Banking Made Easy

DARPAN
A QUICK BOOK ON LATEST RBI POLICIES
SUMMARY OF RBI GUIDELINES (01.01.2019- 31.12.2019)
(Very useful books for all Banking knowledge based Examinations)

Compiled by
Sanjay Kumar Trivedy
Chief Manager, Canara Bank, Gandhinagar, Nagpur (Maharashtra)
 Preface
Dear Friends,
Indian Banking is in its most exciting phase. The impact of liberalization has been
widespread and has thrown up both challenges and opportunities for bankers. Ever
increasing competition is a part of professional life and the banker who is ahead of his peers
in terms of knowledge, skill, technology and quick response will be the winner.
Banking/Financial sector in our country is witnessing a sea change and banker’s business has
become more complex and difficult in this knowledge driven era.
An official working in the Banking sector has to keep pace with the updated knowledge, skills
& attitude, as the same is required everywhere. Employees play vital role in Banking/service
organizations and they need to be transformed into Knowledge Assets to remain competitive
in the dynamic environment and it is more so with Banks as they are very service sensitive.
Thus, it is imperative for the bank staff to serve the clientele with updated information of
bank's products & services to accomplish corporate objectives.
This book titled“BANKING MADE EASY: DARPAN– RBI POLICIES (01.01.2019 to 31.12.2019)”
has many unique features to its credit & consists of all topics required for day today Banking
and Knowledge based Examinations related to banking with clear concept & simple language.
This Book is divided into different chapters namely Various Act/Laws related to banking,
Customer of the Bank, Priority sector Advance, Basel & Risk Mgmt, Digital Banking, Forex,
NPA & Recovery Mgmt etc.and separate chapter on One Liner Expected Questions- Answers
are given based on these latest changes. It has been seen that last so many years in
Promotion Test & other knowledge based Examination/Interview,nearly 60-70% questions are
asked from latest policies & guidelines of RBI and in this regard this book is of immense use
for all knowledge based examinations.

All possible care is taken to provide error free information, however, readers may note that
the information given herein is merely for guidance and they need to refer the relevant
circulars, Directions & Manuals for full details.

During preparation of this book, I received tremendous support and inspirations from
colleagues & Friends and special thanks to our colleagues Miss Mohini Gosavi (SWO-107857)
and Miss Mukta Ambekar(SWO-90845) of our Gandhinagar, Nagpur (0265) for their great
efforts and support in compilation of this book.

All possible care is taken to provide error free information, however, readers may note that
the information given herein is merely for guidance/reference and they need to refer the
relevant circulars & Manuals for full details.

I solicit your views on the content and quality of the topics for further improvement.I
wishes all the best to the readers of this book.

Arise, Awake and stop not till the goal is reached"... Swami Vivekananda

Date: 06.01.2020 Sanjay Kumar Trivedy

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 1 | P a g e
 About the Author
Mr. Sanjay Kumar Trivedy (Native: Motihari, Bihar), Presently working as Chief Manager(
Scale-IV) in Canara Bank, Gandhinagar branch, Nagpur,Maharashtra state. He Joined
Canara Bank as DRO/PO (AEO) on 10.03.1997 and and worked in various places, starting from
Maujgarh branch (1997-2000), Near Abohar(Punjab), Sirsa Main- Haryana (2000-2004), BMC,
Jalandhar (2004-2006) Toiladungari, Sakchi, Jamshedpur(2006-2009), Jhalak near Chaibasa
(2009-2011), J B Nagar, Andheri East , Mumbai ( 2011-2013) and then Faculty as well as
College in charge ( Principal ) in Regional Staff Training College, Mumbai (2013-2016),
Govt.Link Cell, Nagpur (01.05.2016 to 15.07.2017), Itwari Branch, Nagpur ( 17.07.2017 to
15.09.2017 ), Shrigonda Branch (16.09.2017 to 07.07.2018), Chatigali, Solapur ( 08.07.2018
to 27.05.2019) and then Gandhinagar,Nagpur (Since 28.05.2019 to …). He won more than 232
awards in various fields of Banking by his Bank – Canara Bank, which includes twice gold coin
for CASA mobilization. His best achievement was as an officer/AEO, he converted his
Section: Agril Finance into Hi-tech Agril. Branch at BMC, Jalandhar and while working in
Jhalak branch near Chaibasa (Jharkhand), won twice best Rural banker award from NABARD
during 2009-10 &2010-11 in SHG credit linkage & Farmers Club Formation. During this
journey started from 1997 to till date he worked in almost all area of Banking.
Mr. Sanjay Kumar Trivedy is M.Sc. (Agril), CAIIB, PGDCA, MBA, MBA (Finance),Diploma (IIBF)
in Rural Banking, Treasury, Investment and Risk Management, Commodity Derivatives for
Bankers, Advanced Wealth Management, Certificate (IIBF) in Trade Finance, Certificate in
Anti-Money Laundering / Know Your Customer, Certificate Examination in SME Finance for
Bankers, Certificate Examination in Customer Service & Banking Codes and Standards,
Certificate Examination in CAIIB - Elective Subjects ( Retail Banking & Human Resource
Management) & Certificate Examination in Microfinance
Mr. Sanjay Kumar Trivedy has teaching experience of more than 16 years, from Sirsa Main
Branch (2000-2004) , he started teaching to his colleagues/staff and in this long journey he
has given good results both in Promotion test as well as JAIIB /CAIIB examination. He has
taken IIBF-JAIIB & CAIIB classes at Mumbai. He has compiled/authored more than 20 books in
last three years related banking - JAIIB, CAIIB, Book on Promotion Test ( all cadres),
Interview , Drishti (Current Banking Topics –Interview book for Scale iv & above), Group
Discussion, Certificate course on Customer Service & BCSBI, AML& KYC, MSME Finance for
Bankers, Book on Abroad Posting, Confirmation Test for PO, Banking & Technology and many
more books on day today banking and many more in the offing.
Mr. Sanjay Kumar Trivedy is working in a mission mode to reduce knowledge gap among
bankers with objective to provide educational support free of cost to all in general and
bankers in particular with objective to empower Banker colleagues specially young banker
who join the bank in last more than one decade for their better productivity, Sense of
satisfaction, Customer delight with ultimate increase of quality banking business for their
organisations.

He can be contacted only through msg on whatsapp no. : 9987519725

Infuse your life with action. Don't wait for it to happen. Make it happen. Make your own future. Make
your own hope. Make your own love. And whatever your beliefs, honor your creator, not by
passively waiting for grace to come down from upon high, but by doing what you can to make grace
happen... yourself, right now, right down here on Earth – Bradley Whiteford

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 2 | P a g e
 INDEX
CONTENTS Page No.
SI. No
1 LAWS & ACTS RELATED TO BANKING 4
2 LOANS & ADVANCES 9
3 PRIORITY SECTOR LENDING 12
4 BASEL & RISK MANAGEMENT 15
5 NPA & RECOVERY MANAGEMENT 16
6 FOREX & INTERNATIONAL TRADE 17
7 DIGITAL BANKING 20
8 GENERAL BANKING 27
9 CURRENT BANKING, FINANCE & ECONOMY 32
10. ONE LINER QUES-ANS ON RBI POLICIES -2019 37

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 3 | P a g e
SUMMARY OF RBI GUIDELINES (01.01.2019- 31.12.2019)

1. BANKING RELATED LAWS & ACTS

RBI reduces repo rate by 25 basis points in 4th Bimonthly Monetary Policy and no changes in 5th
Bimonthly MPC on 05.12.19 : In its 4th Bi-monthly Monetary Policy Committee meeting, the Reserve
Bank of India has reduced the policy repo rate by 25 basis points (bps). The MPC has also decided to
maintain the accommodative stance of monetary policy. The main decisions taken in the 4th Bi-monthly
Monetary Policy Committee meeting are: The repo rate under the liquidity adjustment facility (LAF) was
reduced from 5.40% to 5.15%. The reverse repo rate under the LAF stands revised to 4.90%. Hence, total
The repo rate cut during 2019 is 1.35%. The marginal standing facility (MSF) rate and the Bank Rate is
revised to 5.40%. RBI has also reduced the real GDP growth for 201920 from 6.9% to 6.1%.RBI to transfer
Rs 1.76 lakh crore to government
POLICY RATES Wef 04.10.2019 Wef 05.12.2019
CRR 4.00% (15.02.2013) 4.00% (15.02.2013)
SLR 18.50% (12.10.2019) 18.25% (04.01.2020)
Overnight LAF (of NDTL) 0.25% 0.25%
14-days term Repo(of NDTL) 0.75% 0.75%
LAF/REPO RATE 5.15% 5.15%
Reverse REPO 4.90% 4.90%
MSF/Bank Rate 5.40% 5.40%

