Jana Small Finance Bank launches operations

Jana Small Finance Bank launches operations
Jana Small Finance Bank announced the commercial launch of its banking operations to convert itself into a small finance bank (SFB), 3 years after the RBI gave its in-principle approval. The bank was earlier called Janalakshmi Financial Services and weathered huge losses on account of demonetization. Ajay Kanwal is managing director and chief executive officer of Jana Small Finance Bank.

RBI to launch new 100 rupee note

RBI to launch new 100 rupee note
The Reserve Bank of India (RBI) would soon issue new Rs 100 notes, with a base color of violet. According to the new policy on theme-based currency notes, the new Rs 100 note will have the impression of Gujarat’s Rani-ki-Vav (Queen’s stepwell). The new Rs 100 note will be slightly bigger than the Rs 10 note and weigh less than the old note & will be printed by Dewas-based Bank Note Press.

Chaturvedi: ICICI’s non-exec chairman

RBI has approved the appointment of Girish Chandra Chaturvedi as non-executive (part-time) Chairman of the ICICI bank till June 30, 2021. Girish Chandra Chaturvedi was previously the petroleum secretary. ICICI Bank announced that Kochhar has decided to go on leave till the completion of an external inquiry into the matter of lending loan to Videocon group.

Manufacturing sector records robust growth

RBI has revealed that India’s manufacturing sector recorded robust growth in sales and improvement in operating profit growth in the 4th quarter of the last fiscal. Companies posted sales of ` 9.25 lakh crore in the last quarter of 2017-18. Operating profit growth of the manufacturing sector improved despite increase in input costs, due to higher growth in value of production.

Forex reserve fell to 10.8 months

RBI in its biannual report announced that import cover of foreign exchange (Forex) reserve had fallen to 10.8 months in December. The Forex reserve is India’s holdings of cash, bank deposits, bonds denominated in currencies other than, the Indian rupee and managed by the RBI. Import cover is an indicator for currency’s stability, typically a 10 months cover is seen as stable for the economy.

Cryptocurrency transactions to be ceased

No transactions in cryptocurrencies will be made by the commercial banks from 6th July onwards as per the RBI directive. RBI had already barred all its regulated entities in order to curb money laundering and other financial irregularities and protect consumers. All the regulated entities have been given 3 months to exit their relationship with businesses and individuals.

YES Bank to launch Mutual Fund Business

Private lender YES Bank announced that it has received final regulatory approval from the Securities & Exchange Board of India (SEBI) to start mutual fund business. This approval is subsequent to the Reserve Bank of India’s (RBI) approval. YES Asset Management (India), a wholly owned subsidiary of YES Bank, will launch fund offerings across the spectrum in both debt and equity markets.

DBS Bank to launch subsidiary in India

DBS Bank of Singapore will launch its subsidiary in India in Oct 2018, the 2nd foreign bank in the country to convert its local operations. The bank has invested another ` 500 Cr in March 2018 to take the total capital in India to Rs 5000 Cr and plans to expand to 50 branches. State Bank of Mauritius was the 1st to open a local subsidiary after RBI came out with the regulations in 2013.

MK Jain takes charge as RBI deputy governor

M.K. Jain has assumed charge as the fourth Deputy Governor of the Reserve Bank of India (RBI).Jain has come in place of SS Mundra who retired last year. Jain was the MD & CEO of IDBI Bank before being appointed as Deputy Governor for a term of three years. The other 3 deputy governors are N S Vishwanathan, Viral V Acharya and B P Kanungo.

RBI revised Housing Loan limits

RBI revised the upwards housing loan limits under Priority Sector Lending (PSL). Housing loans of up to Rs 35 lakh for residences costing less than Rs 45 lakh will now be treated as PSL to give a boost to the low-cost segment. The housing loan limits for eligibility under priority sector lending will be revised to Rs 35 lakh in metropolitan centres and to Rs 25 lakh in other centres.

RBI alters ‘relative’ definition

The Reserve Bank of India (RBI) has narrowed the definition of relatives to check the flow of funds. Hence, funds under the ‘maintenance of close relative’ category can be sent only to immediate relatives such as parents, spouses, children and their spouses. This has brought about by defining ‘relatives’ under the Companies Act, 2013 instead of the same act of 1956.

Northeast India’s first small bank opened

Northeast India’s first small bank, North East Small Finance bank (NESFB) started its services. Rashtriya Gramin Vikas Nidhi (North East) Microfinance Limited received the Small Finance Bank License from the Reserve Bank of India (RBI) on March 31, 2017. Tata Trust chairman Ratan Tata and Assam’s finance minister Himanta Biswa Sarma launched the first 28 branches of the bank.

