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Tag: RBI

  • All About Unified Lending Interface That RBI Is Planning To Launch –Will It Be Similar To UPI? | Personal Finance News

    New Delhi: The Reserve Bank has announced that it will launch Unified Lending Interface (ULI), a platform to ensure a smooth credit flow, particularly for smaller and rural borrowers. According to RBI Governor Shaktikanta Das, the ULI will revolutionize the financing landscape in India. The ULI is anticipated to be launched nationally in due course.


    What is Unified Lending Interface?

    Developed by the Reserve Bank Innovation Hub (RBIH), the ULI will enable the smooth and consent-based transfer of digital data, including land records of various states, from multiple data service providers to lenders. 

    The central bank launched the pilot of a technology platform last year that allows for frictionless credit in two states. This will now be known as ULI.


    ULI to cut the time taken for credit appraisal

    The ULI will shorten the credit appraisal process, particularly for rural and smaller borrowers. To provide digital access to information from various sources, the ULI architecture features standardized and shared APIs for a ‘plug and play’ approach. This lessens the complexity of several technical interfaces and gives borrowers the benefit of smooth credit delivery and faster turnaround times without necessitating a lot of paperwork.


    ULI to cater to large unmet demand for credit

    The ULI is projected to provide a significant unmet demand for credit across several sectors, especially for agricultural and MSME borrowers, by digitizing access to the customer’s financial and non-financial data that was previously stored in separate silos.

    ULI to transform the lending space in India

    The ULI is anticipated to be launched nationally in due course and is expected to revolutionize the lending landscape in India, much like UPI revolutionized the payments ecosystem, says Das.


    Challenges with digital lending

    There would be difficulties and potential trade-offs in actually implementing interoperability, Das believes. The application of common (international) technical standards can help overcome technological obstacles. Finalizing the governance structure or management framework would also be necessary for long-term viability.


    How is ULI different from UPI?

    Unified Payments Interface (UPI) is a real-time payment system launched by the National Payments Corporation of India (NPCI) in April 2016. Under the Reserve Bank’s guidance, banks promoted the NPCI. It has played a significant role in the expansion of digital retail payments in India. Whereas, Unified Lending Interface is a platform designed to ensure a smooth flow of credit, especially for smaller and rural borrowers.

    Das believes that India’s journey towards digital infrastructure will take a dramatic turn with the introduction of the “new trinity” of JAM-UPI-ULI.

  • Indian Small Finance Banks To Grow Their Advances 25-27 Per Cent This fiscal: Report | Economy News

    New Delhi: Segmental and geographical expansion, underpinned by a strong and increasing presence in semi-urban and rural markets with large unmet demand, will continue to drive growth for small finance banks (SFBs) in India this fiscal, a report showed on Monday. SFBs are expected to grow their advances by a robust 25-27 per cent this fiscal, according to a CRISIL Ratings report.

    These banks are approved by the Reserve Bank of India (RBI), to further financial inclusion by primarily extending basic banking services to unserved and underserved sections, which include small and marginal farmers, small business units, micro and small industries and unorganised entities.

    Amid challenges in mobilising deposits and their higher cost, SFBs are likely to explore alternative, non-deposit avenues to fund credit growth. That said, capital buffers to support growth remain healthy for SFBs, the report mentioned.

    “Credit growth in new asset classes is seen at 40 per cent this fiscal, while that in traditional segments will be 20 per cent. With this, the portfolio mix will continue to shift. The share of new segments would cross 40 per cent by March 2025, twice the March 2020 level,” said Ajit Velonie, senior director, CRISIL Ratings.

    Most of this diversification is towards secured asset classes, resulting in the share of secured lending rising, albeit at a moderate pace, he informed. The estimated credit growth can be divided into two segments — traditional and new, with the latter driving the momentum.

    The report mentioned that the constituents of new asset classes may vary across SFBs depending on their original segment focus, but would typically include mortgage loans, loans to MSMEs, vehicle loans and unsecured personal loans.

    In terms of geographical penetration, the SFB branch network more than doubled over the five years to 7,400. Deposit growth, at 30 per cent in fiscal 2024 outpaced credit growth, in contrast to the overall banking sector.

    “To optimise deposit mobilisation, the reliance on term deposits will continue, given the higher opportunity cost to maintain CASA balances for depositors in the current interest rate scenario,” the report said.

    According to Subha Sri Narayanan, Director, CRISIL Ratings, SFBs will need to explore alternative funding routes to balance growth and funding cost, especially given the growing share of lower-yielding secured assets. 