Maintenance of SLR
As annonced by RBI on 05.12.18, RBI decided to reduce the SLR requirement of banks by 25 basis points
every calendar quarter from 19.50 per cent of of their Net Demand and Time Liabilities (NDTL) to: (i)
19.25 per cent from January 5, 2019 (ii) 19.00 per cent from April 13, 2019 (iii) 18.75 per cent from July
6, 2019 (iv) 18.50 per cent from October 12, 2019 (v) 18.25 per cent from January 4, 2020 (vi) 18.00 per
cent from April 11, 2020.
The Reserve Bank of India has given its approval to transfer a sum of Rs 1,76,051 crore to the
Government of India, comprising of Rs 1,23,414 crore of surplus for the year 2018-19 and Rs 52,637 crore
of excess provisions identified as per the revised Economic Capital Framework. The panel was led by
former RBI Governor Bimala Jalan.
RBI RATE OF INTEREST ON FLOATING RATE BONDS The rate of interest on the Floating Rate Bonds,
2020 (FRB 2020) applicable for the half year December 21, 2019 to June 20, 2020 shall be 5.15% per
annum. It may be recalled that the rate of interest on FRB, 2020 is set at the average (rounded off to
two decimal places) of implicit yields at the cut-off prices, of the last three auctions of GoI182 day
Treasury Bills, held up to period preceding the coupon reset date, which is December 21, 2019. The
implicit yields will be computed by reckoning 365 days in a year. The coupon rate has been fixed
accordingly.
FINANCIAL BENCHMARK ADMINISTRATORS RBI has notified benchmarks administered by Financial
Benchmarks India Pvt. Ltd. (FBIL) as a ‘significant benchmark’ as under: Overnight Mumbai Interbank
Outright Rate (MIBOR) Mumbai Interbank Forward Outright Rate (MIFOR) USD/INR Reference Rate
Treasury Bill Rates Valuation of Government Securities Valuation of State Development Loans (SDL)
Further, in terms of paragraph 3(ii) of the above directions, the person administering the ‘significant
benchmark’, shall make an application to the Reserve Bank within a period of three months from the
date of this notification for authorization to continue administering these benchmarks.
CREDIT GUARANTEE SCHEME FOR PSUs: Union Cabinet has approved a partial credit guarantee scheme
for public sector banks to purchase high rated pooled assets from financially sound NBFCs. PSBs can
purchase high rated pooled assets from financially sound NBFCs/Housing Finance Companies. a) The
amount of overall guarantee will be limited to first loss of up to 10 per cent of fair value of assets being
purchased by the banks under the Scheme, or Rs. 10,000 crore, whichever is lower. b) The scheme would
cover NBFCs / HFCs that may have slipped into SMA-0 category during the one year period prior to
1.8.2018. c) The minimum rating of the underlying asset pool being purchased by PSBs has been revised
from the existing "AA" to "BBB+" The government expects that the move help address NBFCs/HFCs resolve
their temporary liquidity or cash flow mismatch issues.
RBI STARTS ‘ON TAP’ LICENSING FOR SFBs: The RBI has released guidelines for ‘on tap’ licensing of
Small Finance Banks in the private sector. Existing payments banks (PBs), which have completed five
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years of operations, are eligible for conversion into small finance banks. The preference will also be
given to those applicants who plan to set up the bank in under-banked states/districts, such as in the
North-East, East and Central regions of the country. The minimum capital for setting up an SFB has been
mandated at Rs.200 crores. However, the primary (urban) co-operative banks (UCBs), which wish to
become SFBs, the initial requirement of net worth will be Rs.100 crores, which will have to be increased
to Rs.200 crores within five years from the date of commencement of business. With this ‘on tap’
facility, the RBI will now accept applications and grant licenses for SFBs throughout the year, in contrast
to the erstwhile guidelines where the application window was open until 16 January 2015.
LONGER TERM VARIABLE RATE REVERSE REPO AUCTIONS IN NOVEMBER 2019 The RBI monitors the
system liquidity on an ongoing basis and conducts liquidity management operations based on an
assessment of the evolving liquidity conditions and the requirements of the system. It has been noticed
by RBI, since the surplus liquidity conditions are expected to continue for some time, it would be
necessary to absorb part of the surplus liquidity for a slightly longer duration, while continuing to meet
the durable liquidity requirements for the FY 2019-20 on a consistent basis. The internal working group
of RBI mandated to review the current liquidity management framework had recommended longer term
repo operations at market related rates to augment the toolkit for liquidity management operations.
REGULATORY AND SUPERVISORY FRAMEWORK FOR CORE INVESTMENT COMPANIES (CIC) RBI
constituted a Working Group (WG) has submitted its report to the Governor. The key recommendations of
the WG headed by Sh. Tapan Ray are as under: a) Capital contribution by a CIC in a step-down CIC, over
and above 10% of its owned funds, should be deducted from its Adjusted Networth, as applicable to other
NBFCs. Further, step-down CICs may not be permitted to invest in any other CIC, while allowing them to
invest freely in other group companies; b) The number of layers of CICs in a group should be restricted to
two. As such, any CIC within a group shall not make investment through more than a total of two layers
of CICs, including itself; c) Every Group having a CIC should have a Group Risk Management Committee
(GRMC); d) Constitution of the Board level committees viz., Audit Committee and Nomination and
Remuneration Committee should be mandated ; e) Offsite returns may be designed by the Reserve Bank
and may be prescribed for the CICs on the lines of other NBFCs. Annual submission of Statutory Auditors
Certificates may also be mandated; and Onsite inspection of CICs may be conducted periodically.
Definition of CIC: A Core Investment Company (CIC) is a Non-Banking Financial Company (NBFC) which
carries on the business of acquisition of shares and securities and holds not less than 90% of its net assets
in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group
companies.
Lending by banks to InvITs As per RBI circular dated 18.04.17, banks can BANKING POLICY invest in units
of InvITs subject to the specified conditions. Banks and other stakeholders have been seeking clarity on
provision of credit facilities to InvITs. RBI examined and decided (14.10.19) that banks can lend to InvITs
subject to the following conditions: i) Banks shall put in place a Board approved policy on exposures to
InvITs which shall inter alia cover the appraisal mechanism, sanctioning conditions, internal limits,
monitoring mechanism, etc. ii) Without prejudice to generality, banks shall undertake assessment of all
critical parameters including sufficiency of cash flows at InvIT level to ensure timely debt servicing. The
overall leverage of the InvITs and the underlying SPVs put together shall be within the permissible
leverage as per the Board approved policy of the banks. Banks shall also monitor performance of the
underlying SPVs on an ongoing basis as ability of the InvITs to meet their debt obligation will largely
depend on the performance of these SPVs. As InvITs are trusts, banks should keep in mind the legal
provisions in respect of these entities especially those regarding enforcement of security. iii) Banks shall
lend to only those InvITs where none of the underlying SPVs, which have existing bank loans, is facing
‘financial difficulty’. iv) Bank finance to InvITs for acquiring equity of other entities shall be subject to
the conditions. v) The Audit Committee of the Board of banks shall review the compliance to the above
conditions on a half yearly basis.
Large Exposures Framework As per RBI circular dated 03.06.19, on “Large Exposures Framework (LEF)”,
banks’ exposures to a single NBFC is restricted to 15 percent of their available eligible capital base,
while general single counterparty exposure limit is 20 percent, which can be extended to 25 percent by
banks’ Boards under exceptional circumstances. RBI decided (12.09.19) that a bank’s exposure to a single
NBFC (excluding gold loan companies) will be restricted to 20 percent of that bank’s eligible capital
base.
AMENDMENT TO KYC – AADHAR -Government. of India, on Feb 13, 2019 had notified amendments to
the Prevention of Money-laundering (Maintenance of Records) Rules, 2005. Further, an Ordinance,
“Aadhaar and other Laws (amendment) Ordinance, 2019”, was notified by the Government amending,

