Tag: RESERVE BANK OF INDIA

RBI Imposes Penalty on Valuecorp Securities Company

The Reserve Bank of India (RBI) has, by an order dated December 23, 2025, imposed a monetary penalty of ₹2.40 lakh (Rupees Two Lakh Forty Thousand only) on Valuecorp Securities & Finance Limited (the company), for non-compliance with certain directions issued by RBI on ‘Submission of data to Credit Information Companies’, ‘Transfer of Loan Exposure’ and ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under Section 25(1)(iii) read with Section 23(4) of the Credit Information Companies (Regulation) Act, 2005 and Section 58G(1)(b) read with Section 58B(5)(aa) of the Reserve Bank of India Act, 1934.

The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2024. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the company’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the company was sustained, warranting imposition of monetary penalty:

The company had:

  1. failed to submit credit information of its customers to any of the Credit Information Companies (CICs);
  2. transferred a loan exposure to other than a permitted entity;
  3. failed to assign Unique Customer Identification Code (UCIC) to its customers;
  4. failed to carry out risk categorisation of its customers.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered by the company with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the company.

RBI issues Draft Directions pursuant to Policy Announcement

In pursuance of the announcement made in the Statement on Developmental and Regulatory Policies dated October 01, 2025, the Reserve Bank of India (RBI) has today issued the following draft Directions for public comments:

1.     Draft Reserve Bank of India (Capital Market Exposure) Directions, 2025

  1. Draft Reserve Bank of India (Commercial Banks – Capital Market Exposure)

Directions, 2025

  1. Draft Reserve Bank of India (Small Finance Banks – Capital Market Exposure) Directions, 2025

2.     Draft ‘Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Amendment Directions, 2025’

The comments on the draft guidelines are invited from public/stakeholders by November 21, 2025. The comments/ feedback may be submitted through the link under the ‘Connect2Regulate’ Section available on the Reserve Bank’s website. Comments may alternatively be forwarded to The Chief General Manager, Credit Risk Group, Department of Regulation, Central Office Reserve Bank of India, 12th/ 13th Floor Shahid Bhagat Singh Marg, Fort Mumbai – 400 001 or by email.

(Brij Raj)

Press Release: 2025-2026/1378                                      Chief General Manager

RBI issues new big rules for domestic transaction from Nov 1

The Reserve Bank of India (RBI) has rolled out a new framework for Domestic Money Transfer (DMT) in July 2024, targeting regulated enterprises. The updated guidelines focus on bolstering Know Your Customer (KYC) record standards and honing in on banking services and payment systems. These fresh directives come into effect as of November 1, 2024.

The aim of the revised regulations is to enhance the security of domestic money transfers and ensure adherence to prevailing financial laws. In light of the increasing prevalence of cashless and digital transactions in India, the intention is to provide a robust and secure structure for money transfers.

The alterations made to the existing framework were the product of a meticulous evaluation of various payment transfer services. As per a communication issued by the Reserve Bank of India to authorised payment system operators, remitting banks are now mandated to obtain and maintain a record containing the name and address of the beneficiary for cash disbursement. Moreover, every transaction initiated by a remitter must undergo validation through an additional factor of authentication (AFA).

The RBI in its July circular said: “The framework for Domestic Money Transfer (DMT) was introduced in 2011, vide RBI circular DPSS.PD.CO.No.622/02.27.019/2011-2012 dated October 5, 2011. There has been significant increase in the availability of banking outlets, developments in payment systems for funds transfers, and ease in fulfilling KYC requirements etc., since then; and now users have multiple digital options for funds transfer. A review was recently undertaken of various services facilitated in the current framework.” 

Key details

1. Banks are required to maintain a record of the beneficiary’s name and address during cash transfers to promote transparency and accountability in financial transactions.
2. Both Banks and Business Correspondents (BCs) are obligated to verify the remitter’s cell phone number and relevant documentation.
3. Remitters will undergo registration process using an authenticated mobile phone number and a self-certified ‘Officially Valid Document’ (OVD) as per the guidelines set by the Reserve Bank of India (RBI).
4. The new framework mandates remitting banks to keep track of the name and address of beneficiaries for cash pay-out services in order to enhance traceability and accountability in cash-based transactions.
5. These measures have been implemented to strengthen the oversight and accountability in cash transactions.
6. Additional authentication will be needed for each transaction.
7. Remitting banks and their BCs must follow the Income Tax Act rules on cash deposits.
8. Remitter banks must include the remitter’s details in the transaction message on systems like IMPS and NEFT.
9. Cash-based remittance transactions must have a specific identifier in the message.
10. For Cash Pay-out Service, the remitting bank has been asked to obtain and keep a record of the name and address of the beneficiary.

Impact on customers

> In order to utilise cash pay-in services, banks and business correspondents are required to register remitters with a verified cell phone number and a self-certified Officially Valid Document (OVD) in line with the Master Direction – Know Your Customer (KYC) Direction 2016.

> This measure is implemented to strengthen identity verification procedures and mitigate the risks related to potential fraud incidents.

> It is important to note that the updated guidelines do not apply to card-to-card transfers, as they will continue to be governed by the existing regulations specific to such transactions.

Cash payout services

Cash pay-out refers to transferring funds from bank accounts to beneficiaries who do not have a bank account. The process of cash pay-out involves transferring funds from bank accounts to individuals who do not have their own bank accounts. In 2011, the central bank issued a statement allowing banks to offer services that enable clients to transfer funds from their accounts for cash delivery to recipients without bank accounts at an ATM or through a designated agent known as a Business Correspondent. The maximum amount allowed for such transfers was increased from Rs. 5,000 to Rs. 10,000 per transaction, with a monthly cap of Rs. 25,000. 

“Banks are permitted to provide services which facilitate transfer of funds from the accounts of their customers for delivery in cash to the recipients not having bank accounts at an ATM or through an agent appointed as Business Correspondent. It has been decided to raise the ceiling on the value of such transfers from Rs. 5,000 to Rs. 10,000 per transaction subject to the cap of Rs. 25,000 per month,” the RBI had said.

Big Update On RBI Repo Rate

Like other central banks around the world, RBI is raising interest rates to control inflation. The central bank may increase the repo rate by 0.50 per cent in the Monetary Policy Committee (MPC) meeting to be held in June. This will make different types of loans like home-auto loans more expensive.

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p style=”text-align: left”>British brokerage house Barclays said in a report that along with raising the repo rate in the June meeting, the central bank may also review its forecast of inflation. Under this, the rate of retail inflation in the current financial year can be between 6.2 to 6.5 percent. However, this rate is still higher than its upper bound of 6 per cent. The brokerage house said in the report that in view of inflation and other challenges, the RBI may also reduce its forecast of economic growth for the financial year 2022-23 from 7.2 per cent to 7 per cent.

RBI Governor Gives These Big Signs On Repo Rate

In order to control the ever-increasing inflation in the country, in the first week of May, the Reserve Bank of India (RBI) had hurriedly called a meeting of the MPC and increased the repo rates by 0.40 percent. At the same time, RBI Governor Shaktikanta Das has again indicated an increase in policy rates. 

After the announcement of reducing the excise duty on petrol and diesel by the central government, now RBI Governor Shaktikanta Das said that the possibility of further increase in repo rates could be done in the next meeting. During an interview to an English TV channel, he said the policy rates were raised to 4.40 earlier this month. Now these can be increased to 5.15 percent, which was the level before COVID. It is worth noting that the next meeting of the RBI Monetary Committee (MPC) is to be held in June, in which the decision to hike repo rates is likely to be taken.

RBI Imposes Fine On Three Co-Operative Banks

The Reserve Bank of India has taken action against three co-operative banks for non-compliance with the rules. The banks which have been penalized include Phaltan-based Yashwant Co-Operative Bank Ltd., Kokan Mercantile Co-operative Bank Ltd., Samta Co-operative Development Bank Ltd.