  • IndusInd Bank Shares Up 2.6 Per Cent, Lender Received RBI Approval For AUM Business For Mutual Funds | Economy News

    New Delhi: The shares of IndusInd bank surged more than 2.67 per cent after the bank received approval from the Reserve Bank of India (RBI) to establish a wholly-owned subsidiary for undertaking the asset management business of Mutual Funds, the bank informed the exchange in a filing.

    The approval was communicated to the bank via a letter dated August 19, 2024. It also marks a significant step in the bank’s strategic expansion into the asset management sector.

    “This is to inform that the Reserve Bank of India vide letter dated August 19, 2024, has accorded its approval to the Bank for setting up a wholly owned subsidiary to undertake asset management business of Mutual Fund along with infusing equity capital in the said asset management subsidiary, subject to the additional conditions as set out in the said letter” said the Bank.

    According to the information by the bank as part of this initiative, IndusInd Bank is also authorized to infuse equity capital into the new asset management subsidiary. This move aligns with the bank’s broader goal of diversifying its financial services portfolio and enhancing its presence in the asset management domain, a sector experiencing robust growth in India.

    However, the RBI’s approval is accompanied by certain additional conditions, which the bank is required to adhere to, though the specifics of these conditions have not been disclosed.

    The establishment of the asset management subsidiary will allow IndusInd Bank to directly manage and offer a variety of mutual fund products, providing a comprehensive suite of investment options to its customers.

    The share of IndusInd Bank was trading at Rs 1383 after surging Rs 35 at the time of filing this report. 

  • New RBI Rules On Premature Withdrawal For NBFC Depositors: All You Want To Know | Personal Finance News

    New Delhi: The RBI on has issued revised guidelines for housing finance companies (HFCs) and Non-Banking Financial Companies (NBFCs) regarding Acceptance of Public Deposits.

    “Accordingly, based on a review of the extant regulations applicable to HFCs prescribed vide Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021, it has been decided to issue revised regulations as detailed in the Part A of Annex. As part of the exercise, certain regulations applicable to NBFCs have also been reviewed and revised regulations are detailed in Part B of Annex. The revised regulations shall be applicable with effectfrom January 01, 2025,” the RBI issuing the Review of regulatory framework for HFCs and harmonisation of regulations applicable to HFCs and NBFCs said on August 12.
     
    Here’s All You Want To Know About The Revised RBI Guidelines Regarding The Acceptance Of Public Deposits For NBFCs.

    – RBI said, attention is invited to chapter V of Master Direction – Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016. It has been now decided that for a non-banking financial company not being a problem Non-Banking Financial Company6, in order to meet certain expenses of an emergent nature, subject to the satisfaction of the NBFC concerned about such circumstances–

    – Tiny deposits may prematurely be paid to individual depositors, at the request of the depositor, before the expiry of three months from the date of acceptance of such deposits, in entirety, without interest. Tiny deposit means the aggregate amount of public deposits not exceeding Rs 10,000/- standing in the name of the sole or the first named depositor in the same capacity in all the branches of the non-banking financial company.

    – In case of other public deposits, not more than fifty per cent of the amount of the principal sum of deposit or Rs 5 lakh, whichever is lower, may be prematurely paid to individual depositors, at the request of the depositors, before the expiry of three months from the date of acceptance of such deposits, without interest; the remaining amount with interest at the contracted rate shall be governed by the provisions of the extant directions as applicable for public deposits

    – Provided that in cases of critical illness, hundred per cent of the amount of the principal sum of deposit, may be prematurely paid to individual depositors, at the request of the depositors, before the expiry of three months from the date of acceptance of such deposits, without interest.

    a. For this purpose, expenses of an emergent nature include medical emergency or expenses due to natural calamities/ disaster as notified by the concerned Government/ authority.

    b. For the definition of ‘Critical illness’, NBFCs shall be guided by the IRDAI (Health Insurance) Regulations, 2016 and the guidelines issued thereunder, as amended from time to time.

    c. The amount as per these provisions shall also apply to the existing deposit contracts wherein the individual depositor does not have a right to premature withdrawal of the deposit before the expiry of three months.

    – NBFCs need to intimate the details of maturity of the deposit to the depositor at least two months before the date of maturity of the deposit. It has been decided to reduce the period from two months to 14 days. Accordingly, it shall be the obligation of NBFC to intimate the details of maturity of the deposit to the depositor at least 14 days before the date of maturity of the deposit.

    – It is advised that NBFCs may maintain the particulars/ details of the deposits, as required under the above-mentioned para, on centralized computer database; provided the authenticated particulars of public deposits are sent to the respective branches, updating the information on quarterly basis i.e. as on March 31, June 30, September 30 and December 31, every year irrespective of the fact that the branch does not open deposit accounts. The information pertaining to a quarter should reach the branch concerned before the 10th day of the next quarter.