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 5 | P a g e
inter alia, the Prevention of Money Laundering Act, 2002. Accordingly, following amendments have been
made in KYC Directions by RBI, on 29.05.19: a) Banks can carry out Aadhaar authentication/ offline-
verification of an individual who voluntarily uses his Aadhaar number for identification purpose. (Section
16 of the amended MD on KYC) b) ‘Proof of possession of Aadhaar number’ has been added to the list of
Officially Valid Documents (OVD) with a proviso that where the customer submits ‘Proof of possession of
Aadhaar number’ as OVD, he may submit it in such form as are issued by the Unique Identification
Authority of India (UIDAI). (Section 3 of the amended MD) c) For customer identification of “individuals”:
i. For individual desirous of receiving any benefit or subsidy under any scheme notified under section 7
of the Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits and Services) Act, 2016, the
bank shall obtain the customers Aadhaar and may carry out its e-KYC authentication based on his
declaration that he is desirous of receiving benefit/subsidy under the Aadhaar Act, 2016. (Section 16 of
the amended MD)
ii. For non-DBT beneficiary customers, the Regulated Entities (REs) shall obtain a certified copy of any
OVD containing details of his identity and address along with one recent photograph. (Section 16 of the
amended MD) d) REs shall ensure that the customers (non-DBT beneficiaries) while submitting Aadhaar
for Customer Due Diligence, redact or blackout their Aadhaar number in terms of sub-rule 16 of Rule 9 of
the amended PML Rules.(Section 16 of the amended MD) e) REs other than banks may identify a customer
through offline verification under the Aadhaar Act with his/her consent. (Section 16 of the amended MD)
f) In case OVD furnished by the client does not contain updated address, certain deemed OVDs for the
limited purpose of proof of address can be submitted provided that the OVD updated with current
address is submitted within 3 months. (Section 3(a) ix of the amended MD) g) For non-individual
customers, PAN/Form No. 60 of the entity (for companies and Partnership firms – only PAN) shall be
obtained apart from other entity related documents. The PAN/Form No. 60 of the authorised signatories
shall also be obtained.(Section 30-33) h) For existing bank account holders, PAN or Form No. 60 is to be
submitted within such timelines as may be notified by the Government, failing which account shall be
subject to temporary ceasing till PAN or Form No. 60 is submitted. However, before temporarily ceasing
operations for an account RE shall give the customer an accessible notice and a reasonable opportunity
to be heard.(Section 39 of the amended MD).
SAFE CUSTODY OF RBI’s GOLD RESERVES  Ce rt a in se ct ions of t he print a nd socia l m e dia ha d re port e d
about RBI shifting abroad a part of its gold holding in 2014.  The Re se rve Ba nk ha s cla rifie d t ha tthe
gold reserves being maintained by it are in safe custody and no gold was shifted by the RBI from India to
other countries in 2014 or thereafter.  The me dia re port s a re fa ct ua llyincorrect. It is a normal practice
for Central Banks world over, to keep their gold reserves overseas with Central Banks of other countries
like Bank of England for safe custody.
RBI KEHTA HAI As part of its latest awareness initiative, RBI has come out with a series of awareness
messages thru ‘RBI Kehta Hai’. The latest is on the theme of Banking Ombudsman to make people aware
of the various grievance redressal mechanisms available to them as Bank Customers

Legal Entity Identifier Code for participation in non-derivative markets The Legal Entity Identifier (LEI)
code has been conceived of, as a key measure to improve the quality and accuracy of financial data
systems for better risk management, post the Global Financial Crisis. The LEI is a 20-character unique
identity code assigned to entities who are parties to a financial transaction. Globally, use of LEI has
expanded beyond derivative reporting and it is being used in areas relating to banking, securities market,
credit rating, market supervision. In India, the LEI system has been implemented in a phased manner for
participants (other than individuals) in the over-the-counter markets for rupee interest rate derivatives,
foreign currency derivatives and credit derivatives in India and for large corporate borrowers of banks.
On 29.11.18, RBI proposed to implement the LEI mechanism for all financial market transactions
undertaken by non-individuals in interest rate, currency or credit markets regulated.All participants, other
than individuals, undertaking transactions in the markets regulated by RBI viz., Government securities markets,
money markets (markets for any instrument with a maturity of one year or less) and non-derivative forex markets
(transactions that settle on or before the spot date) shall obtain Legal Entity Identifier (LEI) codes by the due date
indicated in the schedule. Only those entities that obtain an LEI code on or before the due dates applicable to them
shall be able to undertake transactions in these financial markets after the due date, either as an issuer or as an
investor or as a seller / buyer. Transactions undertaken on recognized stock exchanges are outside the purview of
the LEI requirement. Entities responsible for executing transactions, reporting or for depository functions in these
markets, shall capture the LEI code of the transacting participants in their systems. Entities can obtain LEI from
any of the Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF). In
India LEI code may be obtained from Legal Entity Identifier India Ltd. (LEIL).
Entities undertaking financial transactions shall ensure that their LEI code is considered current under the
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 6 | P a g e
rules of the Global LEI System. Lapsed LEI codes shall be deemed invalid for transactions in markets regulated
by RBI.
The previous implementation time deadline has been extended on 27.04.19 RBI as under:
Phase-1 : Entities with net worth of above Rs.10000 million by 31.12.2019
Phase-2 : Entities between Rs.2000 million and Rs.10000 million by 31.12.19
Phase-3: Entities with net worth up to Rs.2000 Millions by 31.03.20.
Ombudsman Scheme for Non-Banking Financial Companies, 2018
On 23.02.2018, RBI had implemented the Ombudsman Scheme for Non-Banking Financial Companies (NBFCs)
as defined in Section 45-I(f) of the Reserve Bank of India Act, 1934 and registered with the RBI under Section
45-IA of the Reserve Bank of India Act, 1934 which are authorised to accept deposits. The Scheme was to be
extended to remaining identified categories of NBFCs based on experience gained. In partial modification of
the Notification, RBI directed that the Non-banking Financial Companies, as defined in Section 45-I(f) of the
Reserve Bank of India Act, 1934 and registered with the RBI under Section 45-IA of the Reserve Bank of India Act,
1934 which (a) are authorised to accept deposits; (b) are Non-Deposit Taking Non-Banking Financial Companies
having customer interface, with assets size of Rupees 100 crore or above, as on the date of the audited balance
sheet of the previous financial year, or of any such asset size as the RBI may prescribe, will come within the
ambit, and shall comply with the provisions of the Ombudsman Scheme for Non-Banking Financial Companies,
2018. w.e.f. 26.04.2019. The Non-Banking Financial Company Infrastructure Finance Company (NBFC-IFC),Core
Investment Company (CIC), Infrastructure Debt Fund-Non-Banking Financial Company (IDF-NBFC) and an NBFC
under liquidation, are excluded from the ambit of the Scheme.
The Scheme will continue to be administered from the offices of the Non-Banking Financial Companies
Ombudsman in four metro centers viz. Chennai, Kolkata, Mumbai and New Delhi for handling complaints from
the respective zones, so as to cover the entire country. 4. The extension of the Scheme to eligible Non-
Deposit Accepting Non-Banking Financial Companies shall come into effect and force from April 26, 2019.
Review of Instructions on Bulk Deposit -In terms of extant instructions of RBI, banks have been given
discretion to offer differential rate of interest (DRI) on the bulk deposits as per their requirements and
Asset-Liability Management (ALM) projections. In its February 2019 policy review, RBI decided to revise the
definition of ‘bulk deposits’ and provide operational freedom to banks in raising these deposits.
Accordingly on 22.02.19, RBI issued the following changes: Bulk deposit would mean single Rupee term
deposits of Rs.2 cr and above for Scheduled commercial Banks (excluding Regional Rural banks) and Small
Finance Banks. The banks shall maintain the bulk deposit interest rate card in their Core banking system
to facilitate supervisory review.
Special Deposit Scheme (SDS)-1975 -Payment of interest for calendar year 2018 RBI informed banks that
gazette notifications related to interest rates for SDS 1975 are available in Government of India website
viz. egazette.nic.in which can be perused for guidance. Banks have been advised on 06.12.18, to ensure
that interest for the calendar year 2018 for SDS 1975 is disbursed to the account holders as per the rates
mentioned in the gazette. RBI further added that interest for the calendar year 2018 may be disbursed to
the SDS account holders preferably through electronic mode on January 01, 2019 itself.