Low recoveries of NPAs: RBI data

13 : While public sector banks have claimed a ` 1,50,960 crore reduction in their non-performing asset levels over 2017-18, only 27% was actual recoveries, according to data provided by RBI Governor ` 1,50,960 crore reduction in their NPA levels from the start of financial year 2017-18 till December 31, 2017. NPA refers to loans or advances that are in default

Guidelines to enhance loan for large borrowers

In a move to enhance credit discipline among larger borrowers, the RBI proposed a “minimum level of loan component” of 40 percent for borrowers having an aggregate fund-based working capital limit of Rs. 150 crores and above from the banking system. It will be proposed to be effective from October 1, 2018. The 40 percent loan component will be revised to 60 percent from April 1, 2019.

RBI seeks update on payments data storage

The RBI have asked payment services firms to provide an update, on action taken by them to store transaction data in India, every fortnight. RBI wants payment system operators to store payment-related data in the country by October 2018. RBI had said that at present “only certain” payment system operators store the payment system data either partly or completely in the country.

Retail inflation jumped further in May

Retail inflation jumped further in May to a four-month high, primarily driven by a surge in energy prices, according to a Reuters. Economists, suggest more policy tightening from the central bank is coming. On June 6, RBI raised the repo rate for the first time since 2014, by 25 basis points to 6.25%, as recent data showed significant increases for both inflation and growth.

RBI to set up Public Credit Registry

In a bid to check loan defaults, RBI said that a Public Credit Registry (PCR) will be set up containing information on all borrowers to ensure financial stability. Following a report by Yeshwant M Deosthalee headed High Level Task Force, RBI said it has considered the recommendations and decided to set up a PCR. The PCR will serve as a registry of all credit contracts.

RBI tweaks norms to boost housing lending

The Reserve Bank of India (RBI) has increased the eligibility limit for a loan to classify as priority sector lending in a bid to boost affordable housing. The move is aimed at giving a fillip to low-cost housing for the economically weaker sections and lower income groups. For metropolitan areas, loan limits have been raised from ` 28 lakh to ` 35 lakh.

RBI hikes repo rate to 6.25%

The six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) increased the repo rate by 25 basis points to 6.25%. This is the first rate hike in four-and-a-half years; the last was in January 2014. The MPC arrived at the unanimous decision as the outlook for inflation had become ‘uncertain’ following a surge in international crude oil prices.

Mahesh Kumar appointed as Dy Governor of RBI

Mahesh Kumar Jain has been appointed as Deputy Governor of the Reserve Bank of India for a term of three years. Presently, he is the Managing Director and CEO of IDBI Bank. Before his role in IDBI, Jain was the Managing Director and Chief Executive Officer of Indian Bank. As per the RBI Act, the central bank should have four deputy governors.

RBI’s Monetary Policy Committee began meeting

RBI’s Monetary Policy Committee headed by RBI Governor Urjit Patel began its 3-day meeting in Mumbai on June 4. Due to certain administrative exigencies, the six-member committee is meeting for three days instead of the usual two days. It was in January 2014 that the RBI had last raised the short-term lending rate to 8% since then it has either reduced it or maintained status quo.

RBI appoints Sudha as its first CFO

National Securities Depository Limited (NSDL) executive Sudha Balakrishnan has been appointed as the first chief financial officer (CFO) of the Reserve Bank of India (RBI). Balakrishnan, a chartered accountant, was until recently a vice-president at the NSDL, India’s first and largest depository. She will be the 12th executive director at RBI, and will serve a three-year term.

Bank credit grows 12.64%, deposits at 7.61%

According to an RBI data, Banks’ credit grew by 12.64% year-on-year to ?85,51,099 crore in the fortnight ended May 11, 2018. Banks’ deposits grew by 7.61% to ?1,13,92,165 crore in the fortnight ended May 11, 2018, compared with ?1,05,86,083 crore in the fortnight ended May 12, 2017. Bank credit is the aggregate amount of credit available to a person or business from a banking institution.

RBI slaps fine on South Indian Bank

The Reserve Bank of India (RBI) has slapped a penalty of ` 50 million on South Indian Bank Limited for non-compliance with the directions issued by it. The non-compliance pertains to Income Recognition and Asset Classification (IRAC) norms, Know Your Customer norms and treasury function. Further, the bank is also pulled up for deficiencies in its compliance function and compliance culture.

RBI eases setting up of IFSC Banking Units

RBI modified the norms for setting up IFSC Banking Units. In April 2015, the Reserve Bank had formulated a scheme for setting up of International Financial Services Centres (IFSC) Banking Units (IBUs) by banks in IFSCs. To enable IBUs to start their operations, the parent bank will be required to provide a minimum capital of USD 20 million. The government has set up an IFSC in Gujarat.

