha...

Read More
Posted Under: Fema / RBI |

Dormant Bank Account or Inoperative Bank Account

Now-a-days many people receive mail from their banks stating that their bank account will become Inoperative/ Dormant for non-operation of Saving as well as Current Account? Many people got confused or stressed because of such mails, hence today I am writing this article to help my readers to understand and face this issue confidently....

Read More
Posted Under: Fema / RBI |

Revised Core Investment Companies (CIC) Guidelines – August 2020

The RBI Committee was formed under former Corporate Affairs Secretary, Mr. Tapan Ray to suggest a new regulatory and supervisory framework in light of the bust up of IL&FS in 2018. IL&FS was declared insolvent in September 2018 after it failed to honour its debt which was distributed among its 347 group companies. The complex [&he...

Read More
Posted Under: Fema / RBI |

RBI: Governor’s Statement – October 9, 2020 with green offshoots

The newly appointed Monetary Policy Committee (MPC) of Reserve Bank of India with Dr. Ashima Goyal, Professor Jayanth R. Varma, and Dr. Shashanka Bhide, as external members met on 7th, 8th, and 9th October 2020 in its first meeting and the 25th under the monetary policy framework that was instituted in June 2016. “The MPC […]...

Read More
Posted Under: Fema / RBI |

RBI: ‘Technology Vision for Cyber Security’ for Urban Co-op Banks- 2020-2023

Reserve Bank of India in tune with its policy to prepare Urban Co-operative Banks (UCB) for meeting the challenges of modern technological ways of extension of banking through Urban Co-operative banks issued a detailed communication dated 24th September 2020 titled ‘Technology vision for cybersecurity for urban co-operative banks...

Read More
Posted Under: Fema / RBI |

RBI: Inflation forecast combinations – The Indian experience

On 24th September 2020,  the Reserve Bank of India placed on its website a Working Paper titled ‘Inflation Forecast Combinations – The Indian Experience’ under the Reserve Bank of India Working Paper Series. The Paper has been authored by Joice John, Sanjay Singh, and Muneesh Kapur, from RBI though the views expressed were ...

Read More
Posted Under: Fema / RBI |

Farmers’ suicides vis-à-vis Rural Banking in India

We are a society with set and preferred precedents. We meet a small boy and ask him what he wants to become when he grows up. We show admiration for him if he says Doctor, Engineer, Scientist, Pilot, IAS or IPS. We say – wow! What a choice! We meet a small girl and ask […]...

Read More
Posted Under: Fema / RBI |

Regulatory Landscape – Setting Up of Business of Payment Aggregators in India

The regulatory landscape has undergone a significant change with the introduction of Guidelines on Regulation of Payment Aggregators and Payment Gateways  (DPSS.CO.PD.No.1810/02.14.008/2019-20 dated March 17, 2020).  The guidelines propose for stricter regulation on the activities of payment activities and payment gateways in India.  T...

Read More
Posted Under: Fema / RBI |

RBI: Role of COO –Discussion on compliance function in banks

RBI: Role of Chief Compliance Officer (COO)–Discussion on compliance function in banks Reserve Bank of India vides its communication dated September 11, 2020, informed that in order to have an effective compliance culture, independent corporate compliance function, and a strong compliance risk management program at the bank and group le...

Read More
Posted Under: Fema / RBI |

Adhoc SMS charges levied by banks & its appropriateness

Adhoc Monthly/Quarterly SMS charges and GST on it levied by banks on Cores of banking accounts and its appropriateness Upon reading the title of the write-up you may think that the subject matter is very simple and insignificant. Probably, the reader may also think that there is no need to write such a lengthy article-up. […]...

Read More
Posted Under: Fema / RBI |

Inadequate regulatory oversight by financial market regulators resulting in regulated entities practising random ways to generate extra revenue

Inadequate regulatory oversight by financial market regulators resulting in regulated entities practising random ways to generate extra revenue In anxiety to improve the earnings under ‘miscellaneous income category,’ many business entities in the financial sector are looking at various opportunities and do mischievous things. I am fo...

Read More
Posted Under: Fema / RBI |

RBI ask banks to automate Income recognition & NPA provision

RBI: Automation of Income recognition, asset classification and provisioning – latest guidelines RBI vide its communication September 14, 2020, informed the banks that in spite of its earlier instructions issued on August 04, 2011, to use IT system in place for identification of Non-Performing Assets (NPA) and generation of related data...

Read More
Posted Under: Fema / RBI |

Individual loan resolution plan of RBI – All you want to know

Looking at the difficulties faced by Individuals borrowers in servicing their EMIs due  to reduced earning capacity of salaried as well as self employed, the RBI vide its circular dated 6th August 2020 has advised all the lenders to prepare a resolution policy for the borrowers impacted by the Covid 19 pandemic. Let us discuss […]...