According to the statement, RBI has taken action against these banks for non-compliance. It was informed that action has been taken against Yashwant Co-operative Bank for non-compliance with the guidelines in respect of income, asset classification and other matters of Rs. Along with this, a penalty of Rs 2 lakh has also been imposed on Mumbai-based Kokan Mercantile Co-Operative Bank Limited for non-compliance with the rules. Apart from this, a fine of Rs 1 lakh has been imposed on Kolkata-based Samta Co-operative Development Bank Ltd.

Banking Frauds Of 100 Crores Daily in India: RBI Claims

The country has lost Rs 100 crore everyday in the last seven years due to bank frauds. However, this loss amount is declining year after year. According to RBI, 83 per cent of banking fraud cases in the country are in just five states. Maharashtra tops it with 50 per cent, while Delhi is in second place. After that, most of the banking frauds are in the states like Telangana, Gujarat and Tamil Nadu.

According to the data, from April 1, 2015 to December 31, 2021, banking frauds of about Rs 2.5 lakh crore took place in all the states. In this, the share of these five states is more than Rs 2 lakh crore i.e. 83%. RBI has divided banking frauds into eight categories. However, the Finance Ministry says that steps have been taken for reporting and prevention of such incidents. Due to this, the cases of banking fraud are decreasing every year.

RBI Released Format Of Geo Tagging Of PoS Machines

The Reserve Bank of India (RBI) on Friday released the format for geo-tagging of payment system touch points to co-monitor the availability of payment accepting infrastructure. According to the news of PTI, Geo-tagging refers to marking the geographical location (latitude and longitude) of the payment touch point on the part of the shopkeeper to receive payment from his customers. This payment is accepted through POS terminal and QR code.

Emphasis on Payment Acceptance Infra

According to the news, RBI said in its format related to geo-tagging that it is committed to expand digital payment and provide inclusive access to all citizens. He said that to achieve this objective, it is important that a robust payment acceptance framework is in place and within reach across the country.

Geo-tagging to be reported to RBI

According to RBI’s draft paper, banks and non-banking payment system operators will retain the exact geographical location of all payment touch points. Apart from this, geo-tagging related to POS machines and QR codes will have to be reported to RBI.

Economy is in Better Shape, We Are Ready To Deal With Any Challenge: RBI Governor

Reserve Bank of India Governor Shaktikanta Das on Monday said the country’s economy is in a better shape despite the challenges posed by the Russia-Ukraine war and the RBI will ensure sufficient liquidity to support the economy. He said that the challenges that remain for the world at this point of time are the rise in the price of crude oil and the rise in the prices of major commodities.

Shaktikanta Das made this big statement while addressing an event of Confederation of Indian Industry (CII). He said that in March, 2020, capital of Rs 17 lakh crore has been infused so far in the economy affected by the epidemic. During his address, he assured the industry to ensure that there is enough liquidity in the economy. He said that with the capital adequacy ratio at 16 per cent and gross NPAs (non-performing assets) at a low of 6.5, the position of banks is better.

RBI Gives Big Gift To Exporters

The Reserve Bank of India (RBI) on Tuesday gave a big gift to the exporters. The central bank extended the Interest Equalization Scheme for pre and post shipment rupee credit for MSME exporters till March 2024 with an aim to boost outbound shipments. Explain that exporters get subsidy under this. Earlier last year in April 2021, this scheme was extended twice till the end of June and till September 2021.

According to the notification of the Reserve Bank, the government has decided to extend the interest equalization scheme on pre and post export loans in rupee denomination till March 31, 2024 or till further review, whichever is earlier. This extension is effective from October 1, 2021 and ends on March 31, 2024. RBI said the interest equalization rates under the scheme have been revised to 2 per cent and 3 per cent for specified categories of MSME manufacturer exporters. It is worth noting that the main objective of this scheme is to encourage exports. The exporters are given subsidy under the interest equalization scheme. Explain that India’s merchandise exports in February 2022 were $33.81 billion, which was 22.36 percent higher than $27.63 billion in the same month of 2021.

RBI Alerts Bank Customers On This Serious Matter

In a booklet published titled ‘Beware – A Booklet on Modus Operandi of Financial Fraud’, RBI said fraudsters are using innovative methods to defraud people unaware of the techno financial ecosystem and embezzle their hard-earned money. The booklet provides information on modus operandi of fraudsters, precaution against fraudulent transactions and digital hygiene.

Based on a review of complaints of fraud, the RBI said that information or fraudulently furnished confidential information by consumers is a major cause of financial fraud. It has asked people to never give confidential information like username, password, card details, CVV and OTP to anyone, be it family or friends. 

Also said that bank officials, financial institutions, RBI and other genuine organizations never ask for confidential information from consumers. RBI has asked people not to open unknown or unverified links, SMS and emails and delete them immediately.

Attention PNB Customers: A New Way To Protect Against Fraud

Public sector Punjab National Bank (PNB) will settle cheques of valued Rs 10 lakh or more from April 4 onwards only after re-verification from the issuer. According to the news of PTI, PNB on Tuesday said that this step has been taken to protect bank customers from the possibility of fraud in case of large amount cheques. Under this, Positive Payment System (PPS) will be necessary from April 4, 2022.

This system came into effect from January 1, 2021

According to the news and guidelines of the Reserve Bank of India, the system of CTS (Cheque Truncation System) clearing of Rs 50,000 and above was implemented from January 1, 2021. CTS is the mechanism of clearing of cheques electronically. RBI has said that though it is up to the account holder to avail the facility, banks may consider making it mandatory for clearance of cheques of Rs 5 lakh and above.

NPCI has prepared the system

PNB said that from next month, a positive payment system will be made necessary for the clearance of cheques of Rs 10 lakh and above. This system has been prepared by the National Payments Corporation of India (NPCI). Under this arrangement, customers issuing high value cheques are required to re-verify certain essential information. Those details are reconciled before settlement of the cheque for payment.

These details have to be given

Customers will have to share details such as account number, cheque number, cheque alpha code, date of issue, amount, beneficiary name for settlement of high value cheques under PPS. According to the bank, only cheques that are registered under PPS will be accepted under the dispute resolution mechanism.

Sovereign Gold Bond: Opportunity To Buy Cheap Gold. Know Who Will Get Discount

The opportunity to buy gold at cheap rates has opened from today. If you also want to buy gold at cheap rates, then you can invest money in Sovereign Gold Bonds. From today i.e. February 28, investment in sovereign gold bonds is open and money can be invested here till March 4. Sovereign Gold Bond is issued by the Reserve Bank of India. RBI has fixed its price at Rs 5,109 per gram. RBI said that the subscription of Sovereign Gold Bond Scheme 2021-22 Series X is going to open from February 28.

Online investors will get discount

The Government of India, in consultation with the Reserve Bank, has decided to give a discount of Rs 50 per gram less than the nominal value to the investors applying online. “The issue price of the gold bond for such investors will be Rs 5,059 per gram,” the RBI said. Explain that the issue price of Series IX, which was open for subscription during January 10-14, was Rs 4,786 per gram of gold.

How to invest

The Finance Ministry said that this bond will be issued to banks (except small finance banks and payment banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), post offices and recognized stock exchanges (NSE and BSE).

How much can you invest

In Sovereign Gold Bond, you will have minimum possible investment of 1 gram of gold. The ministry said that the investors would be paid a fixed rate of 2.5 per cent per annum on the face value. The maximum investment limit per year in Sovereign Gold Bond will be 4 kg for individual and HUF, 20 kg for trust and other such entities.

Car Loan Calculator: How Much EMI Will Have To Be Paid For Car Loan Of Rs 10 Lakh

Reserve Bank of India (RBI) has not made any changes in its recently released monetary policy repo rate and reverse repo rate. Repo rate has been retained at 4 per cent and reverse repo rate at 3.35 percent. With no increase in policy rates, it is clear that there is little hope of increasing interest rates on loans. In such a situation, the interest rates of the car loan will remain at the lower level. The country’s largest bank SBI is currently offering car loans at an initial 7.20 percent in the festive offer. Let us see if you are taking a car loan of 10 lakhs for 5 years, then what will be your EMI (Equated Monthly Installment). 

Loans will remain cheap due to no increase in rates!