RBI issues guidelines on NSFR

18 : The RBI issued detailed Net Stable Funding Ratio (NSFR) guidelines to ensure that banks maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities. The guidelines on NSFR are in line with global norms prescribed by the Basel Committee. The NSFR would be applicable for Indian banks at the solo as well as consolidated level.

Lending, deposit curbs on Allahabad Bank

RBI has imposed restrictions on Allahabad Bank, including on expansion of risky assets, creation of non-banking assets and accessing/renewing wholesale/costly deposits. RBI has also asked the bank to reduce exposure to unrated and high-risk advances. The RBI directive comes in the wake of the bank’s common equity tier-1 breaching the minimum regulatory requirement of 7.37% in March 2018.

RBI puts Dena Bank under corrective action

RBI has initiated prompt corrective action against Dena Bank in view of high non-performing assets, restricting the bank from giving new loans & new hiring. Prompt Corrective Action comes after Dena Bank posted a loss for the third year in a row with net NPA’s close to 12%. Though several banks are under the PCA framework currently, Dena Bank is the first lender to have fresh lending curbed.

New monetary limits for public sector banks

Monetary threshold for public sector banks to report frauds to departments of CBI for a probe has been revised.Frauds of min. Rs 3 cr & to Rs 25 cr have to be reported to either CBIs Anti-Corruption Branch or to Economic Offences Wing.According to RBI, cases of frauds involving more than Rs 25 cr & up to Rs 50 cr should be given to CBIs Banking Security & Fraud Cell.

RBI announced Rs.10,000 crore bond purchases

The Reserve Bank of India has announced that it would buy Rs. 10,000 crore of government bonds via Open Market Operation (OMO). The move could bring some relief to the bond market which is reeling under the pressure of rising yields despite a slew of regulatory measures. Since the start of 2018, the yield on the 10-year benchmark bond has gained 40 basis points to 7.73%.

RBI allowed FPIs to invest in treasury bills

Easing foreign investment rules, the RBI on 1st May permitted Foreign Portfolio Investments (FPIs) to invest in treasury bills issued by the Central Government. The RBI also asked the FPIs to bring down their total exposure in debt instruments (G-secs or corporate bonds). Treasury Bills are short term (up to one year) borrowing instruments of the Government & they are auctioned by RBI.

India to grow at 7.5% in 2018-19

According to a Deutsche Bank report, the Indian economy is likely to clock a GDP growth of 7.5% this financial year.The report noted that higher global oil prices, risk of an earlier than anticipated rate hike cycle from RBI are some of the factors that pose downside risk to its baseline GDP estimate. According to the report, a $10 increase in oil prices can shave off growth by about 10 bps

RBI liberalized ECB norms

RBI has further liberalized norms for external commercial borrowing that will allow Indian companies to access cheaper funds from overseas markets.According to new norms, RBI has stipulated a uniform all in cost ceiling of 450 bps over benchmark rate.RBI also decided to increase the ECB Liability to Equity Ratio for ECB raised from direct foreign equity holder under automatic route to 7:1.

RBI eases rules for foreign investors

RBI has removed the restriction that limited foreign investors to only investing in government and corporate bonds with tenures of three years or more.This decision can bolster the domestic bond market. The move comes after weak investor interest in two recent auctions that led to a spike in sovereign debt yields.

Repo in corporate debt securities

Bombay stock exchange has received approval from RBI and Sebi to launch repo in corporate debt securities. Corporate bond repo is where a firm or a bank pledges corporate bonds with another company or lender to garner funds. The corporate repo debt will be launched in 2 models – Basket repo with settlement guarantee and Special repo without settlement guarantee.

SBI allows cash withdrawl at PoS Terminals

To beat the cash crunch, SBI is allowing debit cardholders withdraw money from its Point of Sale terminals without any charges.According to RBI, a customer can withdraw Rs 1,000 in tier 1 & 2 cities, whereas Rs 2,000 can be withdrawn in tier 3 to tier 6 cities per day per card. SBI has over 6 lakh PoS machines of which nearly 5 lakh machines are enabled to dispense cash to its customers.

RBI imposed restrictions on City Co-operative

RBI has placed restrictions on business activities of City Co-operative Bank till such time as its financial position improves.Customers of the bank will not be allowed to withdraw more than Rs 1000 of the total balance held in their accounts. Bank will have to take prior approval from RBI before it can disburse loan, make any investment, borrow funds or accept new deposit.