Read More
Posted Under: Fema / RBI |

RBI: Kamath Committee – Resolution frame work for stressed accounts

From RBI web site, The Reserve Bank had, on August 7, 2020, announced the constitution of an Expert Committee under the chairmanship of Shri K.V. Kamath to make recommendations on the required financial parameters to be factored in the resolution plans under the ‘Resolution Framework for Covid19-related Stress’ along with sector-speci...

Read More
Posted Under: Fema / RBI |

Ratios which banks must consider for finalizing resolution plan of eligible borrowers

Circular No. RBI/2020-21/34 DOR.No.BP.BC/13/21.04.048/2020-21 and Press Release: 2020-2021/298 (07/09/2020)

All lending institutions shall mandatorily consider the following key ratios while finalizing the resolution plans in respect of eligible borrowers under Part B of the Annex to the Resolution Framework:...

Read More

Reserve Bank of India: Priority Sector Lending Directions, 2020

Reserve Bank of India vides its Reserve Bank of India (Priority Sector Lending – Targets and Classification) Directions, 2020 dated 4th September 2020 issued a detailed circular, a mammoth exercise of consolidating 49 circulars/directions issued from 2007 till date. I am proud to write this article on this topic which keeps the course o...

Read More
Posted Under: Fema / RBI |

RBI’s latest measures to Foster Orderly Market Conditions

RBI in its communication dated 31st August 2020 informed that it had announced special open market operations on August 25, 2020 and that it would continue to monitor evolving liquidity and market conditions and take measured steps for the orderly functioning of financial markets. We are aware that market sentiments were impacted by conce...

Read More
Posted Under: Fema / RBI |

RBI Governor: Time for banks to look deeply within & reorient banking

Keynote Address by Shri Shaktikanta Das, Governor, Reserve Bank of India – Delivered at the Unlock BFSI 2.0 with Business Standard on Thursday, August 27, 2020, has been reported in RBI web site which is reproduced below: https://www.rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1099 His speech will be analyzed in the following manner:...

Read More
Posted Under: Fema / RBI |

RBI: Framework for authorization of pan-India Umbrella Entity for Retail Payments

RBI informed us on 18th August 2020, that it has placed on its web site a framework for authorization of pan-India umbrella entity for retail payments which was released after due deliberations on the basis of comments/feedback received for its draft framework for authorization of pan-India umbrella entity for retail payments which was pl...

Read More
Posted Under: Fema / RBI |

Regulatory framework for payment systems: India VS United Kingdom

Reserve Bank of India vides its communication dated 18th August 2020 has placed in its web site a draft framework for the grant of recognition to an industry association as a Self-Regulatory Organization (SRO) for Payment System Operators (PSOs). The SRO shall cover operators in all segments of payment systems and will be expected to [&he...

Read More
Posted Under: Fema / RBI |

RBI issued clarification on new definition of MSMEs

The Reserve Bank of India (RBI) in its recent circular (FIDD.MSME & NFS.BC.No.4/06.02.31/2020-21 dated August 21, 2020) to all Commercial Banks including Small Finance Banks, Local Area Banks and Regional Rural Banks, all Primary (Urban) Co-operative Banks/State Co-operative Banks / District Central Co-operative Banks,  all-India Fin...

Read More
Posted Under: Fema / RBI |

RBI Guidelines on Opening of Current Accounts of Borrowers by Banks

Fund diversion has always been a major problem in our banking system. It has been observed in all major cases of wilful default or fraud that the funds borrowed from banks have been diverted elsewhere and the banks had no control on utilization of funds. This situation is caused due to the fact that there […]...

Read More
Posted Under: Fema / RBI |

National strategy for Financial Education 2020-2025

Based on the review of progress made under the National Strategy for financial education 2013-18 and keeping in view the various developments that have taken place over the last 5 years, notably the Pradhan Mantri Jan Dhan Yojana (PMJDY), the National Centre for Financial Education (NCFE) in consultation with the four Financial Sector Reg...

Read More
Posted Under: Fema / RBI |

Change in rules for opening current account with banks

In India many reforms are taking place. Another reform is to safeguard the banks money and reduce NPA of accounts. Business houses often take CC/OD facility from one bank, open current account in another bank and perform all the business transactions in that current account....

Read More
Posted Under: Fema / RBI |

Gold Card Scheme for Creditworthy Exporters

Gold Card Scheme for Creditworthy Exporters Exports play a crucial role in a developing economy like India which attaches considerable importance to export promotion. As a part of the overall strategy of export promotion measures, the Reserve Bank of India has taken various steps to ensure expeditious and timely provision of financial ass...