Due to non-change in interest rates by the Reserve Bank, the loan rates i.e. lending rates may remain at the lower level for the time being. That is, taking a car loan or home loan is not getting expensive for you right now. The repo rate has a direct effect on the interest rates of the home loan. Repo rate is the interest rate at which commercial banks take loans from RBI. The increase in the repo rate means that when it is costly for banks to take loans, they will also make it expensive for the customers. In such a situation, the loan is not expected to be expensive at the moment. At the same time, reverse repo rate, is the rate at which banks get interest on their deposits with RBI.

From October 2019, the Reserve Bank has made it mandatory for banks to link floating rate personal loans, auto loans and home loans etc. to the repo rate. Most of the banks are offering auto loans, home loans at Repo Linked Lending Rate (RLLR). It is also called external benchmark rate (EBR). The impact of any change in the repo rate in RLLR loans to customers is immediately visible as compared to the Marginal Cost of Funds (MCLR) linked loans. MCLR was started from April 2016. MCLR is an internal benchmark. Actually, this is the interest rate of a bank, below which it does not give loan to anyone. It is based on the bank’s own cost of funds.

10 lakh car loan EMI

The initial interest rate on SBI auto loan interest rate (fixed rate) is 7.20 percent. On the other hand, if you take a car loan for 5 years based on credit score, then the initial interest rate will be 7.25% (0.25% + 1 year MCLR). This will be the floating rate. Now let us see the calculation of EMI. 

SBI Car Loan (Fixed Rate)

Loan Amount: Rs 10 lakh 
Loan Tenure: 5 Years 
Rate of Interest: 7.20% p.a. (Fixed Rate) 
EMI: Rs 19,896 
Total Tenure Interest: Rs 1,93,742  
Total Payment: Rs 11,93,742  

SBI Car Loan (CIC Score Based) 

Loan Amount: Rs 10 lakh 
Loan Tenure: 5 Years 
Rate of Interest: 7.25% p.a. (Fixed Rate) 
EMI: Rs 19,919 
Total Tenure Interest: Rs 1,95,162  
Total Payment: Rs 11,95,162  

Why should you check EMI?

Before taking the loan, how much installment will have to be paid every month, that is, how much your EMI will come, it should be calculated first. With this you will be able to know how much loan you can take. That is, what is your loan taking capacity. In such a situation, if you are going to take a car loan, then you will be able to plan it in advance. Also, by calculating the EMI beforehand, you can know the total loan amount, tenure and total repayment. You can plan for loan repayment or prepayment.

(Note: SBI car loan EMI here is at the bank’s initial interest rate. This detail is taken from the bank’s official website. This is a calculation. Interest rates may vary depending on your credit score, income, age and other criteria.) 

Cryptocurrency is Like Gambling, Tax Has To Be Paid Like Gambling Earnings: Finance Secretary

Various cryptocurrencies are currently in a gray area. Buying and selling crypto currency is not illegal. We have now designed the taxation framework to treat crypto assets for taxation like earnings from horse racing, gambling and other speculative transactions. According to Finance Secretary TV Somanathan, “The government is working towards enacting a law to regulate cryptocurrencies. The proposed legislation will require the approval of the Union Cabinet headed by the Prime Minister before it is introduced in the Parliament. Somanathan said, there is a debate going on in the country on how to regulate crypto. The government’s thinking is that there should be a comprehensive consultation on this issue in the country and it is also to see what is happening at the international level. At present, the government will not rush the regulation and will levy tax on the earnings from such transactions. Private cryptocurrencies will not be legal tender. The Reserve Bank plans to launch its own digital currency in the new financial year starting April 1, 2022.

In fact, after a long deliberation, the government made it clear in this budget that it would tax the income from the transfer of virtual assets, including crypto, at the rate of 30%. It will come into effect from 1st April 2022.

Budget 2022: RBI Will Launch Digital Currency

Finance Minister Smt. Nirmala Sitharaman has announced in the budget speech that the government will issue digital currency.

This will be helpful in boosting up the economy. She said that the government will take this step using blockchain and other technologies.

Digital Rupee will be issued by the Reserve Bank of India from the financial year 2022-23.

Breaking: Government Notifies Amalgamation Of PMC Bank And Unity Small Finance Bank

RBI Press Release (Vide Press Release ID: 2021-2022/1616)

The Government of India has today (25th January 2022) sanctioned and notified the Scheme for the amalgamation of the Punjab and Maharashtra Co-operative Bank Ltd. (PMC Bank) with Unity Small Finance Bank Ltd. (USFBL). The amalgamation will come into force with effect from the date of the notification of the scheme i.e. January 25, 2022. All the branches of the PMC Bank will function as branches of Unity Small Finance Bank Ltd. with effect from this date.

USFBL is making necessary arrangements to implement the provisions of the scheme.

The Scheme of amalgamation notified today (25th January 2022) envisages takeover of the assets and liabilities of PMC Bank, including deposits, by the USFBL in terms of the provisions of the scheme.

Government Notifies PNB Housing Finance Ltd To Perform Aadhaar Authentication Under Money Laundering Act

Notification in F. No. P-12011/11/2021-ES Cell-DOR, Dated 4th January 2022

Ministry of Finance, Department of Revenue

The notification reads as under:

In exercise of the powers conferred by sub section (1) of section 11A of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government on being satisfied that the reporting entity namely, “M/s. PNB Housing Finance Limited” complies with the standards of privacy and security under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016), and it is necessary and expedient to do so, and after consultation with the Unique Identification Authority of India established under sub section (1) of section 11 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 and the appropriate regulatory namely, the Reserve Bank of India, hereby permits the said reporting entity to perform authentication under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 for the purposes of section 11A of the Prevention of Money-laundering Act, 2002.

To Download the Notification, Please Click Here

Know These ATM Rules Before Withdrawing Money From ATM

From January 1, 2022, withdrawing money from ATM has become expensive. You will have to pay a higher price for every withdrawal transaction after the free withdrawal limit. According to the instructions issued by the Reserve Bank of India (RBI) in June 2021, customers of banks will have to pay Rs 21 for ATM withdrawals more than the free limit from January 1, 2022.

According to the Reserve Bank of India’s (RBI) notification dated June 10, 2021, from January 1, 2022, instead of Rs 20, the bank will now charge Rs 21 as ATM transaction charge from customers. This will have a direct impact on the pockets of the common man. According to the current rules of the bank, at present the limit of free cash withdrawal from ATM is 5. Cash can be withdrawn from ATM 5 times for free, but for more withdrawals, now Rs 21 will have to be paid.

Earlier Banks Used to Charge Rs 20 Per Transaction

The first 3 transactions are absolutely free on withdrawing money from the bank’s ATMs in six metro cities Mumbai, Delhi, Chennai, Kolkata, Bangalore and Hyderabad. It includes both financial and non-financial transactions. Whereas in non-metro cities, you can withdraw money from ATM up to 5 times. After this, for financial transactions in metro cities, Rs 20 per transaction and Rs 8.50 was to be paid as non-financial transaction. Which has now been increased to 21.

Reason For Increasing Transaction Fee

The decision has been taken to increase the transaction fee due to the increase in the cost of banks related to installation and maintenance of ATM machines. At the end of the financial year 2020-21, there were 1,15,605 ‘onsite’ (in bank premises) ATMs and 97,970 ‘offsite’ (other than bank premises) ATMs across the country. In the coming time, an increase in their number can also be seen.

HDFC Bank Alert: These Rules Related To Card Will Change On 1st January 2022

HDFC Bank has issued an alert for its customers. If you are also a HDFC Bank customer, then there is an important update for you. Giving information to the customers, the bank said, ‘The description of your HDFC Bank card entered on the merchant website/ app will be deleted. RBI had given orders regarding this, only after which the bank has taken this decision. The bank has given this information through message. Let us tell you that RBI has taken this decision so that the details of the customers’ cards are safe.

Card details to be filled every time

Actually, earlier the description of the card was always submitted on the app or merchant website. But now under the new rule, customers will have to fill the full description of the card every time they make a payment. Apart from this, RBI has given the option to the customers to select the token option as well. This new rule will be applicable from January 1, 2022.