RBI imposes Rs 30 million fine on IDBI Bank

The Reserve Bank of India (RBI) has imposed a Rs 3 crore penalty on IDBI Bank for not following the central bank’s rules on classification of loans.IDBI bank did not adhere to RBI’s norms on Income Recognition and Asset Classification. RBI said that this action is based on deficiencies in regulatory compliance.

RBI keeps interest rates unchanged

The Reserve Bank of India (RBI) on 5th April kept the repo rate and reverse repo rate unchanged at 6 percent and 5.75 percent respectively.The real Gross Domestic Product growth in FY19 is seen at 7.4 percent as against 6.6 percent in FY18. The RBI revised CPI inflation projection for 2018-19 to 4.7-5.1% in the first half of the financial year and 4.4% in the second half.

RBI switches back to GDP model

The RBI switched back to the gross domestic product (GDP)-based measure to offer its growth estimates from the gross value added (GVA) methodology.The Government had started analysing growth estimates using GVA methodology from January 2015 and had also changed the base year to 2018 from January. The GDP model gives the picture from the consumers’ side or demand perspective.

RBI bars banks from crypto services

RBI directed all regulated entities including banks not to provide services to businesses dealing in virtual currencies like bitcoins, so as to protect consumers and check money laundering.The RBI asked entities, which are already into such services to stop providing this kind of services within three months. The RBI has directed all payment system operators to store all data within India.

IndusInd Bank got RBI nod to acquire IL&FS

Private sector lender IndusInd Bank has received RBI’s approval to buy the securities services arm of IL&FS.In March 2017, the bank entered an agreement with Infrastructure Leasing and Financial Services (IL&FS) to acquire 100% stake in ISSL. Infrastructure Leasing and Financial Services (IL&FS) is the promoter shareholder of IL&FS Securities Services Ltd (ISSL).

Jio Payments Bank began operations

The Reserve Bank of India (RBI) said that Jio Payments Bank has commenced its banking services.Reliance Industries Ltd (RIL) was one of the 11 applicants which were issued the in-principle approval for setting up a payments bank in August 2015. Telecom major Bharti Airtel was the first to begin payment bank services in November 2016.

India’s first blockchain implemented

The platforms—RXIL, A.TReDS and M1xchange—approved by the RBI had been set up to bring together buyers, sellers and financiers for discounting the MSME invoices and provide them with timely funding.This is billed as India’s first live blockchain implementation in the enterprise financial segment.US-based MonetaGo has designed and implemented the production solution.

RBI changes methodology for bond valuation

To prevent the possibility of manipulation in the prices of securities, especially government securities, the RBI has changed the methodology used by debt market players for their valuation.Security/bond valuation will be based on the weighted average price of the last half-an-hour of trading. The methodology as to how the bonds are valued is crucial for mark-to-market purposes.

Fino Payments to set up Android-based mPOS\

Fino Payments Bank plans to set up multi-utility Android-based mPOS devices across 10,000 banking points throughout the country in a phased manner. The move is aimed at eliminating the inconvenience of carrying multiple devices by the representatives leading to improved services to customers. Fino which was a remittance service provider received authorization from RBI to operate as a bank.

RBI slaps Rs.58.9 cr fine on ICICI Bank

RBI has imposed a penalty of Rs 58.9 crore on ICICI Bank for failure to adhere to held-to-maturity (HTM) guidelines. This is the highest penalty imposed by RBI on a bank for a single incident. Under RBI guidelines banks have to split their holding of government securities into `held-to-maturity‘ (HTM) and available for `available-for-sale‘ category.

UCO Bank to merge branches in Hong Kong

Following RBI‘s ban on letters of undertaking, UCO Bank is planning to merge its two branches in Hong Kong. The ban on LoUs has affected the business of foreign branches & the bank says one branch is enough to cater for customers‘ needs. With almost zero capital needed for opening a branch in Hong Kong, the country has the 2nd highest number of foreign branches by Indian banks after the UK.

RBI discontinues LOUs/LOCs issuance

The Reserve Bank of India (RBI) has scrapped the issuance of Letters of Undertaking (LOUs) and Letters of Comfort (LOCs) for trade credit for imports with immediate effect. Banks will continue to issue guarantees and letter of credit for trade purposes which are the international norm. A letter of credit is secure because it has the details of the expiry date and the material purchase.

Airtel Bank fined 5 crore by RBI

The Reserve Bank of India (RBI) has imposed a fine of Rs 5 crores on Airtel Payments Bank for flouting Know Your Customer (KYC) norms and operating guidelines. Airtel Payments Bank had opened customer accounts without a clear/specific consent of the customers. Know your customer is the process of the banks identifying and verifying the identity of its account holders.