RBI Vision 2022 (Utkarsh 2022)

RBI released Utkarash 2022, its vision documentduring July 2019. It provides information about, what
RBI's plans for future. A summary is provided. Mission: To promote the economic and financial well-being
of the people of India in terms of price and financial stability; fair and universal access to financial
services; and a robust, dynamic and responsive financial intermediation infrastructure.
Core Purpose : 1. To foster confidence in the internal and external value of the Rupee and contribute to
macro-economic stability 2. To regulate markets and institutions under its ambit, to ensure financial
system stability and consumer protection, 3. To promote the integrity, efficiency, inclusiveness and
competitiveness of the financial and payment systems, 4. To ensure efficient management of currency as
well as banking services to the Government and banks, 5. To support balanced, equitable and sustainable
economic development of the country
Values: RBI commits itself to the following shared values that guide organisational decisions and
employee actions in pursuit of the Bank’s core purpose.
Public Interest : RBI in its actions and policies, seeks to promote public interest and the common
good Responsiveness and Innovation: RBI seeks to be a dynamic organisation responsive to public needs.
Integrity and Independence: To maintain highest standards of integrity through openness, trust and
accountability
Introspection and pursuit of excellence: RBI is committed to self-appraisal, introspection and
professional excellence VISION 1: Excellence in performance of functions. A: Furthering the monetary

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policy framework and operating procedure; enriching statutory publications; and striving for a ‘state-of-
the-art’ data-intensive policy research framework B : Creating a resilient financial intermediation
ecosystem; refining the regulatory, supervisory and financial inclusion framework. C : Strengthening
resilience, integrity and efficiency of the financial markets infrastructure with a focus on deepening
digital payments D: Enhancing efficiency of the ‘Banker to Government’ function E: Broadening and
widening debt markets. F: Revamping the currency management system through enhanced efficiency in
procurement and distribution.
VISION 2: Strengthened trust of citizens and other institutions. A : Strengthening external communication
framework. B: Creating an enabling environment to develop consumer-friendly financial services
providers
C: Ensuring sound and comprehensive internal and external RBI policies D: Adopting a ‘less paper’ and
virtual workflow for external stakeholders
VISION 3: Enhanced relevance and significance in national and global roles A: Intensifying presence in
national forums to improve domestic financial infrastructure, B: Enhancing RBI’s brand equity. C:
Amplifying international financial engagement by articulating RBI’s stance and views on major global
economic and regulatory policy issues. D: Strengthening existing positions in supranational institutions.
VISION 4: Transparent, accountable and ethics-driven internal governance A: Reinforcing governance and
code of ethics, B: Upgrading internal controls through robust risk management, auditing & compliance
functions through international best practices C: Adopting ‘less paper’ & virtual internal workflows.
VISION 5: Best-in-class and environmentfriendly digital as well as physical infrastructure A: Automating
processes, achieving integration of information and ensuring cyber security.
VISION 6: Innovative, dynamic & skilled Human Resources A: Reviewing and reframing the organisational
structure to effectively implement all strategies B: Enhancing skills of human resources for creating a
suitable training framework C: Establishing an objective performance assessment system for efficient
HRM. D: Using technology and data analytics to promote research-based decision making by the
workforce

Discontinuation of Paper to Follow requirement for State Govt. Cheques To enhance efficiency in
cheque clearing, RBI had introduced Cheque Truncation System (CTS), facilitating the presentation and
payment of cheques without their physical movement. Paper to follow (P2F) was discontinued for Central
Govt. cheques from Feb 2016. RBI on 20.06.19, dispensed with the requirement of forwarding paid State
Govt. cheques in physical form to State Government departments/treasuries. The guidelines cover State
Governments which give their consent for withdrawal of P2F arrangement. In case any SG desires to have
a parallel run, it may be done for 3 months. Conditions: a. Presenting banks & drawee banks would
continue to discharge their duties prescribed under various Acts/ Regulations/Rules with respect to
payment of cheques. The government cheques would henceforth be paid in CTS clearing solely based on
their electronic images. The paid paper cheques would be retained by presenting bank. b. In case any
drawee bank desires to verify the government cheque in physical form before passing it for payment, the
image would be returned unpaid under the reason “present with document”. The presenting bank on
such instances shall ensure that the instrument is presented again in the next applicable clearing session
without any reference to the account holder (payee). c. The presenting banks are required to preserve
the physical instruments in their custody securely for a period of 10 years as required under Procedural
Guidelines for CTS. In case some specific cheques are required for the purpose of any investigation,
enquiry, etc., under the law, they may be preserved beyond 10 years. Drawee banks shall make
necessary arrangements to preserve the images of all government cheques for a period of 10 years with
themselves or through the National Archival System put in place by National Payments Corporation of
India (NPCI). d. The government cheques paid by a drawee bank across its counter by way of cash
withdrawal or transfer also need to be truncated and preserved for 10 years. e. The branch handling the
State Government transactions shall continue to send the Payment Scrolls on a daily basis in the
prescribed form to Sub-Treasury/Treasury to whom they are attached as hitherto. The cheques will not
be attached with the payment scroll, but the electronic images of paid cheques (by way of cash, clearing
and transfer), preserved by the presenting bank, shall be provided to the Office of AG/State Govt.
Departments/Treasuries/SubTreasuries by way of secured electronic communication/ email, etc., as per
their requirement. f. At any time during the preservation period of cheques, Office of AG/State
Government Departments/Treasuries/ Sub-Treasuries may require any paid cheque in physical form. The
dealing branch shall arrange to furnish the cheques paid by it by way of cash and transfer immediately.
Government cheques drawn on RBI / agency banks shall be presented in the grid within whose
jurisdiction the accredited/ authorised branch of paying bank is located.
Complaint Management System of RBI On 24.06.19, RBI launched The Complaint Management System
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 8 | P a g e
(CMS). It is a software application to facilitate RBI’s grievance redressal processes. Members of public
can access the CMS portal at RBI’s website to lodge their complaints against any of the entities regulated
by RBI. CMS has been designed to enable on-line filing of complaints. Salient Features: 1. It provides
acknowledgement through SMS/Email notification(s), status tracking through unique registration number,
receipt of closure advices and filing of Appeals. 2. It provides voluntary feedback on customer’s
experience. 3. It facilitates the regulated entities to resolve customer complaints received through CMS
by providing seamless access to their Principal Nodal Officers/Nodal Officers. 4. It generates a diverse
set of reports to monitor & manage grievances by Regulated Entities. They can use the information from
CMS for undertaking root cause analyses and initiating appropriate corrective action, if required. 5. RBI
officials handling the complaints can track the progress of redressal. The information available in CMS
could also be used for regulatory and supervisory interventions, if required. 6. With the launch of CMS,
the processing of complaints received in the offices of Banking Ombudsman (BO) and Consumer Education
and Protection Cells (CEPCs) of RBI has been digitalized.
Expert Committee on Economic Capital Framework -RBI in consultation with the Government of India,
constituted an Expert Committee to review the extant Economic Capital Framework of the RBI with Dr.
Bimal Jalan (former RBI Governor) as Chairman. The terms of reference of the Committee are given
below: Keeping in consideration (i) statutory mandate under section 47 of the RBI Act that the profits of
the RBI shall be transferred to the Government, after making provisions ‘which are usually provided by
the bankers’, and (ii) public policy mandate of the RBI, including financial stability considerations, the
Expert Committee would: 1. review status, need and justification of various provisions, reserves and
buffers presently provided for by the RBI; and 2. review global best practices followed by the central
banks in making assessment and provisions for risks which central bank balance sheets are subject to; 3.
suggest an adequate level of risk provisioning that RBI needs to maintain; 4. determine whether RBI is
holding provisions, reserves and buffers in surplus / deficit of required level of such provisions, reserves
and buffers; 5. propose a suitable profits distribution policy taking into account all the likely situations of
the RBI, including the situations of holding more provisions than required and the RBI holding less
provisions than required; 6. Any other related matter including treatment of surplus reserves, created
out of realised gains, if determined to be held. The Expert Committee will submit its report within a
period of 90 days from the date of its first meeting.