Read More
Posted Under: Fema / RBI |

RBI latest guidelines on Core Investment Companies

I have already written in one of my earlier articles that I was amazed to find the names of 13 companies at the entrance of an office but with no receptionist or any semblance of company activities therein.  This type of behavior of companies might have forced RBI to constitute a Working Group (WG) to […]...

Read More
Posted Under: Fema / RBI |

No to current account for customers having CC/OD facilities & its Impact Analysis

1. Now Banks can’t open current accounts for borrowers who have a cash credit account with any other bank. 2. Banks with over 10% exposure can open CC/OD accts; other lenders can have collection accounts; but have to debit money only to CC/OD accounts of banks that have more than 10% exposure to borrower...

Read More
Posted Under: Fema / RBI |

No Current Account In Banks for CC/OD Customers?

RBI on August 06, 2020, barred banks from opening current accounts for customers who have availed cash credit or overdraft facilities from any bank. RBI has taken this measure with a view to improve credit discipline. In a notification, the central bank said that rather than opening a new current account, all transactions should be [&hell...

Read More
Posted Under: Fema / RBI |

RBI Payment and Settlement Systems

The Reserve Bank of India (RBI) has released Statement on Developmental and Regulatory Policies dated 06th August, 2020 on account of various developmental and regulatory policy measures to enhance liquidity support for financial markets and other stakeholders; further easing of financial stress caused by COVID-19 disruptions. Payment and...

Read More
Posted Under: Fema / RBI |

Legal Entity Identifier [LEI Code – RBI MANDATE]

The Legal Entity Identifier (LEI) is a 20-character, alpha-numeric code based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). It connects to key reference information that enables clear and unique identification of legal entities participating in financial transactions. Each LEI contains i...

Read More
Posted Under: Fema / RBI |

RBI New Guidelines on Opening of Current Accounts by Banks

Reserve Bank of India (RBI) on August 6, 2020 vide circular no. RBI/2020-21/20 DOR. No. BP.BC/7/21.04.048/2020-21, Issued revised Guidelines on Opening Current Account with Banks, key points of which are as follows: 1. No Current Account, where Customer Availing Credit Facilities (CC/OD) from banking System 2. In Case, customer not availe...

Read More
Posted Under: Fema / RBI |

Future of Retail payments in United States – An instantaneous exhilarating experience

Governor Lael Brainard, the distinguished Governor of Federal Bank, United States of India unveiled the acceptance by Federal Reserve Board of Fed Now Service’s proposal, a revolutionary one for enabling banks of every size and in every community in America to provide safe and efficient instant payment services around the clock, every d...

Read More
Posted Under: Fema / RBI |

Framework for resolution of stressed loans on account of Covid-19

The RBI has, vide notification dated 06.08.2020, issued a new framework for resolution of stressed loans caused by Covid-19. I am discussing the relevant portion of this notification in my own words in simple and clear language in three parts. Part-I (General overview of the framework) Existing frameworks for restructuring of loans before...

Read More
Posted Under: Fema / RBI |

RBI barred opening Current Accounts for CC/OD Customers with Banks

In a recent notification, Reserve Bank of India (RBI) on 6th August 2020, instructed all Scheduled Commercial Banks to maintain a discipline on opening of Current Account. The below are highlights from the notification: 1. No bank shall open current accounts for customers who have availed credit facilities in the form of cash credit (CC)/...

Read More
Posted Under: Fema / RBI |

Indian economy: ‘Its future is bright’, says RBI Governor in CII Conference

Particularly for Indian citizens who are accustomed to hearing sad news or depressing articles from foreign writers, the present governor of RBI gave a heart-warming speech indicating the right direction for the Indian economy. Myself being a born optimist with decades of living in India is very happy to cover his speech with my observati...

Read More
Posted Under: Fema / RBI |

Financial Stability of Banking Sector – Bank & Borrower

THE FINANCIAL STABILITY OF THE BANKING SECTOR THE BANK AND THE BORROWER A RELATIONSHIP OF TRUST, FAITH, HOPE AND UNDERSTANDING. The advent of banking reforms in India has brought the concept of NPA (Non-Performing Asset) which has changed drastically the perception and approach of the bank and the customer when dealing with loans financed...

Read More
Posted Under: Fema / RBI |

RBI releases Financial Stability Report, July 2020- Highlights

Press Release: 2020-2021/96 (24/07/2020)

Reserve Bank released the 21st Issue of the Financial Stability Report (FSR), which reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, and the resilience of the financial system in the context of contemporaneous issues relating to development a...

Read More

Filing of FC-TRS – Reporting to Reserve Bank of India

The literal meaning of Form FC-TRS is Foreign Currency Transfer of Shares. This form is filed in case of transfer of shares of an Indian Company from a resident to a Non-Resident/Non-Resident Indian and vice versa through its authorised dealer bank (AD Category-1 Bank)...