RBI imposes penalty on SBI

The Reserve Bank of India has imposed a monetary fine of Rs 40 lakh on the country‘s biggest lender the State Bank of India over counterfeit notes. After Inspection RBI found a violation of its instructions issued on the detection and impounding of counterfeit notes. The RBI had imposed a fine on Axis Bank and Indian Overseas Bank for not complying with the ‘known your customer’ regulations

RBI tightens PSL norms for banks

RBI has tightened priority sector lending norms for foreign banks by directing them to create sub-targets so that they lend a portion of their loans to small & marginal farmers as well as MSMEs. Move is directed at foreign banks with over 20 branches & will come into force from next financial year. PSL norms mandate foreign banks to lend 40% of their total loan book to the priority sector.

Public banks’ staff involved in 2450cr frauds

Over 1,200 Public Sector Bank frauds cumulatively worth Rs.2,450 crore were carried out across India with the help of bank staff between April 2013 to June 2016, RBI data has revealed. Tamil Nadu, Andhra Pradesh, Karnataka and Maharashtra witnessed the most number of cases. The highest amount of money was swindled in Rajasthan, Chandigarh, Delhi and West Bengal.

RBI lifts per-borrower loan cap for MSMEs

3 : RBI has decided to do away with the per borrower loan limits to Micro/ Small and Medium Enterprises for classification under priority sector lending. In view of the increasing importance of the services sector and to encourage banks to lend more to this sector. So far, loans to Micro/ Small and Medium Enterprises up to ` 5 crore and ` 10 crore, respectively, were classified as PSL.

RBI launches Ombudsman Scheme for NBFCs

The RBI launched ‘Ombudsman Scheme’ for redressal of complaints against NBFCs.“The scheme will provide a cost-free and expeditious complaint redressal mechanism relating to deficiency in the services by NBFCs covered under the Scheme,” the central bank said. The offices of the NBFC ombudsmen will function at 4 metro centres – Chennai, Kolkata, Mumbai and New Delhi.

Panel to look into factors leading to frauds

RBI has set up a panel under board member Y.H. Malegam, a former president of Institute of Chartered Accountants of India, to look into factors leading to increasing incidents of bank frauds.The Maelgam panel will also look into reasons for high divergence in NPA classification and provisioning by banks. The move comes a week after PNB said it has fallen victim to a Rs. 11,400 crore fraud.

PhonePe partners with IOCL

PhonePe has partnered with Indian Oil Corporation Limited for adoption of its indigenously-designed Point of Sale device at IOCL retail outlets.Customers can now pay using UPI, credit & debit cards, PhonePe wallet & other wallets for their fuel purchases, through PoS device at IOCL retail outlets in Bengaluru. PhonePe received its RBI licensing in Aug 2014 & was later acquired by Flipkart.

Fairfax to acquire 51% stake in CSB

Canadian investor Prem Watsa’s owned Fairfax Holdings will buy a 51% stake in Kerala-based Catholic Syrian Bank.The deal, if it materialises, will be the first takeover of an Indian bank by a foreign non-banking financial entity after RBI tweaked ownership norms last May. Founded in 1921, CSB has a strong base in Kerala & a significant presence in Tamil Nadu, Karnataka & Maharashtra.

‘New RBI norms to spur surge in NPAs’

RBI’s new norms could result in a jump in bad loans, according to Moody’s unit ICRA.The RBI said that for accounts where a bank’s exposure exceeds Rs. 2,000 crore, a resolution plan must be implemented within 180 days from the date of first default. In case a resolution is not implemented, lenders should file an insolvency petition within 15 days of the expiry of the 180 days.

Can’t buy cryptocurrencies from card: Citibank

Citibank India has banned the use of its credit and debit cards towards purchase or trading of cryptocurrencies like Bitcoin.It said the decision came following concerns expressed by the RBI regarding potential risks associated with cryptocurrencies. The govt had said it will take all measures to eliminate use of cryptocurrencies in illegitimate activities but did not declare them illegal.

NITI bats for separate debt office in India

NITI Aayog Vice-Chairman Rajiv Kumar made a strong case for setting up an independent debt management office, saying better servicing of loans could lead to substantial reduction in India’s interest payments.At present, the government debt is managed by the RBI. The interest payment on the public debt is estimated to rise from Rs 5.3 lakh crore in 2017-18 to Rs 5.75 lakh in 2018-19.