2. LOANS & ADVANCES

EXTERNAL BENCHMARK BASED LENDING-RBI amended its instructions contained in Master Direction
dated 03.03.2016, on 4.9.19, as under: (a) All new floating rate personal or retail loans (housing, auto,
etc.) and floating rate loans to Micro and Small Enterprises extended by banks from October 01, 2019
shall be benchmarked to one of the following: 1. Reserve Bank of India policy repo rate 2. Government of
India 3-Months Treasury Bill yield published by the Financial Benchmarks India Private Ltd (FBIL) 3. Govt.
of India 6-Months Treasury Bill yield published by FBIL 4. Any other benchmark market interest rate
published by FBIL. (b) Banks are free to offer such external benchmark linked loans to other types of
borrowers as well.
(c) In order to ensure transparency, standardisation, and ease of understanding of loan products by
borrowers, a bank must adopt a uniform external benchmark within a loan category; in other words, the
adoption of multiple benchmarks by the same bank is not allowed within a loan category. Spread under
External Benchmark Banks are free to decide the spread over the external benchmark. However, credit
risk premium may undergo change only when borrower’s credit assessment undergoes a substantial
change, as agreed upon in the loan contract. Further, other components of spread including operating
cost could be altered once in three years. Reset of Interest Rates under External Benchmark The interest
rate under external benchmark shall be reset at least once in three months. Transition to External
Benchmark from MCLR/Base Rate/BPLR Existing loans and credit limits linked to the MCLR/Base Rate/
BPLR shall continue till repayment or renewal:
Other conditions 1. Other existing borrowers shall have the option to move to External Benchmark at
mutually acceptable terms. 2. The switch-over shall not be treated as a foreclosure of existing facility. 3.
Interest rates on fixed rate loans of tenor below 3 years shall not be less than the benchmark rate for
similar tenor. 4. There shall be no lending below the benchmark rate for a particular maturity for all
loans linked to that benchmark. 5. All floating rate rupee loans sanctioned and renewed between
1.7.2016 and 31.03.16, shall be priced with reference to the Base Rate which will be the internal
benchmark for such purposes. 6. All floating rate rupee loans sanctioned and renewed w.e.f. April 1,

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 9 | P a g e
2016 shall be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will
be the internal benchmark for such purposes subject to the provisions contained in Master Direction. 7.
The periodicity of the reset under MCLR shall correspond to the tenor/maturity of the MCLR to which the
loan is linked.
Levy of Foreclosure Charges /Pre-payment Penalty on Floating Rate Term Loans As per RBI circular
dated 07.05.14, banks are not permitted to charge foreclosure charges / pre-payment penalties on home
loans / all floating rate term loans sanctioned to individual borrowers. On 02.08.19, RBI clarified that
banks shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loan
sanctioned, for purposes other than business, to individual borrowers with or without co-obligant(s).
LEVY OF FORECLOSURE CHARGES / PRE-PAYMENT PENALTY ON FLOATING RATE TERM LOANS  As pe r
the extant guidelines, banks are not permitted to charge foreclosure charges / pre-payment penalties on
home loans / all floating rate term loans sanctioned to individual borrowers.  In t his conne ct ion, RBI ha s
clarified that banks shall not charge foreclosure charges/ pre-payment penalties on any floating rate
term loan sanctioned, for purposes other than business, to individual borrowers with or without co-
obligant(s).
LEVY OF FORECLOSURE CHARGES/PRE-PAYMENT PENALTY ON FLOATING RATE LOANS BY NBFCs As per
the extant guidelines pertaining to NBFCs, foreclosure charges/ prepayment penalty on all floating rate
term loans sanctioned to individual borrowers have been waived. RBI has now clarified that NBFCs shall
not charge foreclosure charges / pre-payment penalties on any floating rate term loan sanctioned for
purposes other than business to individual borrowers, with or without co-obligant(s). AMENDMENT IN KYC
GUIDELINES The Government of India, has notified amendment to the Prevention of Money-laundering
(Maintenance of Records) Rules, 2005. As per the amendment, where the individual is a prisoner in a jail,
the signature or thumb print shall be affixed in presence of the officer in-charge of the jail and the said
officer shall certify the same under his signature and the account shall remain operational on annual
submission of certificate of proof of address issued by the officer in-charge of the jail.
DEVELOPMENT OF SECONDARY MARKET FOR CORPORATE LOANS  The RBI ha s const it ut e d a Ta sk Force
on the development of Secondary market for corporate loans under the chairmanship of Shri T.N.
Manoharan, Chairman, Canara Bank.  Se conda ry loa n ma rke t in India is la rge ly re st rict e d t o sa le t o
Asset Reconstruction Companies and ad-hoc sale to other lenders including banks, and no formalised
mechanism has been developed to deepen the market.  The Ta sk Force ha s be e n const it ut e d re a lising
the need for a formalised mechanism to deepen the secondary market and the significance of a well-
developed secondary market for greater transparency of inherent riskiness of the debt being traded.
Such price discovery is expected to spur innovations in the securitisation market as well as invigorate
dormant markets such as Corporate Default Swaps (CDS).  The se would in t urn provide wit h e a rly
warning signals regarding the riskiness of the debt being held by the banks which would incentivize
improving the underwriting and origination standards. Terms of Reference: To review the existing state
of the market for loan sale / transfer in India as well as the international experience in loan trading and,
to make recommendations on:  Re quire d policy/ re gula t ory int e rve nt ions for fa cilit a t ing de ve lopme nt of
secondary market in corporate loans, including loan transaction platform for stressed assets;  Cre a t ion
of a loan contract registry to remove information asymmetries between buyers and sellers, its ownership
structure and related protocols such as standardization of loan information, independent validation and
data access;  De sign of t he m a rke t st ruct ure for loa n sa le s/ a uct ions, including online pla t form s a nd t he
related trading and transaction reporting infrastructure;  Ne e d for, a nd role of, t hird pa rt y
intermediaries, such as servicers, arrangers, market makers, etc.;  Appropria t e me a sure s for e nha nce d
participation of buyers and sellers in loan sale/transfer;

DEVELOPMENT OF HOUSING FINANCE SECURITISATION MARKET  The RBI ha s const it ut e d a Commit t e e

on the development of Housing Finance Securitisation Market under the chairmanship of Dr. Harsh
Vardhan to review the existing state of mortgage backed securitisation in India, including the regulations
currently in place, and to make specific recommendations on suitably aligning the same with
international norms.  The Mort ga ge Se curit isa t ion m a rke t in India is prim a rily dom ina t e d by dire ct
assignments among a limited set of market participants on account of various structural factors
impacting both the demand and the supply side, as well as certain prudential, legal, tax and accounting
issues.  It is im pe ra t ive t ha t t he m a rke t m ove s t o a broa de r issua nce m ode l wit h suit a ble st ruct uring of
the instruments for diverse investor classes in order to ensure a vibrant securitisation market.  The
international experience shows that it is critical to address the issues of misaligned incentives and
agency problems resulting from information asymmetry problems between the originators and investors
in the market, which can exacerbate systemic risk. Thus, a careful design of a robust and transparent
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 10 | P a g e
securitisation framework assumes paramount significance.