What is token system? 

Tokenization is another way to submit your card details. Under this, instead of the original card details, a unique optional code description is generated. This is called a token.

Under this, the authorized card network has been allowed to provide token service on request. Token option will be available on both debit and credit cards from January 1, 2022. This is applicable for domestic transactions only. This means that this rule will not apply to international transactions.

Alert: More Than 600 Fake Apps Are Giving You Loans. Delete Them Immediately

At present, many cases of cyber fraud have been seen in the country, where many people have become victims of fraud. Actually, there are many such apps, through which fraudsters are cheating people online. According to the report, more than 600 loan giving fake apps (illegal lending apps) are running in the country and these apps are also available on the App Store. If you have also downloaded these apps, then delete them immediately, otherwise you may suffer a lot. The Central Government has given this information through a statement on Monday. Let us know which are those apps.

Let us tell you that in response to a written question in the Lok Sabha on behalf of the Union Finance Ministry, it was said that according to the Reserve Bank of India (RBI) there are more than 600 such apps which are fake. After this surge, now preparations are being made to tighten the screws on digital lending apps (online lending apps) in the country. To conclude this, a committee constituted by RBI in January has suggested the formation of a nodal agency for the security of customers.

The Minister of State for Finance said that the Reserve Bank has started the Sachet Portal to register complaints against fake or illegal apps. About 2,562 complaints have been received on this portal between January 2020 and March 2021 against digital lending apps.

According to the RBI report, digital loan fraud is on the rise in recent times. More than 2500 complaints were received against (online loan fraud) digital lending apps from January 2020 to March 2021, with the maximum number of cases being reported from Maharashtra. After this, people of Karnataka, Delhi, Haryana, Telangana, Andhra Pradesh, UP, West Bengal, Tamil Nadu got cheated together.

Keep an eye on the platform – RBI

RBI keeps on alerting its customers in time. The Reserve Bank had on 23 December 2020 asked customers to guard against “unethical activities of unauthorized digital loan platforms or mobile apps” following the arrival of such fake cases. At the same time, MoS Finance said that, ‘It urged people to verify the company or the firm offering such loans.’ The minister further said that, ‘The central bank has issued advisory to the states to monitor such platforms or apps through the relevant law enforcement agencies.’

Online Payment System Will Change From 1st January 2022. Know About New System!

From January 1, the method of online payment will change in the country. For this, the Reserve Bank of India (RBI) has issued a guideline. Following the guidelines of RBI, Google has also announced changes in online payment methods from January 1.

Google will not save card information

According to the information, Google will not save the card details of customers such as card number and expiry date etc. from January 1, 2022. In such a situation, while making manual online payment from January 1, you will have to write or note down your debit-credit card number, expiry date and other information somewhere. If you do not keep this information in note, then you will not be able to make manual online payment from Google.

RBI issued guidelines

Let us tell you that till now Google saves the card details of its users. When any customer used to pay, he has to enter only his CVV number. In this process, the confidential information of the user is saved with Google, which was considered dangerous in terms of data security. Therefore, by issuing a guideline, RBI has instructed not to save the sensitive information of the card in advance.

These card holders will be affected

According to the report, if you use a card from Discover, Diners, RuPay or American Express, then from January 1, 2022, you will have to enter your card information every time for manual online payment. If you use Visa or Mastercard, you will need to authorize the card information to be saved in the new format.

Google’s service will be affected

According to the report, the new guidelines of RBI will affect all payment services like Google Play Store, YouTube and Google Ads. Under the new format, you will have to enter your card information every time for all online manual payments from 1 January 2022.

Important Information From IndusInd Bank: New RBI Guidelines On Recurring Payments

What is the impact of new RBI guidelines on my current Standing instruction (SI) set up on my cards?

We may have allowed merchants to auto-charge our Credit Card / Debit Card on a recurring basis for services such as Netflix, Postpaid mobile, Insurance payments, etc. These recurring payments will not get through for merchants not compliant with RBI conditions from 1st Oct’21 onwards.

However, the given list of merchants is compliant, re-registration is required:

  • Netflix
  • Hotstar
  • Max Life Insurance
  • Amazon Prime
  • Policy Bazaar
  • HDFC ERGO General Insurance
  • Google India
  • Vodafone
  • Bajaj Allianz General Insurance

What shall I do for my bill payments?

We have introduced 17,000+ billers on our bill payments platform.

For checking your existing billers or adding new billers:

Go To IndusMobile

Go To IndusNet

For FAQs on new RBI guidelines on recurring payments, please click here

Assuring you of our best-in-class services at all times.

Warm Regards,
Team IndusInd Bank

RBI Issues New Guidelines For Opening Of Current Accounts In Case Borrowing Facility is Availed

RBI/2021-22/116

DOR.CRE.REC.63/21.04.048/2021-22

October 29, 2021

All Scheduled Commercial Banks

All Payments Banks

Madam/Sir,

Opening of Current Accounts by Banks – Need for Discipline

Please refer to our circular DOR.No.BP.BC/7/21.04.048/2020-21 dated August 6, 2020 on the captioned subject and associated circulars thereon.

  1. On a review and taking into account feedback received from Indian Banks’ Association (IBA) and other stakeholders, it has been decided that banks may open current accounts for borrowers who have availed credit facilities in the form of cash credit (CC)/ overdraft (OD) from the banking system as per the provisions below:

(i) For borrowers, where the exposure of the banking system is less than ₹5 crore, there is no restriction on opening of current accounts or on provision of CC/OD facility by banks, subject to obtaining an undertaking from such borrowers that they shall inform the bank(s), as and when the credit facilities availed by them from the banking system reaches ₹5 crore or more.

(ii) In respect of borrowers where exposure of the banking system is ₹5 crore or more, such borrower can maintain current accounts with any one of the banks with which it has CC/OD facility, provided that the bank has at least 10 per cent of the exposure of the banking system to that borrower.

Further, other lending banks may open only collection accounts subject to the condition that funds deposited in such collection accounts will be remitted within two working days of receiving such funds, to the CC/OD account maintained with the above-mentioned bank maintaining current accounts for the borrower. In case none of the lenders has at least 10% exposure of the banking system to the borrower, the bank having the highest exposure may open current accounts. Non-lending banks are not permitted to open current accounts.

  1. It is clarified that borrowers not availing CC/OD facility from the banking system shall continue to maintain current accounts as per para 1(v) of the above mentioned circular dated August 6, 2020, as hitherto.

  2. Further, banks are permitted to open/ maintain the following accounts, without any restrictions placed in terms of the above-mentioned circular dated August 6, 2020, subject to meeting the conditions specified as at para 2 of DOR.No.BP.BC.30/21.04.048/2020-21 dated December 14, 2020:

Inter-bank accounts

Accounts of All India Financial Institutions (AIFIs), viz., EXIM Bank, NABARD, NHB, and SIDBI

Accounts opened under specific instructions of Central Government and State Governments

Accounts attached by orders of Central or State governments/regulatory body/Courts/investigating agencies etc. wherein the customer cannot undertake any discretionary debits

  1. With reference to FAQ 18 of the circular dated December 14, 2020, in line with FAQ 9, banks maintaining collection accounts are permitted to debit fee/charges from such accounts before transferring the funds to the escrow account/CC/OD account of the borrower.

  2. With reference to para 3 of the circular dated December 14, 2020 read with FAQ 17, it is clarified that banks shall monitor all accounts regularly, at least on a half-yearly basis, specifically with respect to the exposure of the banking system to the borrower, and the bank’s share in that exposure, to ensure compliance with these instructions. If there is a change in exposure of banks or aggregate exposure of the banking system to the borrower which warrants implementation of new banking arrangements, such changes shall be implemented within a period of three months from the date of such monitoring.

  3. Banks may implement the necessary changes within one month from the date of this circular. The compliance position thereon will be reviewed thereafter.

