RBI Circular

The RBI's recent circular designates Sovereign Green Bonds issued in fiscal year 2023-24 as 'specified securities' under the Fully Accessible Route (FAR) for non-resident investors. This allows unrestricted access to these bonds, aligning with the RBI's commitment to broaden investment opportunities in Government Securities. Effective immediately.

This circular reminds Authorized Dealer Category – I (AD Category – I) banks of the permission granted in A.P. (DIR Series) Circular No.04 dated May 25, 2022, allowing remittance of advance payments by Qualified Jewellers for gold imports through India International Bullion Exchange IFSC Ltd (IIBX). It extends this provision to include silver imports, as per DGFT Notification No.35/2023 dated October 11, 2023, subject to specified conditions. AD Category-I banks are instructed to inform their constituents and customers accordingly. The directions are issued under FEMA, 1999.

The circular highlights amendments to the Master Direction on Know Your Customer (KYC), emphasizing Regulated Entities' obligation to avoid accounts for individuals/entities on the UN Security Council's suspected terrorist links list. It provides details on listed individuals/entities, advising strict compliance with KYC procedures and forwarding delisting requests to the Ministry of Home Affairs. Updated lists are available on the UNSC website.

Bulk deposit limits for banks have been revised: Scheduled Commercial Banks and Small Finance Banks now accept deposits of 2 crore or more, while Regional Rural Banks accept deposits of 1 crore or more. For RRBs, the limit is 15 lakhs and above.

Entities eligible for the Account Aggregator ecosystem must serve as both Financial Information Users (FI-U) and Financial Information Providers (FIP) if they hold relevant financial data to ensure efficient utilization of the system.

District Central Co-operative Banks (DCCBs) must obtain RBI approval to open new branches or ATMs. Clarifications have been provided for shifting branches within the same locality and closing unprofitable branches by DCCBs in compliance with the 2020 amendment to the Banking Regulation Act.

RBI extended PCA Framework to Govt NBFCs, effective Oct 1, 2024, based on March 31, 2024, financials for better oversight.

e-Kuber will process government transactions on a specified non-working day to ensure accurate fiscal records for the year.

Circular from 2014 allowed UCBs to offer gold loans up to ₹2.00 lakh. In 2023, the limit increased to ₹4.00 lakh for UCBs meeting PSL targets.

Operation of Pre-Sanctioned Credit Lines at Banks through Unified Payments Interface (UPI). The scope of UPI is now being expanded by the inclusion of credit lines as a funding account.

Reserve Bank of India Act, 1934 - Section 42(1A) - Requirement for maintaining additional CRR. The incremental CRR (I-CRR) has been decided to be discontinued in a phased manner.

Reserve Bank of India (Classification, Valuation and Operation of Investment Portfolio of Commercial Banks) Directions, 2023 have been issued.

Responsible Lending Conduct – Release of Movable / Immovable Property Documents on Repayment/ Settlement of Personal Loans.

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Industry News & Update

Maintaining multiple bank accounts? Now, get single-view access to all transactions- Introduced via Internet banking & mobile app- By ICICI bank & Axis Bank.

Axis and ICICI Bank customers can now access a consolidated view of all their transactions with through new account aggregator enabled facility.

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Bank loans to grow at 13-13.5% in FY23-24, says CareEdge Ratings. This may result in expansion of overall economy leading to strong demand for loans

The credit rating agency is confident that banks possess sufficient capital to absorb the repercussions of the Reserve Bank of India's measures on anticipated credit losses and unsecured personal loans.

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