Filing of Security Interest relating to Immovable (other than equitable mortgage), Movable and
Intangible Assets in CERSAI -In its circular dated 26.05.11, RBI had advised banks/financial
institutions(FIs) to register the transactions relating to securitization and reconstruction of financial
assets and those relating to mortgage by deposit of title deeds with CERSAI. The Government of India had
subsequently issued a Gazette Notification dated January 22, 2016 for filing of the following types of
security interest on the CERSAI portal: a. Particulars of creation, modification or satisfaction of security
interest in immovable property by mortgage other than mortgage by deposit of title deeds. b. Particulars
of creation, modification or satisfaction of security interest in hypothecation of plant and machinery,
stocks, debts including book debts or receivables, whether existing or future. c. Particulars of creation,
modification or satisfaction of security interest in intangible assets, being know how, patent, copyright,
trademark, licence, franchise or any other business or commercial right of similar nature. d. Particulars
of creation, modification or satisfaction of security interest in any ‘under construction’ residential or
commercial or a part thereof by an agreement or instrument other than mortgage. CERSAI had started
registration of the data in respect of paragraphs 2 (a) to (c) above, for the security interests created on
or after January 22, 2016, w.e.f. May 25, 2016 for Scheduled Commercial Banks and w.e.f. July 1, 2016
for all other entities registered with them. Further, the registration of data in respect of paragraph 2(d)
above was commenced since June 8, 2017 for all banks and FIs registered with CERSAI. Meanwhile, the
banks/ FIs have also started registering the security interests created before January 22, 2016 (subsisting
records). However, RBI observed that the extent of registration on the CERSAI portal is very low, both for
current and subsisting records. On 27.12.18, Banks/FIs have been advised by RBI to complete filing the
charges pertaining to subsisting transactions by March 31, 2019. Banks/ FIs have also been advised to file
the current charges relating to all transactions with CERSAI on an ongoing basis.

External Benchmarking of New Floating Rate Loans by Banks: The Report of the Internal Study Group
to Review the Working of the Marginal Cost of Funds based Lending Rate (MCLR) System (Chairman: Dr.
Janak Raj) had recommended the use of external benchmarks by banks for their floating rate loans
instead of the present system of internal benchmarks [Prime Lending Rate (PLR), Benchmark Prime
Lending Rate (BPLR), Base rate and Marginal Cost of Funds based Lending Rate (MCLR)]. RBI has proposed
that all new floating rate personal or retail loans (housing, auto, etc.) and floating rate loans to Micro
and Small Enterprises extended by banks from April 1, 2019 shall be benchmarked to one of the
following: (a) Reserve Bank of India policy repo rate, or (b) Government of India 91 days Treasury Bill
yield produced by the Financial Benchmarks India Private Ltd (FBIL), or (c) Government of India 182 days
Treasury Bill yield produced by the FBIL, or (d) Any other benchmark market interest rate produced by
the FBIL. The spread over the benchmark rate — to be decided wholly at banks' discretion at the
inception of the loan should remain unchanged through the life of the loan, unless the borrower's credit
assessment undergoes a substantial change and as agreed upon in the loan contact.Banks are free to
offer such external bench mark linked loans to other types of borrowers as well. In order to ensure
transparency, standardisation, and ease of understanding of loan products by borrowers, a bank must
adopt a uniform external benchmark within a loan category. The adoption of multiple benchmarks by the
same bank is not allowed within a loan category.

Filing of Security Interest relating to Immovable (other than equitable mortgage), Movable and
Intangible Assets in CERSAI -In its circular dated 26.05.11, RBI had advised banks/financial
institutions(FIs) to register the transactions relating to securitization and reconstruction of financial
assets and those relating to mortgage by deposit of title deeds with CERSAI. The Government of India had
subsequently issued a Gazette Notification dated January 22, 2016 for filing of the following types of
security interest on the CERSAI portal: a. Particulars of creation, modification or satisfaction of security
interest in immovable property by mortgage other than mortgage by deposit of title deeds. b. Particulars
of creation, modification or satisfaction of security interest in hypothecation of plant and machinery,
stocks, debts including book debts or receivables, whether existing or future. c. Particulars of creation,
modification or satisfaction of security interest in intangible assets, being know how, patent, copyright,
trademark, licence, franchise or any other business or commercial right of similar nature. d. Particulars
of creation, modification or satisfaction of security interest in any ‘under construction’ residential or
commercial or a part thereof by an agreement or instrument other than mortgage. However, RBI
observed that the extent of registration on the CERSAI portal is very low, both for current and subsisting
records. On 27.12.18, Banks/FIs have been advised by RBI to complete filing the charges pertaining to
subsisting transactions by March 31, 2019. Banks/ FIs have also been advised to file the current charges
relating to all transactions with CERSAI on an ongoing basis.

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 11 | P a g e
Guidelines on Loan System for Delivery of Bank Credit (December 5, 2018): 1. Objective: To enhance
credit discipline among the larger borrowers enjoying working capital facility from the banking
system. 2. Applicability: Borrowers having aggregate fund based working capital limit of Rs1500
million and above from the banking system. 3. Method of delivery of bank credit: From In April, 2019,
minimum 40% (60% from 1.7.2019) of the sanctioned fund based working capital limit, including ad
hoc limits and TODs, should be by way of 'Loan Component'. For such borrowers, drawings up to 40
percent (60% from 1.7.2019) of the total fund based working capital limits shall only be allowed from
the 'loan component'. Drawings in excess of the minimum 'loan component' threshold may be allowed
in the form of cash credit facility. The bifurcation of the working capital limit into loan and cash
credit components shall be effected after excluding the export credit limits (pre-shipment and post-
shipment) and bills limit for inland sales from the working capital limit.
Investment by the bank in the commercial papers issued by the borrower shall form part of the loan
component, provided the Investment is sanctioned as part of the working capital limit. In case of
consortium finance, banks may frame ground rules for sharing of cash credit and loan components. 4.
Amount and tenor of the loan: Minimum tenor of thia Idan will be 7 days. Banks may split the loan
component into WCLs with different maturity periods as per the needs of the borrowers. 5.
itepayment/RenewpRollover of Loan Comoonerit: Banks will have the discretion to stipulate repayment
of thcWCLs in instalments or by way of a "bullet" repayment. Banks may consider rollover of the WCLs at
the request of the borrower. 6. Risk weights for undrawn portion of cash credit limits: From April 1,
2019, the undrawn portion of cash credit/ overdraft limits sanctioned to the aforesaid large borrowers,
shall attract a credit conversion factor of 20%. 7. Effective Date: The guidelines will be effective from
April 1, 2019 covering both existing as well as new relationships. The 40% loan component will be revised
to 60%, with effect from July 1, 2019.

3. PRIORITY SECTOR LENDING

3A. AGRICULTURE
Priority Sector Targets - Lending to Non-Corporate Farmers – FY 2019-20 The system-wide average of
the last 3 years achievement with regard to overall direct lending to non-corporate farmers is notified by
RBI every year. The applicable system wide average figure for computing achievement under priority
sector lending for the FY 2019-20 is 12.11 percent as per RBI notification dated 19.09.19.
Priority Sector loan by banks to NBFCs for On-Lending To boost credit to the needy segment of
borrowers, RBI decided (13.08.19) that bank credit to registered NBFCs (other than MFIs) for on-lending
will be eligible for classification as priority sector under respective categories subject to the following
conditions: 1. Agriculture: On-lending for ‘Term lending’ component under Agriculture up to Rs.10 lakh
per borrower. 2. Micro & Small enterprises: On-lending by NBFC up to Rs. 20 lakh per borrower. 3.
Housing: Enhancement of existing limits for on-lending from Rs.10 lakh per borrower to Rs.20 lakh per
borrower. Under these guidelines, banks can classify only the fresh loans sanctioned by NBFCs out of
bank borrowings, on or after the 13.08.19. Loans given by HFCs under existing on-lending rules will
continue to be classified under priority sector by banks. Overall cap : Bank credit to NBFCs for On-
Lending will be allowed upto a limit of 5% of individual bank’s total priority sector lending on an ongoing
basis. These direction will be valid upto March 31, 2020 and reviewed thereafter. Loans disbursed under
this model will continue to be classified under Priority Sector till the date of repayment/maturity.
Interest Subvention Scheme for Kisan Credit Card (KCC) to Fisheries and Animal Husbandry farmers
Government of India issued (RBI-26.08.19) the operational guidelines of the Interest Subvention Scheme
for Kisan Credit Card facility to fisheries and animal husbandry farmers for a period of two years i.e.
2018-19 and 2019-20 with the following stipulations: 1. Eligiblity : Short-term loans upto Rs. 2 lakh to
farmers involved in activities related to Animal Husbandry and Fisheries 2. Rate of interest charged by
bank : 7% per annum during the years 2018-19 and 2019-20 3. Rate of interest subvention : 2% per annum
to lending institutions viz. Public Sector Banks (PSBs) and Private Sector Commercial Banks (for loans
given by their rural and semi-urban branches only) on use of their own resources.
4. Calculation : Interest subvention will be calculated on the loan amount from the date of its
disbursement / drawal upto the date of actual repayment of the loan by the farmer or up to the due date
of the loan fixed by the banks, whichever is earlier, subject to a maximum period of one year. 5. Overall
cap : For farmers possessing KCC for raising crops and involved in activities related to animal husbandry
and/or fisheries, the KCC for animal husbandry/fisheries shall be within the overall limit of Rs.3 lakh. 6.
Additional subvention : 3% p.a to farmers repaying both loans (short term crop loan and working capital