  4. A consolidated self-contained circular on the subject will be issued soon.

  5. All other instructions contained in the circulars ibid remain unchanged.

Yours faithfully,

(Manoranjan Mishra)

Chief General Manager

RBI Barred CA Firm M/s Haribhakti & Co. LLP From Undertaking Audit Assignments Reguled by the RBI wef 1st April 2022

The Reserve Bank of India (RBI) in exercise of the powers vested under section 45MAA of the Reserve Bank of India Act, 1934, has, by an order dated September 23, 2021, debarred M/s Haribhakti & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 103523W / W100048), from undertaking any type of audit assignment/s in any of the entities regulated by RBI for a period of two years with effect from April 1, 2022. This action has been taken on account of the failure on the part of the audit firm to comply with a specific direction issued by RBI with respect to its statutory audit of a Systemically Important Non-Banking Financial Company.

This will not impact audit assignment/s of M/s Haribhakti & Co. LLP in RBI regulated entities for the financial year 2021-22.

RBI issues new guidelines for locker in banks, details here

The Reserve Bank of India (RBI) on Wednesday directed banks to maintain a branch-wise list of vacant lockers as well as a wait-list for the purpose of allotment of lockers and ensure transparency in allotment of lockers. Revised instructions will come into effect from January 1, 2022, the RBI said.

Safe Deposit Locker / Safe Custody Article Facility- Revised Instructions (Circular No. DOR.LEG.REC/40/09.07.005/2021-22 dated August 18, 2021)

PART I: Customer Due Diligence (CDD) for Lockers

  1. Customer Due Diligence

1.1 The existing customers of a bank who have made an application for locker facility and who are fully compliant with the CDD criteria under the Master Direction – Know Your Customer (KYC) Directions, 2016 (as updated from time to time) may be given the facilities of safe deposit lockers/ safe custody article subject to on-going compliance.

1.2 Customers who are not having any other banking relationship with the bank may be given the facilities of safe deposit locker / safe custody article after complying with the CDD criteria under the Master Direction – Know Your Customer (KYC) Directions, 2016 (as updated from time to time) and subject to on-going compliance. The due diligence shall be carried out for all the customers in whatever rights and capacities they may be hiring the locker.

1.3 Banks shall incorporate a clause in the locker agreement that the locker-hirer/s shall not keep anything illegal or any hazardous substance in the Safe Deposit locker. If the bank suspects the deposit of any illegal or hazardous substance by any customer in the safe deposit locker, the bank shall have the right to take appropriate action against such customer as it deems fit and proper in the circumstances.

1.4 The banks shall obtain recent passport size photographs of locker-hirer(s) and individual(s) authorised by locker hirer(s) to operate the locker and preserve in the records pertaining to locker-hirer being maintained in the bank’s branch.

PART II: Locker Allotment

  1. In order to facilitate customers making informed choices, banks shall maintain a branch wise list of vacant lockers as well as a wait-list in Core Banking System (CBS) or any other computerized system compliant with Cyber Security Framework issued by RBI, for the purpose of allotment of lockers and ensure transparency in allotment of lockers. The banks shall acknowledge the receipt of all applications for allotment of locker and provide a wait list number to the customers, if the lockers are not available for allotment.

2.1 Model Locker Agreement

2.1.1 Banks shall have a Board approved agreement for safe deposit lockers. For this purpose, banks may adopt the model locker agreement to be framed by IBA. This agreement shall be in conformity with these revised instructions and the directions of the Hon’ble Supreme Court in this regard. Banks shall ensure that any unfair terms or conditions are not incorporated in their locker agreements. Further, the terms of the contract shall not be more onerous than required in ordinary course of business to safeguard the interests of the bank. Banks shall renew their locker agreements with existing locker customers by January 1, 2023.

2.1.2 At the time of allotment of the locker to a customer, the bank shall enter into an agreement with the customer to whom the locker facility is provided, on a paper duly stamped. A copy of the locker agreement in duplicate signed by both the parties shall be furnished to the lockerhirer to know his/her rights and responsibilities. Original Agreement shall be retained with the bank’s branch where the locker is situated.

2.2 Locker Rent

2.2.1 Banks may face potential situations where the locker-hirer neither operates the locker nor pays the rent. To ensure prompt payment of locker rent, banks are allowed to obtain a Term Deposit, at the time of allotment, which would cover three years’ rent and the charges for breaking open the locker in case of such eventuality. Banks, however, shall not insist on such Term Deposits from the existing locker holders or those who have satisfactory operative account. The packaging of allotment of locker facility with placement of term deposits beyond what is specifically permitted above will be considered as a restrictive practice.

2.2.2 If locker rent is collected in advance, in the event of surrender of a locker by a customer, the proportionate amount of advance rent collected shall be refunded to the customer.

2.2.3 If there is any event such as merger / closure / shifting of branch warranting physical relocation of the lockers, the bank shall give public notice in two newspapers (including one local daily in vernacular language) in this regard and the customers shall be intimated at least two months in advance along with options for them to change or close the facility. In case of unplanned shifting due to natural calamities or any other such emergency situation, banks shall make efforts to intimate their customers suitably at the earliest.

PART III: Infrastructure and Security Standards

3.1 Security of the Strong Room/Vault

3.1.1 Banks shall take necessary steps to ensure that the area in which the locker facility is housed is properly secured to prevent criminal break-ins. The risks of accessibility of an allotted locker from any side without involvement of the locker-hirer concerned may be assessed and kept on record. Banks shall have a single defined point of entry and exit to the locker room/vault. The place where the lockers are housed must be secured enough to protect against hazard of rain / flood water entering and damaging the lockers in contingent situations. The fire hazard risks of the area should also be assessed and minimized. The banks, as per their policy, shall conduct necessary engineering / safety verification regularly to identify the risks and carry out necessary rectification.

3.1.2 The area housing the lockers should remain adequately guarded at all times. The banks shall install Access Control System, if required as per their risk assessment, which would restrict any unauthorized entry and create digital record of access to locker room with time log. As per their internal security policy, banks may cover the entry and exit of the strong room and the common areas of operation under CCTV camera and preserve its recording for a period of not less than 180 days. In case any customer has complained to the bank that his/her locker is opened without his/her knowledge and authority, or any theft or security breach is noticed/observed, the bank shall preserve the CCTV recording till the police investigation is completed and the dispute is settled.

3.1.3 The security procedures shall be well-documented and the staff concerned shall be properly trained in the procedure. The internal auditors shall verify and report the compliance to ensure that the procedures are strictly adhered to.

3.2 Locker Standards

3.2.1 All the new mechanical lockers to be installed by the banks shall conform to basic standards / benchmarks for safety and security as prescribed by Bureau of Indian Standards (BIS) or any other enhanced industry standards applicable in this regard.

3.2.2 Banks offering electronically accessed lockers should be fully aware of the safety and security features of such lockers satisfying appropriate industry standards. In case the lockers are being operated through an electronic system, the bank shall take reasonable steps to ensure that the system is protected against hacking or any breach of security. The customers’ personal data, including their biometric data, shall not be shared with third parties without their consent. Further, banks shall ensure that the electronically operated lockers are compliant with the Cyber
Security Framework prescribed by the Reserve Bank. The system should be capable of maintaining unalterable log of locker activities. The banks shall comply with the relevant statutory / regulatory guidelines/requirements applicable for IT / data protection. Further, the banks shall also devise a standard operating procedure for issue of new password in lieu of lost passwords to customers in a safe and secure manner in case of electronically operated lockers.

3.2.3 Banks shall ensure that identification Code of the bank / branch is embossed on all the locker keys with a view to facilitating identification of lockers / locker ownership by law enforcement agencies in case of need. Further, the custodian of the locker shall, regularly/periodically, check the keys maintained in the branch to ensure that they are in proper condition. Banks shall permit the locker-hirer to operate the locker only with the key provided by the bank, although there is no restriction in allowing the customer to use an additional padlock of her /his own if there are such provisions in lockers.