    – RBI said, NBFCs which are accepting public deposits need to comply with the provision of the Banking Companies (Nomination) Rules, 1985. In terms of the Rule 2(9) of the said rules, NBFCs are required to acknowledge in writing to the depositor/s the filling of the relevant duly completed form of nomination, cancellation and/or variation of the nomination. It is now advised that NBFCs 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. Further, NBFCs shall introduce the practice of recording on the face of the passbooks/ receipts the position regarding availment of nomination facility with the legend “Nomination Registered” and they shall also indicate the name of the Nominee in the passbook/ receipt, in case the customer is agreeable to the same.

    – Deposit taking NBFCs are required to maintain liquid assets under Section 45-IB of the RBI Act and such liquid assets shall be entrusted for safe custody with specified entities as stated in para 33 of Master Direction – NBFC- Acceptance of Public Deposits Directions, 2016. Since approved securities are now being maintained only in dematerialized form, the provisions of para 33(5) of these directions are withdrawn.

  • What Is UPI Transaction Limit, Per Day Limit Of Various Public And Private Banks –Check Comparison | Personal Finance News

    New Delhi: The Reserve Bank Of India on 8 August 2024, the UPI limit for tax payment matters has been increased from Rs 1 lakh to Rs 5 lakh per transaction.

    However, the normal UPI transaction limit remains the same. Since the National Payments Corporation of India (NPCI) introduced the Unified Payments Interface (UPI) in 2016, the number of transactions using it has increased. For UPI, the NPCI has set a maximum daily transaction restriction at Rs 1 lakh. Most Indian banks have fixed their daily UPI transaction limits at Rs 1 lakh in compliance with the NPCI’s rules. 

    UPI Transaction Limit

    The daily limit for regular UPI transactions in India is up to Rs. 1 lakh. There shall be a 24-hour waiting period for any attempt to surpass these limitations. Overall UPI apps and bank accounts, there is also a cumulative limit of ten transactions.

    The transaction maximum is 2 lakh for some types of UPI transactions, such as capital markets, collections, insurance, and foreign inward remittances. The maximum amount per transaction for Initial Public Offering and Retail Direct Scheme is Rs 5 lakh.


    Check out below the UPI transaction limit and per day limit of various public and private sector banks in India:

    UPI Limits Set by Public Sector Banks

    State Bank of India 
    SBI has set a daily UPI transaction limit of Rs. 1,00,000. The bank also limits customers to 10 transactions per day.

    Central Bank of India 
    Central Bank of India has set a daily UPI transaction limit of Rs. 1,00,000.

    Union Bank of India 
    The maximum per transaction amount that can be transferred through UPI is Rs 1 lakh.

    Union Bank of India 
    The maximum transaction limit per transaction is Rs 1,00,000.

    Indian Bank 
    Users can send a total of Rs 100,000 per day, with each transaction capped at Rs 100,000. 

    UCO Bank 
    With each transaction capped at Rs 100,000, users can send a total of Rs 100,000 per day. 

    Bank of Maharashtra 
    For the P2P type, the maximum limit is capped at Rs 1,00,000.

    Canara Bank 
    For the P2P type, the maximum limit is capped at Rs 1,00,000 within 24 hours and up to 20 transactions.

    Bank of Baroda 
    Users can send a total of Rs 1,00,000 per day. Users are restricted to a maximum of 20 transactions per day.

    Punjab National Bank
    The upper limit per UPI transaction is Rs 1 Lakh.

    Punjab & Sind Bank
    The maximum amount that can be transferred through UPI is Rs 1,00,000 per day per user.


    UPI Limits Set by Private Sector Banks

    Axis Bank
    The overall transaction limit for debit fund transfers/P2P through UPI within 24 hours is Rs 1,00,000.

    HDFC Bank
    The bank has set a maximum limit of Rs 1 lakh for P2P UPI transactions, or 20 transactions per bank account in 24 hours.

    IndusInd Bank
    The UPI limit per day for general transactions stands at Rs 1,00,000. 

    ICICI Bank
    The upper limit mandated by NPCI is Rs 1 lakh per transaction and Rs 1 lakh cumulative transaction value.

    Bandhan Bank
    Users can transfer a maximum of Rs 1 lakh per day using UPI.

    IDFC First Bank
    For P2P transactions, the per transaction limit is Rs 1,00,000.

    IDBI Bank
    The per-transaction cap of IDBI Bank is Rs 100,000. 

    Karur Vysya Bank
    Karur Vysya Bank has set the per-transaction cap to Rs 100,000. 