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 12 | P a g e
loan for animal husbandry/fisheries activities) in time i.e. from the date of disbursement of the working
capital loan upto the actual date of repayment by farmers or upto the due date fixed by the banks for
repayment of loan, whichever is earlier, subject to a maximum period of one year from the date of
disbursement. 7. Effective rate of interest : Farmers repaying promptly would get short term loans @ 4%
per annum during the years 2018-19 and 2019-20. 8. The limit for crop loan component will take priority
for interest subvention and prompt repayment incentive benefits and the residual amount will be
considered towards animal husbandry and / or fisheries. 9. Banks are to make Aadhar linkage mandatory
for availing short-term loans for Animal Husbandry and Fisheries in 2018-19 and 2019-20. 10. The Interest
Subvention Scheme is being put on DBT mode on ‘In Kind/services’ basis and all short term loans
processed from 2018-19 are required to be brought on ISS portal / DBT platform. Banks are to capture
and submit the category wise data of beneficiaries under the scheme and report the same on ISS portal
individual farmer wise once it is launched by the Ministry of Agriculture and Farmers Welfare to settle
the claims arising from 2018-19 onwards. RBI also advised as under: i) For 2% interest subvention, banks
are to submit their claims on a half-yearly basis as on September 30 and March 31 for the years 2018-
2019 and 2019-2020, of which, the latter needs to be accompanied by a Statutory Auditor’s certificate
certifying the claims for subvention for the financial year ended on March 31 of corresponding year as
true & correct. ii) For 3% prompt repayment incentive, banks may submit their one-time consolidated
claims for disbursements made during 2018-19 and 2019-20, accompanied by Statutory Auditor’s
certificate certifying the claim as true and correct. iii) Claims in respect of 2% interest subvention and 3%
prompt repayment incentive may be submitted within a quarter from the close of the half year/year
Collareal Free Agricultural Loans Keeping in view the overall inflation & rise in agriculture input cost over the years since
2010, RBI decided on 07.02.19, to raise the limit for collateral free agricultural loans from the existing level of Rs.1 lakh to
Rs.1.60 lakh. Accordingly, banks may waive margin requirements for agricultural loans upto Rs.1.60 lakh.
Kisan Credit Card (KCC) Scheme: Working Capital for Animal Husbandry and Fisheries -Kisan Credit Card (KCC)
Scheme (RBI circular dated 04.07.18), has been extended to Animal Husbandry farmers and Fisheries for
their working capital requirements, on 04.02.19 by RBI (as per provisions of Budget 2018-19). The
guidelines are given as under:Purpose: To meet short term credit requirements of rearing of animals,
birds, fish, shrimp, other aquatic organisms, capture of fish. Eligibility: Fishery : Inland Fisheries and
Aquaculture, Fishers, Fish Farmers (individual & groups/ partners/ share croppers/ tenant farmers), Self
Help Groups, Joint Liability Groups & women groups and Marine Fisheries.The beneficiaries must own or
lease any of the fisheries related activities such as pond, tank, open water bodies, raceway, hatchery,
rearing unit, possess necessary license for fish farming and fishing related activities, and any other State
specific fisheries and allied activities.
1. Poultry and small ruminant: Farmers, poultry farmers either individual or joint borrower, Joint Liability
Groups or Self Help Groups including tenant farmer of sheep/goats/pigs/poultry/birds/rabbit and
having owned/ rented/leased sheds.
2.Dairy: Farmers and Dairy farmers either individual or joint borrower, Joint Liability Groups or Self Help
Groups including tenant farmers having owned /rented/leased sheds.
Scale of Finance -The scale of finance will be fixed by the District Level Technical Committee (DLTC)
based on local cost worked out on the basis of per acre/per unit/per animal/per bird etc.
1. The working capital components in fisheries, may include recurring cost towards seed, feed, organic and
inorganic fertilisers, lime/other soil conditioners, harvesting and marketing charges, fuel/electricity
charges, labour, lease rent (if leased water area) etc. For capture fisheries, working capital may include
the cost of fuel, ice, labouring charges, mooring/landing charges etc. may form part of the scale of
finance.
The working capital components in Animal Husbandry, may include recurring cost towards feeding, veterinary
aid, labour, water and electricity supply.
2. The maximum period for assessment of working capital requirement may be based on one production
cycle.
General Guidelines
1. Drawing power: The drawing power will be worked on the basis of the latest valuation of stocks,
receivables and/or cash flows as per terms of sanction.
2. Repayment: The loan will be in the nature of a revolving cash credit limit. Repayment will be fixed as
per the cash flow/income generation pattern of the activity undertaken by the borrower.
3. Monitoring of end use: The account/smart card for the loan issued under the scheme is to be
maintained/issued separately from the existing KCC loan to monitor the utilization limit. The monitoring
of end use of funds will be in line with other loans (KCC on crop loans included) viz., field visits to the site
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 13 | P a g e
 of unit/project to be carried out by the branch officials for checking the progress of the unit. Banks will
periodically review the facility and continue/withdraw/scale down the facility based on the performance
of the borrower.
Rephasement of Short-term Production Credit (Crop Loans)under Relief for Natural Calamity:All short-
term loans, except those which are overdue at the time of occurrence of natural calamity, can be restructured.
The principal amount of the short-term loan as well as interest due for repayment in the year of occurrence of
the natural calamity may be converted into term loan. The repayment period of the restructured loan may vary
depending on the severity of the calamity, the impact on loss of economic assets and distress it caused. A
maximum repayment period of up to 2 years (including moratorium period of 1 year) shall be allowed if the loss is
between 33% and 50%. If the crop loss is 50% or more, repayment period may be extended upto a maximum of 5
years(including 1 year moratorium period). In all restructured loan accounts, moratorium period of at least one
year shall be considered. Banks may not insist on additional collateral security for such restructured loans.