PART IV: Locker Operations

4.1 Regular Operations by Customers

4.1.1 The locker hirer and/or the persons duly authorized by him/ her only shall be permitted to operate the locker after proper verification of their identity and recording of the authorization by the officials concerned of the bank. The bank shall maintain a record of all individuals, including the locker-hirers, who have accessed the lockers and the date and time (both check-in and check-out time) on which they have opened and closed the locker and obtain their signature. The ingress and egress register for access to Vault Room by locker-hirers or any other individual including the banks’ staff shall be maintained to record the movement of individuals in the Vault Room area with their signatures at appropriate place in the records.

4.1.2 The bank’s officer authorizing the locker-hirer to access the locker, after unlocking the first key / password shall not remain present when the locker is opened by the locker-hirer. The banks shall ensure that there is adequate privacy to the locker-hirers in the operations when customers access the lockers at the same time.

4.1.3 Banks shall send an email and SMS alert to the registered email ID and mobile number of the customer before the end of the day as a positive confirmation intimating the date and time of the locker operation and the redressal mechanism available in case of unauthorized locker access.

4.2 Internal Controls by banks

4.2.1 There shall be a system of inter change of locks whenever the locker is surrendered by the hirer. The keys of vacant lockers shall be kept in sealed envelopes. The duplicate master keys shall be deposited with another branch of the bank. There shall be proper record of joint custody of master keys. Banks shall conduct surprise periodic verification of surrendered/vacant lockers and their keys by an officer of the bank who is not connected with their custody and proper record shall be maintained as a proof of such verification.

4.2.2 Banks shall ensure that the Locker Register and the Locker Key Register are maintained in CBS or any other computerized system compliant with the Cyber Security Framework issued by the Reserve Bank. The Locker Register shall be updated in case of any change in the allotment with complete audit trails.

4.2.3 The bank custodian shall check whether the lockers are properly closed post locker operation. If the same is not done, the lockers must be immediately closed, and the locker-hirer shall be promptly intimated through e-mail, if registered or through SMS, if mobile number is registered or through letter so that they may verify any resulting discrepancy in the contents of the locker. The bank custodian shall record the fact of not closing the locker properly in the register and its closure by the bank with the date and time. Further, the custodian of the locker room shall carry out a physical check of the locker room at the end of the day to ensure that lockers are properly closed, and that no person is inadvertently trapped in the locker room after banking hours.

PART V: Nomination Facility and Settlement of Claims

5.1 Nomination Facility

5.1.1 The banks shall offer nomination facility in case of safe deposit lockers and safe custody of articles, in accordance with the provisions of section 45-ZC to 45-ZF of the Banking Regulation Act, 1949 and Banking Companies (Nomination) Rules, 1985/Co-operative Banks (Nomination) Rules, 1985. In case the nominee is a minor, the same procedure as prescribed for the bank accounts shall be followed by the banks. A passport size photo of the nominee attested by the customer may be obtained from the customers, at his/her option and preserved in the records.

5.1.2 For the various Forms (Forms SC1, SC2 and SC3 for Articles left in Safe Custody and Forms SL1, SL1A, SL2, SL3 and SL3A for Safety Lockers) prescribed under Banking Companies (Nomination) Rules, 1985/Co-operative Banks (Nomination) Rules, 1985, only Thumb-impression(s) shall be required to be attested by two witnesses. Signatures of the account holders need not be attested by witnesses.

5.1.3 Banks shall have appropriate systems and procedures in place to register the nomination, cancellation and / or variation of the nomination, in their books, made by the locker hirers.

5.1.4 Banks shall devise a proper system of acknowledging the receipt of duly completed form of nomination, cancellation and / or variation of the nomination. Such acknowledgement shall be given to all the customers irrespective of whether the same is demanded by the customers or not.

5.2 Settlement of Claims in case of death of a Customer

5.2.1 Banks shall have a Board approved policy for settlement of claims. The policy shall be in conformity with the regulatory instructions and the Model Operational Procedure (MOP) for settlement of claims of the deceased constituents formulated by the IBA and in case of State and Central Co-operative Banks, MOP formulated by NABARD.

5.2.2 Banks shall have a Board approved policy for nomination and release of contents of safety lockers / safe custody article to the nominee and protection against notice of claims of other persons in accordance with the provisions of Sections 45 ZC to 45 ZF of the Banking Regulation Act, 1949 and the Banking Companies (Nomination) Rules, 1985/Co-operative Banks (Nomination) Rules, 1985 and the relevant provisions of Indian Contract Act and Indian Succession Act.

5.2.3 In order to ensure that the articles left in safe custody and contents of lockers are returned to the genuine nominee, as also to verify the proof of death, banks shall devise their own claim formats, in terms of applicable laws and regulatory guidelines.

5.2.4 Time limit for settlement of claims: Banks shall settle the claims in respect of deceased locker hirers and shall release contents of the locker to survivor(s) / nominee(s), as the case may be, within a period not exceeding 15 days from the date of receipt of the claim subject to the production of proof of death of the depositor and suitable identification of the claimant(s) with reference to nomination, to the bank’s satisfaction.

5.2.5 Banks shall report to the Customer Service Committee of the Board, at appropriate intervals, on an ongoing basis, the details of the number of claims received pertaining to deceased locker-hirers / depositors of safe custody article accounts and those pending beyond the stipulated period, with reasons therefor. Customer Service Committee of the Board of the banks shall review the settlement of claims and make suggestions to ensure that the claims are settled as early as possible unless there is any litigation pending before the Courts or any difficulty is being faced in identifying the true claimant with reference to nomination.

5.3 Access to the articles in the safe deposit lockers / return of safe custody articles

5.3.1 If the sole locker hirer nominates an individual to receive the contents in the locker, in case of his death, after verification of the death certificate and satisfying the identity and genuineness of such individual approached, the banks shall give access of the locker to such nominee with liberty to remove the contents of the locker, after an inventory was taken in the prescribed manner. In case the locker was hired jointly with the instructions to operate it under joint signatures, and the locker hirer(s) nominates any other individual(s), in the event of death of any
of the locker hirers, the bank shall give access of the locker and the liberty to remove the contents jointly to the survivor(s) and the nominee(s) after an inventory was taken in the prescribed manner. In case the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given to “either or survivor”, “anyone or survivor” or “former or survivor” or according to any other survivorship clause permissible under the provisions of the Banking Regulation Act, 1949, the banks shall follow the mandate in the event of death of one or more of the joint locker-hirers.

5.3.2 Banks shall, however, ensure the following before giving access to the contents to nominee / survivor:

(i) Exercise due care and caution in establishing the identity of the survivor(s) / nominee(s) and the fact of death of the locker hirer by obtaining appropriate documentary evidence;
(ii) Make diligent effort to find out whether there is any order or direction from Courts/Forums restraining it from giving access to the locker of the deceased; and
(iii) Make it clear to the survivor(s) / nominee(s) that access to articles in the locker / safe custody articles is given to them only as a trustee of the legal heirs of the deceased locker hirer i.e., such access given to them shall not affect the right or claim which any person may have against the survivor(s) / nominee(s) to whom the access is given. Similar procedure shall be followed for return of articles placed in the safe custody of the bank.

5.3.3 The banks shall ensure that, the contents of locker, when sought to be removed on behalf of a minor nominee, are handed over to a person who is, in law, competent to receive the articles on behalf of such minor. Further, the banks shall prepare an inventory of the articles in the presence of two independent witnesses, one officer of the bank who is not associated with the locker facility or safe deposit of articles and the claimant (s), who may be a nominee or an individual receiving the articles, on behalf of a minor.

5.3.4 The bank shall obtain a separate statement from the nominee (claimant) or the person competent to receive articles on behalf of the minor, as the case may be, that all the contents in the locker or in the safe custody of the bank, as the case may be, are received and the locker is empty and they have no objection to allotment of the locker to any other customer as per norms.

5.3.5 While giving access to the survivor(s) / nominee(s) of the deceased locker hirer / depositor of the safe custody articles, banks may avoid insisting on the production of succession certificate, letter of administration or probate, etc., or obtain any bond of indemnity or surety from the survivor(s)/nominee(s), unless there is any discrepancy in nomination. In this regard, banks shall take note of our instructions under para 5.3.2.