Read More
Posted Under: Fema / RBI |

Indian Economy at a Crossroad: A view from Financial Stability Angle

he outbreak of COVID-19 pandemic is unambiguously the worst health and economic crisis in the last 100 years during peace time with unprecedented negative consequences for output, jobs and well-being. It has dented the existing world order, global value chains, labour and capital movements across globe and needless to say, the socio-econo...

Read More
Posted Under: Fema / RBI |

RBI Governor’s Speech: Viewing Indian Economy At Financial Stability Angle

Shaktikanta Das, Governor, Reserve Bank of India while inaugurating the SBI’s 7th conclave on Banking and economy gave his keynote address on July 11, 2020, and his historic address covered the glorious past few years of the banking crisis, the economic impact of COVID 19 and the future ahead of the Indian banking. But as […]...

Read More
Posted Under: Fema / RBI |

SC refuses to interfere with period of validity of cheque

In re Cognizance for Extension of Limitation (Supreme Court)

In re Cognizance for Extension of Limitation (Supreme Court) With reference to the prayer, that the period of validity of a cheque be extended, we find that the said  period has  not  been  prescribed by  any Statute but  it  is  a  period  prescribed by the Reserve Bank of India under Section 35A of the Banking […]...

Read More

Gold in India

Gold in India As per the annual gold survey it comes out that 171,300 -200,000 metric tons of gold on the earth World’s largest gold holding country is USA holds 8, 1335 metric tons of gold USA is the country having largest gold in forex reserves i.e.; 79.1% India’s gold holding is 653.01 tons here […]...

Read More
Posted Under: Fema / RBI |

RBI extends FLA 2020 due date to 31st July 2020

Submission of annual return on FLA through the web-based FLAIR portal for financial year 2019-20 has been started. Entities which are filing FLA return for the first time/ with revised UIN (Unique identification number) are required to register themselves first for generating login credentials and they can file FLA return. However, the en...

Read More
Posted Under: Fema / RBI |

RBI’s Updates Relating to Flair & Liquidity Scheme For NBFC/HFCs

A. Special Liquidity Scheme for Non Banking Finance Companies and Housing Finance Companies Relevant Date: 01.07.2020 Relevant Notification: By RBI Notification No. RBI/2020-21/01- DoR (NBFC) (PD) CC.No.113/03.10.001/2020-21 What is New under the Notification? Purpose As per the notification dated 01.07.2020 the Government of India has ap...

Read More
Posted Under: Fema / RBI |

All about RBI ‘Floating Rate Savings Bonds’

After discontinuing its 7.75% fixed interest rate bonds on  28th May 2020, the RBI has come out with new ‘Floating rate savings  bonds‘ on 26th June 2020 which will be available from 1st July 2020. Article explains Who can buy RBI ‘Floating Rate Savings Bonds’ and nomination facility, Face Value,  tenure and interest ra...

Read More
Posted Under: Fema / RBI |

Impact of Leverage on Firms’ Investment: Decoding Indian Experience-RBI’s latest study

I am among those investors who wonder what has happened to the investment pattern of leading Indian industries who roared with huge financial leverage( It is defined as financial borrowing to generate income to overcome its cost of acquisition) after Indian economy skyrocketing during the past decade, and why no suitable income generated ...

Read More
Posted Under: Fema / RBI |

Can Financial Markets Predict Banking Distress? Evidence from India: RBI study

R.B.I. periodically publishes its research papers titled “Occasional papers” every year. On March 17, 2020, it published one under the title ‘Can financial markets predict banking distress: evidence from India’ which was undertaken by Dr. Snehal S. Herwadkar, Director and Mr. Bhanu Pratap, Manager in the Department of Economic and...

Read More
Posted Under: Fema / RBI |

RBI supervision of Financial Market Infrastructures (FMIs) and Retail Payment Systems (RPSs)

RBI supervision of Financial Market Infrastructures (FMIs) and Retail Payment Systems (RPSs) The recent document on Financial Market Infrastructures (FMIs) and Retail Payment Systems (RPSs) by RBI in its web site dated 13th June 2020 is the discussion of this article. A Financial Market Infrastructure (FMI) is defined as a multilateral sy...

Read More
Posted Under: Fema / RBI |

Private Sector Banks – RBI guidelines on ownership & corporate culture

RBI has constituted an Internal Working Group to review guidelines on ownership, governance and corporate structure of private sector banks taking into account the giant strides made by them in the recent past since 2002 onward. The new guidelines to be formed internally within RBI would also be put up in their web site for […]...