RBI To Set Up Ombudsman For NBFCs

The Reserve Bank of India announced setting up ombudsman for addressing customer grievances in the non-banking finance companies.The rules will be laid out by the end of February 2018. RBI will start with deposit-taking NBFCs and widen the scope to cover NBFCs with asset size of Rs 100 crore.There are around 20 banking ombudsmen have been appointed with offices mostly in state capitals.

RBI keeps repo rate unchanged at 6%

The RBI has kept the repo rate, the rate at which banks borrow from RBI, steady at 6% for the third time in a row during its sixth bi-monthly monetary policy review.This comes after retail inflation in December rose to a 17-month high of 5.21%.The RBI last cut the rate by 25 basis points in August last year.

RBI To Link Base Rate With MCLR

The Reserve Bank of India will link the base rate with the MCLR from 1st of April 2018 to ensure expeditious transmission of its policy rate to borrowers.The RBI had introduced the MCLR system with effect from 1st April 2016, the Central bank observed that a large proportion of bank loans continue to be linked to Base Rate.Urjit Patel is the Governor of RBI.

67 FDI proposals worth cleared in Apr-Dec

Union Minister P Radhakrishnan has said the government has cleared 67 Foreign Direct Investment (FDI) proposals worth ?11,703 crore during the first nine months of this fiscal.Mauritius was the largest source of FDI in India in 2016-17, according to an RBI census.Further, the government has now cleared a proposal allowing 100% FDI in single-brand retail via automatic route.

Average inflation dips to 6 year low

The Economic Survey said the average retail inflation has declined to a six-year low of 3.3% in 2017-18.“Controlling inflation has been a priority area for the central government,” the survey said. CPI based headline inflation, factored in by RBI while arriving at its bi-monthly monetary policy, averaged 3.3% during the period which “is the lowest” in the last six financial years.

Allahabad Bank to issue shares

Allahabad Bank has became the 1st public sector lender to offer an employee stock option scheme, under which it will offer 5 crore ordinary shares to its staff.Proceeds from share sale will be used to raise core capital of the bank which has long ago been placed under prompt corrective action by RBI. Bank may issue shares in 1 tranche & will complete the transactions in this financial year.

IMF and World Bank commend RBI

IMF & WB have commended RBI for remarkable progress in strengthening banking supervision system.Report providing Detailed Assessment of Observance-Basel Core Principles noted that supervision & regulation by RBI remain strong & have improved in recent years. It also acknowledged that banking reforms including Indradhanush Plan & Bank Board Bureaus have helped usher in an era of transparency

New Rs 10 note to be issued by RBI

According to reports, the Reserve Bank of India is all set to issue new Rs 10 notes under the Mahatma Gandhi series with chocolate brown colour as the base.According to News18, around 1 billion pieces of the new 10 rupee note has already been printed by the apex bank.In August, 2017, new Rs 50 and Rs 200 notes were introduced in the Mahatma Gandhi series.

RBI bonds scheme not closed: FinMin

The Finance Ministry said RBI Bonds Scheme has not been closed but the interest rate on such papers lowered to 7.75 percent.These taxable bonds are meant for individual other than Non-Resident Indians with no maximum limit for investment.In 2003, the government came out with bonds offering 8 percent interest to encourage retail investors to invest.

Crisil’s index to track FPI investment

Rating agency Crisil launched an index to measure the performance of investments of foreign portfolio investors in the fixed-income market.Crisil FPI index would serve as benchmark for the performance of FPI investments in government securities.The index holds significance owing to the current tilt of FPIs towards fixed-income securities and recent enhancement of investment limits by RBI.

Govt. injects funds into 6 public banks

Centre has pumped in capital of Rs.7,577 crore in various weak public sector banks.This capital infusion would help banks shore up their capital adequacy as they close the books for Dec quarter.Govt released Rs. 2,257 crore to BOI, while IDBI Bank was infused with Rs. 2,729 crore.All these banks are saddled with huge NPA & are under the prompt corrective action framework of RBI.

RBI puts BoI under PCA

After an on-site inspection, RBI has put Bank of India under the PCA framework.This action will contribute to the overall improvement in risk management, asset quality, profitability, efficiency, etc of the bank.To ensure that banks don’t go bust, RBI puts in place some trigger points to assess, monitor, control and take corrective actions. These are known as Prompt Corrective Action.

RBI imposes penalty on Syndicate Bank

RBI has imposed a penalty of Rs 5 crore on Syndicate Bank for non-compliance with its directions on “Cheque Purchase or Discounting, Bill Discounting, and KYC norms.The penalty was imposed by RBI after considering the bank’s reply and oral submissions made in the personal hearing. Earlier, RBI had penalised Union Bank of India Rs 2 crore for non-compliance of KYC norms.