    City Union Bank
    Users can send up to Rs 100,000 per transaction and a maximum of Rs 100,000 per day.

  • Rupee Depreciates To Fresh Low, Leaning Towards 84 Over Global Market Concern | Economy News

    The Indian rupee depreciated versus the US dollar on Monday to touch its all-time low, tracking global heavy selling in stock markets, over risks that the US may potentially slip into recession.
    At 12.18 pm, at the time of filing this report, the Rupee traded at 83.85 versus Friday’s closing of 83.75. It opened at 83.78, surpassing the previous lifetime low of 83.7525 from Friday.
    Analysts say that the Rupee’s fall is in line with the weakness in the global market, US recession fears, and add to it geopolitical tensions. 

    “U.S. recession concerns led to worries about foreign outflows from India and emerging markets,” said Mumbai-based Ajay Kedia of financial services firm Kedia Advisory.
    “The fall is attributed to concerns over a potential U.S. recession, which has spurred worries about foreign outflows from India and other emerging markets. The selloff in U.S. and Asian equities, following a disappointing U.S. jobs report, has intensified these concerns, causing significant market jitters,” Kedia said in a report.

    The weak U.S. jobs report released on Friday showed that the economy added only 114,000 jobs in July, significantly below market expectations of a 175,000 increase. Additionally, the unemployment rate unexpectedly jumped to a high of 4.3 per cent, and wage growth slowed more than anticipated.

    Kedia said the Reserve Bank of India might allow USD/INR to move higher to 83.90. He sees support at 83.45, and resistance at 83.95; and breaking 83.95 could push it to 84.10/84.20.
    Jamal Mecklai, a veteran in the financial market, said, “US recession fears, equity market collapse would create a risk-off sentiment. Equity decline could be quite serious and could last for a long time. So the rupee will naturally take some pressure.”

    In 2022-23, the Indian Rupee was in the news cycle for a considerable part, though not for good reasons. Monetary policy tightening by various central banks to contain inflation, the war in Ukraine leading to price rise for crude oil and subsequent realignment in the global energy supply chain, and strengthening of the US dollar index kept the Indian currency under pressure.

    Since then, the rupee has been off the news cycle, as it traded largely steady months thereafter. In 2022, the Rupee depreciated over 11 per cent on a cumulative basis, data showed. It breached the 83-mark against the US dollar in mid-October, to hit an all-time low.

    RBI’s possible intervention in the forex market to stabilize the rupee seemed to have yielded results. Typically, the RBI from time to time intervenes in the markets through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee.

    The RBI closely monitors the foreign exchange markets and intervenes only to maintain orderly market conditions by containing excessive volatility in the exchange rate, without reference to any pre-determined target level or band.

  • RBI Tightens Rules For Domestic Money Transfers | Personal Finance News

    New Delhi: The Reserve Bank of India (RBI) has tightened the framework for domestic money transfers in order to keep track of both cash pay-in and pay-out services.  In a circular issued on Wednesday, the RBI stated that in the case of cash pay-out service, the remitting bank shall obtain and keep a record of the name and address of the beneficiary.

    The circular also mentioned that in the case of cash pay-in service, the remitting banks or business correspondents shall register the remitter based on a verified cell phone number and a self-certified ‘Officially Valid Document (OVD)’ as per the Master Direction – Know Your Customer Direction 2016, as amended from time to time.

    Every transaction by a remitter will also have to be validated by an Additional Factor of Authentication (AFA). “Remitting banks and their business correspondents shall conform to provisions of the Income Tax Act, 1961 and the rules/ regulations framed thereunder (as amended from time to time), pertaining to cash deposits,” the circular states.

    The remitter bank shall include remitter details as part of the IMPS/NEFT transaction message, it added. The transaction message will have to include an identifier to identify the fund transfer as a cash-based remittance. The RBI also stated that the guidelines on card-to-card transfers are excluded from the purview of the DMT framework and shall be governed under the guidelines granted for such instruments.

    The RBI explained that since the framework for Domestic Money Transfer (DMT) was introduced in 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. Now, users have multiple digital options for fund transfer.

    The RBI said that the changes are being introduced following a review that was undertaken recently of various services facilitated in the current framework.

  • RBI Revises Norms, Tells Banks To Hear Borrowers Before Taking Any Action | Economy News

    Mumbai: The Reserve Bank on Monday revised its master directions on fraud risk management to incorporate the recommendations of a Supreme Court judgment which asks banks to hear a borrower before an account is classified as fraud.

    The central bank said the three revised master directions on fraud risk management are principle-based and strengthen the role of the board in overall governance and oversight of fraud risk management.