Read More
Posted Under: Fema / RBI |

Regulatory framework for Housing Finance companies (HFCs)- Proposed RBI guidelines

Recent HFCs have shown a tendency to violate sacred or ethical value for housing projects which propelled the usual humble seeker of a residential house, a life time goal for any poor or middle class Indian to book for a house, face enormous miseries....

Read More
Posted Under: Fema / RBI |

Reserve Bank of India (Sale of Loans) Directions, 2020

The Reserve Bank of India vide its communication dated June 8, 2020 has placed on its web site a draft document titled “Comprehensive framework for sale of loan exposures” for public comments to be received not later than 30th June 2020 which will be applicable to Scheduled Commercial Banks, All India Financial Institutions like NABAR...

Read More
Posted Under: Fema / RBI |

Draft Securitisation Framework: A Revised Scheme for an Advanced Era

The Banking and Finance sector is all set to experience noteworthy changes in the subsequent months. The Reserve Bank of India has released the Draft Framework for Securitisation of Standard Assets and has solicited public opinion on the same....

Read More
Posted Under: Fema / RBI |

RBI discussion paper on Governance in Commercial Banks in India

RBI has put in its web site for public comments a discussion paper titled ‘Governance in commercial banks in India’. The objective of the discussion paper is to align the current regulatory framework with global best practices while being mindful of the context of domestic financial system. Accordingly, some of the major highlights of...

Read More
Posted Under: Fema / RBI |

Money Transfer Service Scheme

WHAT IS MONEY TRANSFER SERVICE SCHEME (MTSS)? Money Transfer Service Scheme (MTSS) is a way of transferring personal remittances from abroad to beneficiaries in India. Only inward personal remittances into India such as remittances towards family maintenance and remittances favouring foreign tourists visiting India are permissible. Under ...

Read More
Posted Under: Fema / RBI |

Reduction In REPO Rate Vis-a-Vis Ultimate Benefit To Borrowers

The Reserve Bank of India (RBI) did another rate in repo rate by 40 basis point to 4%. Which ideally should be transmitted in the form of lower cost of finance (ROI) to borrowers. However the same is far from reality. The Reserve Bank of India introduced the MCLR methodology for fixing interest rate from […]...

Read More
Posted Under: Fema / RBI |

Highlights of RBI Governor’s announcements dated 22.05.2020

RBI extends the three-month moratorium The loan moratorium will be extended till August 31 2020. This makes it a six month moratorium Lending institutions are being permitted to restore the margins for working capital to the origin level by March 31, 2021...

Read More
Posted Under: Fema / RBI |

11 Key Highlights of RBI Press Conference dt. 22.05.2020; Loan moratorium extended 31 August, 2020

RBI Governor Shaktikanta Das addressed the media at 10 am today post  Finance Minister gave details of the Rs 20 lakh crore economic relief package to help the economy recover from the coronavirus pandemic. Key Highlights: 1. Repo rate reduced by 40 bps to 4% 2. Private consumption impacted most by COVID-19 3. Food inflation […]...

Read More
Posted Under: Fema / RBI |

Submission of Financial Information to Information Utility

NeSL is India’s first Information Utility and is registered with the Insolvency and Bankruptcy Board of India (IBBI) under the aegis of the Insolvency and Bankruptcy Code, 2016 (IBC). The Company has been set up by leading Banks and Public Institutions and is incorporated as a Union Government Company....

Read More
Posted Under: Fema / RBI |

Decoding Basic Monetary Policy Terminologies

During this time of pandemic COVID-19, we have seen multiple times that Our Hon’ble Finance Minister Mrs. Nirmala Sitharaman and RBI Governor Mr. Shaktikant Das has come up with lots of economic measures to prevent the economy from going into a deep depression which most of the other developed countries have yet failed to do […]...

Read More
Posted Under: Fema / RBI |

RBI to regulate operation of payment intermediaries

In this article we shall discuss the concept of Payment Aggregator and Payment Gateway. Further, we intend to cover the applicability, eligibility norms, governance practices and reporting requirements provided in the aforesaid guidelines....

Read More
Posted Under: Fema / RBI |

Covid-19: HC restrains bank from taking coercive action for default in factoring facility

Eastman Auto & Power Limited Vs RBI (Delhi High Court)

The object of issuing notifications/circulars dated 27.03.2020 and 17.04.2020 was to provide financial relief in repayment due to COVID-19 to the parties who have availed the term loans and working capital facilities but this relief is not extended towards factoring facilities....

Read More

Covid 19 – RBI Regulatory Package- FAQs on Benefit- NPA classifications

Benefits from Covid 19 – RBI Regulatory Package Moratorium Given : 1. Terms loans– All term loans such as agricultural term loans, retail, and crop loans will be given Moratorium of 3 months for payment of all installments(Principle and Interest) falling in b/w 01.March.2020 to 31.May.2020. So after three months, the repayment schedul...