Sovereign Gold Bond Scheme 2017-18

Government of India, in consultation with the Reserve Bank of India, had floated Series III of Sovereign Gold Bonds 2017-18, for a period from October 09, 2017 to December 27, 2017.The Bonds will be issued on the succeeding Monday after each subscription period.A Sovereign Gold Bond is a government issued security which represents a certain weight of gold.

RBI imposes penalty on IndusInd Bank

RBI has imposed a penalty of Rs 3cr on IndusInd Bank for deficiencies in regulatory compliance. Penalty is imposed for non-compliance with directions on Income Recognition & Asset Classification norms & contravention of regulatory restrictions pertaining to non- fund based facilities(NFB).A notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it

OBOPAY gets a Prepaid Instrument License

OBOPAY, global mobile payment solutions company has secured a license for Prepaid Payment Instrument from RBI to operate a semi-closed loop wallet in India. Company will be using the license in propelling the business in its B2B operations by co-branding the prepaid instrument with a partner brand.Using the licence, OBOPAY will solve various payment related problems for their partner clients

Restrictions on Corporation Bank

RBI has imposed certain restrictions on Corporation Bank on carrying out banking activities in view of high non-performing loans and requirement to raise capital.Corporation Bank’s net non-performing loans cross 10% & it reported losses of Rs 1035 crore in the 2nd quarter ending 2017. This makes Corporation Bank eighth bank to face restriction in a span of 10 months.

RBI raises FPI limit in G-Secs

RBI has increased the limits for investment by foreign portfolio investors for Jan-March 2018 quarter by Rs.6,400 crore in Central Govt Securities &Rs.5,800 crore in State development loans. Revised investment limit for FPIs in G-Secs will be Rs.2,56,400 while investment limit in SDLs will be Rs.45,100 crore. Within SDLs, the general investment limit has been enhanced by Rs.1,500 crore to Rs.31,500 crore

SBI changes name, IFSC codes of branches

Post merger of its 5 associates, SBI has changed names & IFSC codes of nearly 1,300 of its branches.The Bank has changed names & IFSC codes of branches located Mumbai, New Delhi, Bengaluru, Chennai & Kolkata and others.Indian Financial System Code (IFSC) is an 11-digit alpha-numeric code used to uniquely identify all bank branches participating in any RBI regulated funds transfer system.

Shankar appointed RBI Executive Director

Uma Shankar, chief general manager (CGM) in charge of RBI’s financial inclusion and development department has taken over as executive director.Shankar has been elevated after Meena Hemchandra the executive director in charge of the central bank’s supervision department retired at the end of November.Shankar is most likely to take charge of the supervision department of the central bank

Axis Securities gets NCDEX membership

Axis Securities has become the 1st broking arm of a bank to take membership of a commodity exchange by registering itself with NCDEX.In Sept, RBI allowed banks wishing to undertake commodities derivatives clearing to set up a separate subsidiary for the purpose & adhere to norms laid by SEBI.Trading volume in commodity exchange is expected to increase with wide reach of banks broking firms

RBI to rationalise MDR

RBI has decided to rationalise charges on debit card transactions based on the category of merchants with a view to giving “further fillip” to digital payments.It is aimed at the twin objectives of increased usage of debit cards and ensuring sustainability of the business for the entities involved.MDR is the rate charged to a merchant by a bank for providing debit and credit card services.

RBI keeps key policy rate unchanged

6 : RBI’s monetary policy committee has kept its key policy rate unchanged at 6% in its 5th bi-monthly policy review of the fiscal year.The policy rate still stands at a 7 year low. The committee had last cut the key lending rate by 25 basis points in August this year.The RBI also maintained its projection for FY18 real GVA growth at 6.7%, saying the risks are evenly balanced.

Patel appointed to BIS Advisory Board

17 : RBI Governor Urjit Patel was appointed to the Financial Stability Institute Advisory Board of the Bank of International Settlement. Bank of International Settlement is a global financial organisation owned by major central banks from across the world. The Financial Stability Institute of the BIS assists financial sector authorities worldwide in strengthening their financial systems.

Not to pursue Islamic banking in India

RBI has decided not to pursue a proposal for introduction of Islamic banking in the country. Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam. Taking into account, wider & equal opportunities available to all citizens to access banking & financial services, RBI has decided not to pursue the proposal further.

Federal Bank gets RBI nod to open office

Federal Bank has obtained RBI approval to open representative offices at Kuwait and Singapore. With the opening of these offices, the Bank will be able to widen its services to NRI diaspora and also enhance the international visibility of the Bank. The bank has been the preferred banker for NRIs and the NRI friendly measures have resulted in increasing inflow of foreign remittances.