5.3.6 In case where the deceased locker hirer had not made any nomination or where the joint hirers had not given any mandate that the access may be given to one or more of the survivors by a clear survivorship clause, banks shall adopt a Board approved policy to facilitate access to 10 legal heir(s) / legal representative of the deceased locker hirer. In this regard, banks shall take note of our instructions under para 5.3.2.

Similar procedure shall be followed for the articles under safe custody of the bank.

PART VI: Closure and Discharge of locker items

  1. This part refers to the breaking open of the locker in a manner other than through the normal access by the customer using her/his original key or password under any one of the following circumstances:

(i) if the hirer loses the key and requests for breaking open the locker at her /his cost; or
(ii) if the Government enforcement agencies have approached the bank with orders from the Court or appropriate competent authority to seize lockers and requested for access to the lockers; or
(iii) if the bank is of the view that there is a need to take back the locker as the locker hirer is not co-operating or not complying with the terms and conditions of the agreement.

Banks shall have a clear Board approved policy together with a Standard Operating Procedure (SOP) for breaking open the lockers for all possible situations keeping in view the relevant legal and contractual provisions.

6.1 Discharge of locker contents at the request of customer

6.1.1 If the key of the locker, supplied by bank is lost by the locker-hirer, the customer (locker hirer) shall notify the bank immediately. An undertaking may also be obtained from the customer that the key lost, if found in future, will be handed over to the bank. All charges for opening the locker, changing the lock and replacing the lost key may be recovered from the hirer. The charges applicable for replacement of lost keys / issue of new password shall be communicated to the locker hirer.

6.1.2 The opening of the locker has to be carried out by the bank or its authorized technician only after proper identification of the hirer, proper recording of the fact of loss and written authorization by the customer for breaking open the locker.

6.1.3 The operation shall be done in the presence of the customer/s and an authorized official of the bank. It has to be ensured that the adjoining lockers are not impacted by any such operations and the contents of the lockers are not exposed to any individual other than the locker-hirer during the break-up or restoration process.

6.2 Attachment and recovery of contents in a Locker and the Articles in the safe custody of the bank by any Law Enforcement Authority

6.2.1 In case of attachment and recovery of the contents in a locker of a customer or the articles left by a customer for safe custody of the bank by any Authority acting either under the orders of a Court or any other competent authority vested with the power to pass such orders, the banks shall co-operate in execution and implementation of the orders.

6.2.2 The bank shall verify and satisfy itself about the orders and the connected documents received for attachment and recovery of the contents in a locker or articles in the safe custody of the bank. The customer (locker-hirer) shall be informed by letter as well as by email/SMS to the registered email id/mobile phone number that the Government Authorities have approached for attachment and recovery or seizure of the locker or articles deposited for safe custody. An inventory of the contents of locker and articles seized and recovered by the Authority shall be
prepared in the presence of such Government Authorities, two independent witnesses and an officer of the bank and shall be signed by all. A copy of the inventory may be forwarded to the customer to the address available in the bank’s records or handed over to the customer against acknowledgement.

6.2.3 Banks shall also record a video of the break-open process and the inventory assessment, wherever legally permissible, and preserve the video to produce as evidence in case of any dispute or Court or fraud case in future.

6.3 Discharge of locker contents by banks due to non-payment of locker rent

6.3.1 Banks shall have the discretion to break open any locker following due procedure if the rent has not been paid by the customer for three years in a row. The bank shall ensure to notify the existing locker-hirer prior to any changes in the allotment and give him/her reasonable opportunity to withdraw the articles deposited by him/her. A clause may be incorporated in the locker agreement to this effect.

6.3.2 Before breaking open the locker, the bank shall give due notice to the locker-hirer through a letter and through email and SMS alert to the registered email id and mobile phone number. If the letter is returned undelivered or the locker-hirer is not traceable, the bank shall issue public notice in two newspaper dailies (one in English and another in local language) giving reasonable time to the locker-hirer or to any other person/s who has interest in the contents of locker to respond. The locker shall be broken open in the presence of an officer of the bank and two independent witnesses. In case of electronically operated lockers (including Smart Vaults), the use of ‘Vault Administrator’ password for opening of locker shall be assigned to a senior official and complete audit trail of access shall be preserved. Further, banks shall also record a video of the break open process together with inventory assessment and its safe keep and preserve the same so as to provide evidence in case of any dispute or Court case in future. Banks shall also ensure that the details of breaking open of locker is documented in CBS or any other computerized systems compliant with the Cyber Security Framework issued by RBI, apart from locker register. After breaking open of locker, the contents shall be kept in sealed envelope with detailed inventory inside fireproof safe in a tamper-proof way until customer claims it. A record of access to the fireproof safe shall invariably be maintained. While returning the contents of the locker, the bank shall obtain acknowledgement of the customer on the inventory list to avoid any dispute in future.

6.3.3 Banks shall ensure that the inventory prepared after breaking open of the locker and during settlement of claims, is in the appropriate forms as provided at the end of this circular or as near thereto as circumstances require. Further, banks shall not open sealed/closed packets left with them for safe custody or found in locker while releasing them to the nominee(s) and surviving locker hirers / depositor of safe custody article, unless required by law.

6.4 Discharge of locker contents if the locker remains inoperative for a long period of time

6.4.1 If the locker remains inoperative for a period of seven years and the locker-hirer cannot be located, even if rent is being paid regularly, the bank shall be at liberty to transfer the contents of the locker to their nominees/legal heir or dispose of the articles in a transparent manner, as the case may be. Before breaking open the locker, the bank shall follow the procedure as prescribed in paragraph 6.3.2 and 6.3.3 above. Banks shall ensure that the procedure to be followed by them for disposal of the articles left unclaimed for a reasonably long period of time as mentioned above is incorporated in their locker agreement.

6.4.2 The banks shall ensure that appropriate terms are inserted in the locker agreement executed with the customer specifying the position in case the locker is not in operation for long period. A clause may also be incorporated in the locker agreement to discharge the bank from liability in case the locker is not in operation and the locker is opened by the bank and contents are released as per law and as per the instructions issued by the Reserve Bank and the terms and conditions prescribed in the agreement.

PART VII: Compensation Policy / Liability for Banks

Liability of banks

The banks shall put in place a detailed Board approved policy outlining the responsibility owed by them for any loss or damage to the contents of the lockers due to their negligence as banks owe a separate duty of care to exercise due diligence in maintaining and operating their locker or safety deposit systems. The duty of care includes ensuring proper functioning of the locker system, guarding against unauthorized access to the lockers and providing appropriate safeguards against theft and robbery. Further, banks shall adhere to the Master Directions on Frauds for reporting requirements about the instances of robberies, dacoities, thefts and burglaries.

7.1 Liability of banks arising from natural calamities like earthquake, flood, thunderstorm, lightning etc. or due to sole negligence of the customer

The bank shall not be liable for any damage and/or loss of contents of locker arising from natural calamities or Acts of God like earthquake, floods, lightning and thunderstorm or any act that is attributable to the sole fault or negligence of the customer. Banks shall, however, exercise appropriate care to their locker systems to protect their premises from such catastrophes.

7.2 Liability of banks arising from events like fire, theft, burglary, dacoity, robbery, building collapse or in case of fraud committed by the employees of the bank

It is the responsibility of banks to take all steps for the safety and security of the premises in which the safe deposit vaults are housed. It has the responsibility to ensure that incidents like fire, theft/ burglary/ robbery, dacoity, building collapse do not occur in the bank’s premises due to its own shortcomings, negligence and by any act of omission/commission. As banks cannot claim that they bear no liability towards their customers for loss of contents of the locker, in instances where loss of contents of locker are due to incidents mentioned above or attributable to fraud committed by its employee(s), the banks’ liability shall be for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker.

PART VIII: Risk Management, Transparency and Customer Guidance

8.1 Branch Insurance Policy

Banks, with the approval of their Board, shall have a branch insurance policy to minimize the loss due to incidents like robbery, fire, natural calamities, loss during shifting/merger of branch, etc., affecting contents of lockers.