Read More
Posted Under: Fema / RBI |

Repo Operations by Reserve Bank of India

Due to COVID-19 Pandemic world is facing unprecedented crisis both in terms of health & financially. India is also not immune to the crisis around globe. Recently, Reserve Bank of India (RBI) & Government of India have taken various steps for financial stability, among all steps one such step is Long Term Repo Operation and [&hell...

Read More
Posted Under: Fema / RBI |

Water Water Everywhere, Not a Drop to Drink: RBI’s Liquidity Infusion Initiatives Announced on 17.4.2020

Water Water Everywhere, Not a Drop to Drink… Well yes, the Indian Banking System’s current liquidity position, amidst the unfortunate COVID-19 outbreak in our Country, compares very well with that of an Ocean which has abundance of water in its kitty, but still this water is not drinkable, and so is of no use to […]...

Read More
Posted Under: Fema / RBI |

RBI announces second set of measures to preserve financial stability

RBI announces second set of measures to preserve financial stability and help put money in the hands of the needy and disadvantaged States and UTs allowed to borrow more to manage COVID-19 Reverse Repo rate reduced from 4.0% to 3.75% Relief provided to NBFCs and Real Estate Sector We will cure and endure, India is […]...

Read More
Posted Under: Fema / RBI |

Crux of RBI Governor Press Conference dated 17.04.2020

RBI Governor Shaktikanta Das addressed a press briefing today. This was his second briefing since the COVID-19 outbreak. In his previous address on March 27, Das announced several relief measures approved by its Monetary Policy Committee (MPC) to counter the economic slowdown. RBI Governor thanked Corona Warriors forefront of the battle a...

Read More
Posted Under: Fema / RBI |

RBI Governor’s Statement, April 17 2020- Further relief- Covid 19

Governor’s Statement, April 17, 2020 Today, humanity faces perhaps the trial of its time as COVID-19 grips the world in its deadly embrace. Everywhere, as also in India, the mission is to do whatever it takes to prevent epidemiological curve from steepening any further. Human spirit is ignited by the resolve to overcome the pandemic. [&...

Read More
Posted Under: Fema / RBI |

Process of credit creation by commercial banks and how RBI regulates credit flow

The process of credit creation by commercial banks and how the RBI regulates this credit flow This article is not from accounting, direct or indirect tax perspective. This deal with a general topic about how the credit is created by commercial banks in the economy and how the RBI monitors this credit creation. Let us […]...

Read More
Posted Under: Fema / RBI |

RBI allowed Banks to declare Moratorium on Term Loans-15 FAQs

Frequently Asked Questions : RBI Allowed Banks to Declare Moratorium on Term Loans Last week, the Reserve Bank of India has allowed Banks to declare a three-month moratorium on all term loans outstanding as on March 1, 2020, as well as on working capital facilities. The Indian Banks Association has answered a list of Frequently […]...

Read More
Posted Under: Fema / RBI |

Can RBI catch failing banks into a safety net?

Indian banking system was on fire owing to Non-performing assets and the onset of COVID 2019 would perhaps turn it into a fireball impact on the vulnerable financial services sector in India. It may become increasingly difficult for the RBI to regulate and provide emergency administrative action if large number of vulnerable banks in Indi...

Read More
Posted Under: Fema / RBI |

Suggestions on draft Scheme of reconstruction of Yes Bank Ltd

Scheme of reconstruction of Yes Bank Ltd: some suggestions on the draft scheme. Executive Summary: I have carefully gone through the scheme of merger and as hardcore banker, I feel RBI may look at Sec 19(2) of Banking Regulation Act which cover aspects like applicability of SEBI take-over code and Pricing of the shares of […]...

Read More
Posted Under: Fema / RBI |

Banking Regulation (Amendment) Bill, 2020

Bill No. 56 of 2020 (03/03/2020)

Government introduces Banking Regulation (Amendment) Bill, 2020 in Lok Sabha to bring the co-operative banks on par with the developments in the banking sector through better management and proper regulation of co-operative banks with a view to ensure that the affairs of the co-operative banks are conducted in a manner that protects the i...

Read More

RBI-FLA Reporting Though Flair

What is an FLA Return As per Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017, an Annual Return on Foreign Liabilities and Assets (FLA) is required to be filed by Indian company which has received FDI or made ODI abroad or an LLP which has received investment […]...

Read More
Posted Under: Fema / RBI |

Subvention Scheme: A Scam or A Boom!

These are some of the examples of subvention schemes offered by developers of real estate with tie-ups with banks and financial institutions. The discounts, freebies are extensively promoted by the builders to lure prospective homebuyers who obviously find these schemes irresistible....