New outsourcing norms for NBFC

RBI issued a notification outlining norms for outsourcing of functions by Non-Bank Financial Institution. As per the new norms, NBFCs cannot outsource core management functions like internal audit, management of investment portfolio, strategic and compliance functions for know your customer norms and sanction of loans. All NBFCs’ have been directed to set up a grievance redressal machinery.

Banking Services at home for 70+ people

Reserve Bank of India has asked banks to provide doorstep banking facilities to senior citizens of more than 70 years of age and differently-abled persons including the visually-impaired. The facilities include basic banking services like pick-up of cash, delivery of demand drafts, chequebooks and submission of KYC documents. These instruction are to be implemented by December 31, 2017.

20-digit Legal Entity Identifier code

RBI issued a notification, directing corporate borrowers having exposure of Rs 5 crore and above to mandatorily obtain 20-digit Legal Entity Identifier. LEI is a 20-digit global reference number that uniquely identifies every legal entity that is party to a financial transaction. Global Legal Entity Identifier Foundation is the entity tasked to support the implementation and use of LEI.

AU Small Finance Bank to be SC Bank

AU Small Finance Bank has received an approval from RBI to operate as Scheduled Commercial Bank. On acquiring the status of Scheduled Commercial Bank, AU Small Finance Bank will now be able to do borrowing and lending with RBI under Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF). Now, it can even issue Certificate of Deposits (CDs) at competitive interest rates.

Penality on Yes Bank and IDFC Bank

RBI has imposed penalties on two private sector banks, Yes Bank & IDFC Bank for regulatory violations. Monetary penalty has been imposed for non-compliance of RBI’s guidelines on Income Recognition Asset Classification & delayed reporting of information security incident involving ATMs of the bank. Last year, data of over 32 lakh debit cards of Yes Bank was suspected to have been compromised

NE Small Finance Bank starts operations

North East Small Finance Bank Limited has commenced operations as a small finance bank. Guwahati-based RGVN (North East) Microfinance Limited, got RBI in-principle approval for setting up a small finance bank in September 2015. Small finance banks are a type of niche banks that have been set up with an objective to further financial inclusion.

Sovereign Gold Bond Scheme – Series III

Government of India has decided to issue Sovereign Gold Bonds 2017-18 – Series III. These bonds will be issued by RBI. Applications for the bond will be accepted from October 09, 2017 to December 27, 2017. The Bonds will be issued on the succeeding Monday after each subscription period. The Sovereign Gold Bonds Scheme was first announced in Union Budget 2015-16.

RBI opens branch in Dehradun

RBI opened a branch in the Dehradun to make transactions of the government more convenient. Uttarakhand CM Trivendra Singh Rawat said it was an important step which will speed up the economic development of the state besides making financial transactions of the government more convenient. Earlier, the state government had to do financial transactions through the Kanpur branch of the RBI.

RBI lowers growth forecast to 6.7%

At the fourth bi-monthly policy review, the Reserve Bank kept interest rate unchanged even as it cut the growth forecast to 6.7 per cent for the current fiscal. Consequently, the repo rate, at which it lends to banks, will stand at 6 per cent. The reverse repo, at which RBI borrows from banks will continue to be at 5.75 per cent.

RBI increases foreign investor limits

RBI has increased foreign portfolio investors’ investment limits in central & state govt securities by an aggregate
Rs. 14,200 cr for Oct-Dec period. Limits for investment by FPIs for Dec quarter have been increased by Rs. 8,000 cr in Central govt securities & by Rs. 6,200 cr in state development loans. After the expansion, the total investments permissible in G-secs now stand at Rs. 2,50,000 Cr.

RBI to sell sovereign bonds

Reserve Bank of India would sell govt bonds worth Rs. 10,000 crore through Open Market Operations to mop up liquidity from the system. As part of the OMO, the RBI will sell government securities maturing in 2019, 2021, 2022, 2024, & 2030. Open market operations refer to buying & selling of govt securities in open market in order to expand or contract the amount of money in the banking system.

RBI caps bank investments

RBI has capped bank investments in private equity funds at 10% while completely prohibiting investments into hedge funds. RBI also permitted banks’ subsidiaries to provide commodity broking services and be a professional clearing member which are subject to risk control measures. Banks can offer broking services to clients on Sebi registered commodity exchanges like MCX & NCDEX.

RBI eases foreign investment rules

RBI has eased rules governing foreign investment in corporate bonds by excluding rupee-denominated securities from its overall debt limit The move potentially freed up 440bn rupees of debt available to offshore investors. Rupee-denominated bonds known as masala bonds will now come under rules for external commercial borrowings.