8.2 Insurance of locker contents by the customer

Banks shall clarify in their locker agreement that as they do not keep a record of the contents of the locker or of any articles removed therefrom or placed therein by the customer, they would not be under any liability to insure the contents of the locker against any risk whatsoever. Banks shall under no circumstances offer, directly or indirectly, any insurance product to its locker hirers for insurance of locker contents.

8.3 Customer guidance and publicity

8.3.1 The banks shall display the model locker agreement with all the Terms & Conditions and the Standard Operating Procedures (SOPs) on various aspects on their websites and/or at branches (if official website is not available) where locker facility is being provided by them for public viewing. The banks shall ensure that the customers are made aware of the bank’s terms and conditions to avail those facilities.

8.3.2 Banks shall display updated information on all kinds of charges for safe deposit lockers and safe custody articles on their websites.

8.3.3 Banks shall place on their websites, the instructions together with the policies / procedures put in place for giving access of the locker/safe custody article to the nominee(s) / survivor(s) / legal heir(s) of the deceased locker hirer/safe custody article. Further, a printed copy of the same shall also be given to the nominee(s) / survivor(s) / legal heir(s).

8.4 Board approved policies and SOPs

Banks shall put in place a comprehensive revised Board approved policy and SOPs on safe deposit locker facility/safe custody article as per the revised instructions mentioned herein.

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Big Relief to the Citizens: Now Banks will Face Flat Penalty of Rs 10000 Per ATM If Cash is Unavailable at ATMs for More Than Ten Hours in a Month

Scheme of Penalty for non-replenishment of ATMs

Objective of the Scheme

The Scheme of Penalty for non-replenishment of ATMs has been formulated to ensure that sufficient cash is available to public through ATMs.

Effective Date

The Scheme shall be effective from October 01, 2021. Therefore, banks/ WLAOs should put in place a robust system for monitoring the availability of cash in ATMs and ensure timely replenishment to avoid cash-outs.

Condition for counting instances of cash-outs in an ATM

When the customer is not able to withdraw cash due to non-availability of cash in a particular ATM.

Procedure

Banks shall submit system generated statement on downtime of ATMs due to non- replenishment of cash to the Issue Department of RBI under whose jurisdiction these ATMs are located. In case of WLAOs, the banks which are meeting their cash requirement shall furnish a separate statement on behalf of WLAOs on cash-out of such ATMs due to non-replenishment of cash. Such statements shall be submitted for every month within five days of the following month i.e., first such statement for the month of October 2021 shall be submitted on or before November 05, 2021 to the Issue Department concerned.

Quantum of Penalty

Cash-out at any ATM of more than ten hours in a month will attract a flat penalty of ₹ 10,000/- per ATM. In case of White Label ATMs (WLAs), the penalty would be charged to the bank which is meeting the cash requirement of that particular WLA. The bank, may, at its discretion, recover the penalty from the WLA operator.

Administration of the Scheme

The Scheme of Penalty will be administered by Issue Departments of the Regional Offices of the Bank. The Competent Authority to impose penalty will be the Officer-in-Charge of the Issue Department of the Regional Office under whose jurisdiction the ATMs are located. Appeal against the decision of the Competent Authority, if required, may be made by the banks/ WLAOs to the Regional Director/Officer-in-Charge of the Regional Office concerned, within one month from the date of imposition of penalty. As the intention of the Scheme is to ensure replenishment of ATMs in time, appeals would be considered only in cases of genuine reasons beyond the control of bank/ WLAOs such as, imposition of lockdown by the State/Administrative authorities, strike, etc.

Reserve Bank of India announces Digital Payments Index (RBI-DPI) for March 2021 Rises to 270.59

The Reserve Bank had earlier announced construction of a composite Reserve Bank of India – Digital Payments Index (RBI-DPI) with March 2018 as base to capture the extent of digitisation of payments across the country. The index for March 2021 stands at 270.59 as against 207.84 for March 2020, announced while launching the index on January 1, 2021.

The RBI-DPI index has demonstrated significant growth in the index representing the rapid adoption and deepening of digital payments across the country in recent years. The index series since its inception is as under:

Must Read: RBI Revises Regulatory Restrictions Related to Loans and Advances

RBI/2021-22/72

DOR.CRE.REC.No.33/13.03.00/2021-22

July 23, 2021

All Scheduled Commercial Banks (excluding RRBs)

All Small Finance Banks

All Local Area Banks

Madam / Dear Sir,

Loans and Advances – Regulatory Restrictions

Please refer to paragraphs 2.2.1.2, 2.2.1.4 and paragraph 2.2.1.5 of Master Circular on Loans and Advances – Statutory and Other Restrictions dated July 01, 2015.

  1. On a review, it has been decided that

i) For personal loans granted to any director of other banks, the threshold of Rupees twenty-five lakh, as mentioned in para 2.2.1.2, stands revised to Rupees five crore.

ii) Paragraph 2.2.1.4 has been revised as under –

Unless sanctioned by the Board of Directors/Management Committee, banks should not grant loans and advances aggregating Rupees five crore and above to –

(a) any relative other than spouse (spouse as specified in para 2.2.1.3 above) and minor / dependent children of their own Chairmen/Managing Directors or other Directors;

(b) any relative other than spouse (spouse as specified in para 2.2.1.3 above) and minor / dependent children of the Chairman/Managing Director or other directors of other banks*;

(c) any firm in which any of the relatives other than spouse (spouse as specified in para 2.2.1.3 above) and minor / dependent children as mentioned in (a) & (b) above is interested as a partner or guarantor; and

(d) any company in which any of the relatives other than spouse (spouse as specified in para 2.2.1.3 above) and minor / dependent children as mentioned in (a) & (b) above is interested as a major shareholder or as a director or as a guarantor or is in control.

Provided that a relative of a director shall also be deemed to be interested in a company, being the subsidiary or holding company, if he/she is a major shareholder or is in control of the respective holding or subsidiary company.

*including directors of Scheduled Co-operative Banks, directors of subsidiaries/trustees of mutual funds/venture capital funds.

iii) Paragraph 2.2.1.5 has been revised as under –

The proposals for credit facilities of an amount less than Rupees twenty-five lakh or Rupees five crores (as the case may be) to these borrowers may be sanctioned by the appropriate authority in the financing bank under powers vested in such authority, but the matter should be reported to the Board.

Explanation : For the purpose of this circular:

i) The term “personal loan” shall have the meaning assigned to it in the circular DBR.No.BP.BC.99/08.13.100/2017-18 dated January 04, 2018 on XBRL Returns – Harmonization of Banking Statistics.

ii) The term “major shareholder” shall mean a person holding 10% or more of the paid-up share capital or five crore rupees in paid-up shares, whichever is less.

iii) The term “control” shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in another manner.

Yours faithfully,

(Manoranjan Mishra)

Chief General Manager

Auction for Sale (Re-issue) of (i) ‘4.26% GS 2023’,(ii) ‘6.10% GS 2031’ and (iii) ‘6.76% GS 2061’

The Government of India (GoI) has announced the Sale (re-issue) of

(i) ‘4.26% Government Security, 2023’ for a notified amount of Rs 3,000 crore (nominal) through price based auction using uniform price method (ii) ‘6.10% Government Security, 2031’ for a notified amount of Rs 14,000 crore (nominal) through price based auction using uniform price method; and (iii) ‘6.76% Government Security 2061’ for a notified amount of Rs 9,000 crore (nominal) through price based auction using multiple price method. GoI will have the option to retain additional subscription up to Rs 6,000 crore against above security/securities. The auctions will be conducted by the Reserve Bank of India, Mumbai Office, Fort, Mumbai on Friday i.e. July 23, 2021.

Up to 5% of the notified amount of the sale of the Securities will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on July 23, 2021. The non-competitive bids should be submitted between 10.30 a.m. and 11.00 a.m. and the competitive bids should be submitted between 10.30 a.m. and 11.30 a.m.

The result of the auctions will be announced on July 23, 2021 (Friday) and payment by successful bidders will be on July 26, 2021 (Monday).

The Securities will be eligible for “When Issued” trading in accordance with the guidelines on ‘When Issued transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI/2018-19/25 dated July 24, 2018 as amended from time to time.