Read More
Posted Under: Fema / RBI |

Major bank accounts that can be opened in India by non-residents

What are the major accounts that can be opened in India by a non-resident? Can a Bangladeshi/ Pakistani national or an entity owned/ controlled from Bangladesh/ Pakistan have an account in India?...

Read More
Posted Under: Fema / RBI |

Statement by Governor- Sixth Bi-monthly Monetary Policy Statement, 2019-20

Press Releases No. 2019-2020/1891 and 1890 (06/02/2020)

Reserve Bank of India Statement by Governor – Sixth Bi-monthly Monetary Policy Statement, 2019-20, February 6, 2020 Over the last three days, i.e., during 4th, 5th and 6th February, 2020 the Monetary Policy Committee (MPC) met and assessed current and evolving macroeconomic and financial conditions and the outlook. After extensive a...

Read More

Inflation vs Growth: Which way is the RBI likely to sway?

Inflation jumped above the RBI’s comfort zone in December 2019 and is likely to print above 7% even in January 2020. This increase has been driven by domestic supply disruptions, leading to a spike in vegetable prices (especially onions). However, its not just an onion story, with the rise being more broad based, influenced by increasin...

Read More
Posted Under: Fema / RBI |

DICGC increases insurance coverage for depositors in all insured banks to ₹ 5 lakh

Press Release: 2019-2020/1878 (04/02/2020)

With a view to providing a greater measure of protection to depositors in banks the Deposit Insurance and Credit Guarantee Corporation, a wholly owned subsidiary of the Reserve Bank of India, has raised the limit of insurance cover for depositors in insured banks from the present level of ₹1 lakh to ₹5 lakh per depositor with effect f...

Read More

What is Commercial Paper and FAQs

Commercial paper, or CP, is a short-term debt instrument issued by companies to raise funds generally for a time period up to one year. It is an unsecured money market instrument issued in the form of a promissory note and was introduced in India in 1990. Corporates which enjoy a high rating can diversify their […]...

Read More
Posted Under: Fema / RBI |

Branch Office of foreign company in India- Compliance and Benefits

Article explains What is a Branch Office, What are the benefits of opening the Branch Office, Why Branch Office is not used as a preferred mode by foreign entities for setting up in India, What are the compliances of the Branch Office and Can a Branch Office can be converted into wholly owned subsidiary company? […]...

Read More
Posted Under: Fema / RBI |

RBI Compliance in Case of Acquisition/ Transfer of Control of NBFC

Article discusses The procedure of acquisition/ transfer of control of NBFC, The requirement of prior approval of Reserve Bank for Acquisition/ Transfer of Control of NBFC, Application for prior approval for Acquisition/ Transfer of Control of NBFC and requirement of Prior Public Notice about change in control/ management of NBFC. Procedu...

Read More
Posted Under: Fema / RBI |

Mandatory Requirement to Obtain LEI Code pursuant to RBI Circulars

Mandatory Requirement To Obtain Legal Entity Identifier (LEI) Code Pursuant To RBI Circulars/ Instructions Legal Entity Identifier (LEI) is a 20-character unique code which every company is required to obtain who are parties to financial transactions.  The concept of LEI and its deadlines are issued pursuant to RBI circulars dated 29.11....

Read More
Posted Under: Fema / RBI |

RBI modifies and increases P2P Lending Restriction to INR 50 Lakh

Reserve Bank of India has announced certain changes pertaining to peer- to- peer lending platform.  RBI made amendments to the P2P lending platform on 23rd December 2019. The purpose of changes is to make it more consumers friendly and to protect consumer interest. The largest banking body of India consciously made the alteration. As per...

Read More
Posted Under: Fema / RBI |

50 years of nationalization of Indian Banks: celebration and an introspection

When Mr R.K. Panjwani, a banking colleague of mine for 40 years congratulated me on the occasion of 50 years of Indian banks nationalization, my mind waded back to RBI Governor, Shaktikanta Das, lecture on 16th November 2019 at Amrut Modi School of Management, Ahmedabad University. Yes, it is time to think about the performance […]...

Read More
Posted Under: Fema / RBI |

RBI’s latest Liquidity Risk Management guidelines for NBFCs

RBI’s latest Liquidity Risk Management guidelines for Non-Banking Financial Companies (NBFCs) RBI in its wisdom issued detailed guidelines on liquidity risk management for NBFCs on November 4, 2019 with non-deposit taking NBFCs with asset size of Rs. 100 Crore and above, systematically important Core investment companies and all deposit...

Read More
Posted Under: Fema / RBI |

Private Bank CEO Salary: RBI revises compensation guidelines

Effective governance of compensation – The Board of Directors to oversee compensation system’s design and operation, monitor the compensation system, and staff engaged in financial and risk control must be independent and compensated irrespective of the areas supervised by them. All in altruistic sense....