    “The master directions now expressly require that the REs (regulated entities) shall ensure compliance with the principles of natural justice in a time-bound manner before classifying persons/entities as fraud, duly taking into account the Supreme Court Judgment dated March 27, 2023,” a RBI statement said.

    In the SBI versus Rajesh Agarwal case, an SC bench led by CJI DY Chandrachud batted for the rights of the borrower to be heard before an account is classified as fraud.”The principles of natural justice demand that the borrowers must be served a notice, given an opportunity to explain the conclusions of the forensic audit report, and be allowed to represent by the banks/ JLF before their account is classified as fraud under the master directions on frauds,” it had said.

    “Since the master directions on frauds do not expressly provide an opportunity of hearing to the borrowers before classifying their account as fraud, audi alteram partem (right to be heard) has to be read into the provisions of the directions to save them from the vice of arbitrariness,” the order had added.

    The RBI said the framework on early warning signals (EWS) and red flagging of accounts (RFA) has also been strengthened further for early detection and prevention of frauds in the REs and timely reporting to law enforcement agencies and supervisors.

    The central bank has also mandated data analytics and market intelligence units for strengthening risk management systems as part of the review, the RBI said. The directions also emphasize the need for instituting robust internal audit and control framework in the REs, it said.

    A total of 36 existing circulars on fraud risk management in the regulated entities stand withdrawn with the issue of the revised guidelines, it said, adding that the exercise has been carried out with the intent of rationalising the existing instructions and reducing the compliance burden on the REs.

  • Bharat Bill Payment System: Full List Of Bank Credit Card Billers That Are Live On BBPS | Personal Finance News

    New Delhi: The Reserve Bank of India has made it mandatory that all credit outstanding repayments must be routed through the Bharat Bill Payment System (BBPS)- managed by the National Payments Corporation of India (NPCI). The revised norms to streamline the process of bill payments is applicable from 1 July 2024.

    Bharat Bill Payment System is a one-stop ecosystem for payment of all bills providing an interoperable and accessible Bill payment service to all customers across India. Bharat BillPay transaction can be initiated through multiple payment channels like Internet, Internet Banking, Mobile, Mobile-Banking, Mobile Wallets, Kiosk, ATM, Bank Branch, Agents and Business Correspondents, by just looking at the Bharat BillPay logo.

    Bharat BillPay facilitates myriad payment modes enabling Bill payments. The payment modes options facilitated under the ecosystem are Cards (Credit, Debit and Prepaid), NEFT Internet Banking, UPI, Wallets, Aadhar based Payments and Cash.

    We’re excited to introduce our new credit card billers, making your payment process smoother and more convenient.@HDFC_Bank | @ICICIBank | Indian Bank | @SaraswatBank | @pnbindia | @IDFCFIRSTBank | @UnionBankTweets #bbps #creditcard #digitalpayments pic.twitter.com/zQOVKsevRn
    — Bharat BillPay (@BharatBillPay) July 12, 2024

    15 major issuers are live on Bharat Bill Payment System. Check full list of bank credit card billers that are live on BBPS.

    AU Bank credit card
    BoB credit card
    Canara Bank credit card
    Federal Bank credit card
    HDFC Bank credit card
    IDBI Bank credit card
    IDFC Bank
    Indian Bank
    IndusInd credit card
    ICICI Bank credit card
    Kotak Mahindra Bank credit card
    Punjab National Bank credit card
    Saraswat Co-Operative Bank
    SBI Card
    Union Bank of India credit card

     

  • Reserve Bank Of India Cancels Licence Of City Co-operative Bank | Personal Finance News

    New Delhi: The Reserve Bank of India (RBI) has cancelled the licence of “The City Co-operative Bank Ltd., Mumbai, Maharashtra.” 

    RBI in a release said, consequently, the bank ceases to carry on banking business, with effect from the close of business on June 19, 2024. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

    The Reserve Bank cancelled the licence of the bank due to the following reasons

    – The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.

    – The bank has failed to comply with the requirements of Sections 22(3) (a), 22(3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949;

    – The continuance of the bank is prejudicial to the interests of its depositors;

    – The bank with its present financial position would be unable to pay its present depositors in full; and

    Public interest would be adversely affected if the bank is allowed to carry on its banking business any further, added RBI.

    Consequent to the cancellation of its licence, “The City Co-operative Bank Ltd., Mumbai, Maharashtra.” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5 (b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect.

    Deposit Insurance and Credit Guarantee Corporation 

    On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961. As per the data submitted by the bank, about 87% of the depositors are entitled to receive full amount of their deposits from DICGC. As on June 14, 2024, DICGC has already paid ₹230.99 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.