Read More
Posted Under: Fema / RBI |

Bank Deposit Insurance by DICGC- FAQs

Each depositor in a bank is insured upto a maximum of 1,00,000 (Rupees One Lakh) for both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank's licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force....

Read More
Posted Under: Fema / RBI |

PMC Bank Loan Scam

Before readers go through the PMC bank scam it is important for them to understand the background of  PMC bank:- ♠ PMC stands for Punjab and Maharashtra Co-operative Bank. ♠ The bank started on February 13,1984 ♠ The bank has a wide network of 137 branches across six states. ♠ The Bank stands among top […]...

Read More
Posted Under: Fema / RBI |

Serious lapses in processing recent DICGC claims – Open letter to RBI

You might have read a lot on PMC bank debacle (including some of my articles on PMC Bank and DICGC) in the last couple of days. The communication to Governor RBI (I termed it as ‘an open letter’) write up and commentary will speak of the reality, the current state of affairs. The risk of losing […]...

Read More
Posted Under: Fema / RBI |

Resolution of stressed assets- Analysis of latest RBI circular

Key provisions of latest RBI Circular No. RBI/2018-19/203 DBR.No.BP.BC.45/21.04.048/2018-19 dated June 07, 2019 in relation to Resolution of stressed assets. 1. Identification and reporting of stress Lenders shall recognize incipient stress in loan accounts classifying such assets as special mention accounts (SMA) as following: SMA Sub-ca...

Read More
Posted Under: Fema / RBI |

PMC Bank failure – insight of DICGC-Risky Bonds issued by PMC– Suggestions to RBI

Most of you may be reading, listening to the news on Punjab Maharashtra Co-operative Bank’s failure and would broadly be aware as to how a co-operative bank ranking number four in the Cooperative sector with apparently good balance sheet became almost become bankrupt, overnight. At this stage issue of accountability would be discussed f...

Read More
Posted Under: Fema / RBI |

P2P Lenders Hope of an Increase in Lending Limit

P2P Lenders Hope of an Increase in Lending Limit as RBI Awakens to Their Demands RBI’s demand for P2P lending platforms to provide authentic data has certainly aroused hope for positive change among stakeholders! Background The Association of NBFC Peer-to-Peer (P2P) Lending Platforms had written a letter to the RBI in July this year, br...

Read More
Posted Under: Fema / RBI |

RBI supersedes Board of PMCB Bank Ltd. Mumbai

RBI vide its order dated 23rd September, 2019 superseded the Board of Punjab and Maharashtra Cooperative Bank Ltd. Mumbai and Shri Jai Bhagwan Bhoria has been appointed as the Administrator of the bank by RBI with all the powers of the Board....

Read More
Posted Under: Fema / RBI |

Govt. issues Sovereign Gold Bond Scheme 2019-20

Notification No. G.S.R. 705(E) (30/09/2019)

(i) This scheme may be called the Sovereign Gold Bond Scheme 2019-20. (ii) There will be a distinct Series (starting from Series V) for every tranche which will be indicated on the Bond issued to the investor. (iii) It shall come into force on the date of its publication in the Official Gazette....

Read More

Draft RBI Guidelines for ‘on tap’ Licensing of Small Finance Banks in Private Sector

Reserve Bank of India Draft Guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector September 13, 2019 I. Introduction The Reserve Bank had issued the Guidelines for Licensing of ‘Small Finance Banks‘ in  the Private Sector on November 27, 2014. The process of licensing culminated in granting in-pri...

Read More
Posted Under: Fema / RBI |

Small Finance Bank: How to set up and help smallest city in India

A small kid asked me whether he/she could set up a small finance bank and help his relatives living in a small village in Himachal Pradesh. To answer this question and being a retired senior executive from a nationalized bank who worked in the department dealing with financing small borrowers in late 1970s, I was […]...

Read More
Posted Under: Fema / RBI |

Third Bi-monthly Monetary Policy Statement, 2019-20 Resolution of Monetary Policy Committee (MPC) Reserve Bank of India

Press Release: 2019-2020/364  (07/08/2019)

Reserve Bank Of India Date : Aug 07, 2019 Third Bi-monthly Monetary Policy Statement, 2019-20 Resolution of the Monetary Policy Committee (MPC) On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today decided to: reduce the policy repo rate under the liqui...

Read More

Browse All Categories

CA, CS, CMA (5,048)
Company Law (6,715)
Custom Duty (8,083)
DGFT (4,388)
Excise Duty (4,409)
Fema / RBI (4,436)
Finance (4,695)
Income Tax (35,108)
SEBI (3,756)
Service Tax (3,626)

Search Posts by Date

December 2020
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
28293031