3B.FINANCIAL INCLUSION & Govt. Sponsored Schemes

QUALIFYING ASSETS CRITERIA - REVIEW OF LIMITS Taking into consideration the important role played
by MFIs in delivering credit to those in the bottom of the economic pyramid and to enable them play
their assigned role in a growing economy, RBI has increased the household income limits for borrowers of
NBFC-MFIs from the current level of For Rural Areas: Rs.1,00,000 For Urban Areas: Rs.1,60,000 For Semi
Urban Areas: Rs.1,25,000 and Rs.2,00,000 The limit on total indebtedness of the borrower has been
increased from Rs.1,00,000 to Rs.1,25,000. In light of the revision to the limit on total indebtedness, the
limits on disbursal of loans have been raised from for first cycle Rs.60,000 to Rs.1,00,000 & for
subsequent cycles Rs.75,000 to Rs.1,25,000.
Direct Benefit Transfer (DBT) Scheme – Implementation Further to RBI directions dated 09.07.13, on use
of Aadhaar to facilitate delivery of social welfare benefits by direct credit to the bank accounts of
beneficiaries, banks have been advised by RBI (13.08.19) to ensure that opening of bank accounts and
seeding of Aadhaar numbers with existing or new accounts of eligible beneficiaries opened for the
purpose of DBT under social welfare schemes, is in conformity with the provisions listed in KYC Master
directions dated 29.05.19 and provisions of Prevention of Money Laundering (PML) Rules.
LENDING BY BANKS TO NBFCs FOR ON-LENDING  In orde r t o boost cre dit t o t he ne e dy se gm e nt of
borrowers, RBI has been decided that bank credit to registered NBFCs (other than MFIs) for on-lending
will be eligible for classification as priority sector under respective categories subject to the following
conditions:  Agricult ure : On-lending by NBFCs for ‘Term lending’ component under Agriculture will be
allowed up to Rs. 10 lakh per borrower.  Micro & Small enterprises: On-lending by NBFC will be allowed
up to Rs. 20 lakh per borrower.  Housing: Enhancement of the existing limits for on-lending by HFCs
from Rs. 10 lakh per borrower to Rs. 20 lakh per borrower.  Unde r t he a bove on-lending model, banks
can classify only the fresh loans sanctioned by NBFCs out of bank borrowings. However, loans given by
HFCs under the existing on-lending guidelines will continue to be classified under priority sector by
banks.  Ba nk cre dit t o NBFCs for On-Lending will be allowed upto a limit of five percent of individual
bank’s total priority sector lending on an ongoing basis. Further, the above instructions will be valid for
the current financial year upto March 31, 2020 and will be reviewed thereafter. However, loans disbursed
under the on-lending model will continue to be classified under Priority Sector till the date of
repayment/maturity.
Banking Services – Basic Savings Bank Deposit Account (BSBDA) The Basic Savings Bank Deposit (BSBD)
Account was designed as a savings account which will offer certain minimum facilities, free of charge, to
the holders of such accounts. In the interest of better customer service, RBI decided (on 10.06.19) to
make certain changes in the facilities associated with the account. Banks are to offer the following basic
minimum facilities in the BSBD Account w.e.f 01.07.19, free of charge, without any requirement of
minimum balance.
1. Cash deposit at branch or ATMs/CDMs ,2. Receipt/ credit of money through any electronic channel or
by means of deposit / collection of cheques drawn by Central/State Government agencies and
departments , 3. No limit on number and value of deposits that can be made in a month. 4. Minimum of
four withdrawals in a month, including ATM withdrawals, 5. ATM Card or ATM-cum-Debit Card The BSBD
Account shall be considered a normal banking service available to all. Banks can provide additional value-
added services, including issue of cheque book, beyond the above minimum facilities, which may/may
not be priced (in non-discriminatory manner). The availment additional services shall be at option of
customers. Banks shall not require the customer to maintain a minimum balance. Offering such
additional services will not make it a non-BSBD Account, if prescribed minimum services are provided

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 14 | P a g e
free of charge. The holders of BSBD Account will not be eligible for opening any other savings bank
deposit account in that bank. If a customer has any other existing savings bank deposit account in that
bank, he/she will be required to close it within 30 days from the date of opening a BSBD Account. Before
opening a BSBD account, a bank to take a declaration from that he/she is not having a BSBD account in
any other bank.
Applicable Average Base Rate to be charged by NBFCMFIs for the Quarter Beginning April 01, 2019
On 07.02.14, RBI had informed NBFC-MFIs regarding pricing of credit, stating that RBI will, on the last
working day of every quarter, advise the average of the base rates of the 5 largest commercial banks for
arriving at the interest rates to be charged by NBFC-MFIs to its borrowers in the ensuing quarter.
On 29.03.19, RBI communicated that the applicable average base rate to be charged by Non-Banking
Financial Company – Micro Finance Institutions (NBFC-MFIs) to their borrowers for the quarter beginning
April 01, 2019 will be 9.21 per cent.
Applicable Average Base Rate to be charged by NBFCMFIs for the Quarter Beginning January 01, 2019
In its circular dated 07.02.14 regarding pricing of credit, RBI had, informed NBFC-MFIs, that RBI will, on
the last working day of every quarter, advise the average of the base rates of the five largest commercial
banks for the purpose of arriving at the interest rates to be charged by NBFC-MFIs to its borrowers in the
ensuing quarter. On 31.12.2018. RBI communicated that the applicable average base rate to be charged
by Non-Banking Financial Company – Micro Finance Institutions (NBFC-MFIs) to their borrowers for the
quarter beginning January 01, 2019 will be 9.15 per cent.

4. BASEL, RISK MANAGEMENT & PRUDENTIAL NORMS

Risk Weight for Consumer Credit except credit card receivables As per extant instructions, consumer
credit, including personal loans and credit card receivables but excluding educational loans, attracts a
higher risk weight of 125 per cent or higher, if warranted by the external rating of the counterparty. On
a review, RBI decided (12.09.19) to reduce the risk weight for consumer credit, including personal loans,
but excluding credit card receivables, to 100%. Other stipulations remain the same.
Basel III Regulations- Implementation of Leverage Ratio On Jun 28, 2019, RBI decided that the
minimum Leverage Ratio shall be 4% for Domestic Systemically Important Banks (DSIBs) and 3.5% for
other banks. Both the capital measure and exposure measure along with Leverage Ratio are to be
disclosed on a quarter-end basis. Banks must meet the minimum Leverage Ratio requirement at all times.
These guidelines become effective from the quarter commencing October 1, 2019.
CHIEF RISK OFFICER FOR NBFCs  The Re se rve Ba nk of India ha s de cide d t ha t , since t he NonBa nking
Financial Companies (NBFCs) play an important role in direct credit intermediation, NBFCs with asset size
of more than Rs. 50 billion shall appoint a Chief Risk Officer (CRO) with clearly specified roles and
responsibilities. The CRO will funct ion inde pe nde nt ly t o e nsure highe st st a nda rds of risk m a na ge me nt .
O shall be a senior official in the hierarchy of an NBFC and shall possess
As pe r t he guide line s, t he CR
adequate professional qualification/experience in the area of risk management. The CRO sha ll be
appointed for a fixed tenure with the approval of the Board and can be transferred / removed from his
post before completion of the tenure only with the approval of the Board. Any premature transfer/
removal shall be reported to the Department of Non-Banking Supervision of the Regional Office of the RBI
under whose jurisdiction the NBFC is registered. In ca se t he NBFC is list e d, a ny cha nge in incumbe ncy
of the CRO shall also be reported to the stock exchanges.
Risk Weights for exposures to NBFCs -At present claims on rated as well as unrated Non-deposit Taking
Systemically Important Non-Banking Financial Companies (NBFC-ND-SI), other than Asset Finance
Companies (AFCs), Non-Banking Financial Companies – Infrastructure Finance Companies (NBFCs-IFC), and
Non-banking Financial Companies – Infrastructure Development Funds (NBFCs-IDF), have to be uniformly
risk weighted at 100%. Exposures to AFCs, NBFCs – IFC, NBFCs – IDF and other NBFCs which are not NBFC-
ND-SI, are risk weighted as per rating assigned by the rating agencies accredited by the Reserve Bank of
India.On 22.02.19, RBI decided that exposures to all NBFCs, excluding Core Investment Companies (CICs),
will be risk weighted as per the ratings assigned by the rating agencies registered with SEBI and accredited
by the Reserve Bank of India, in a manner similar to that of corporates. Exposures to CICs, rated as well as
unrated, will continue to be risk-weighted at 100%.
Basel III Capital Regulations- Review of transitional arrangements
As per extant RBI guidelines, last tranche of 0.625% of Capital Conservation Buffer (CCB) was to be
implemented by 31.03.2019. On 10.01.19, RBI decided to defer the implementation of this tranche from
March 31, 2019 to March 31, 2020. Accordingly, minimum capital conservation ratios as applicable from
March 31, 2018 will also apply from March 31, 2019 till the CCB attains the level of 2.5% on March 31, 2020.
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 15 | P a g e
The pre-specified trigger for loss absorption through conversion / writedown of Additional Tier 1
instruments (PNCPS and PDI) shall remain at 5.5% of RWAs and will rise to 6.125% of RWAs on March 31,
2020.
Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), FALLCR against credit
disbursed to NBFCs and HFCs On 19.10.18, banks were permitted by RBI to reckon government securities
as Level 1 HQLA under FALLCR within the mandatory SLR requirement upto 0.5 per cent of the bank’s
NDTL in respect of their incremental lending to NBFCs and HFCs after October 19, 2018. This facility is
available up to December 31, 2018. Further, the single borrower limit for NBFCs (not financing
infrastructure) was increased from 10 per cent to 15 per cent of capital funds till December 31, 2018. In
order to further facilitate banks to lend to NBFCs and HFCs as indicated above, RBI decided on 28.12.18,
to extend the aforesaid facilities upto March 31, 2019. It may be noted that with effect from April 1,
2019, banks shall be guided by the instructions as per circular dated 01.12.16, in terms of which banks’
exposures to a single NBFC shall be restricted to 15 percent of their eligible capital base (Tier-1 capital).
NSFR norms for banks from April 2020: RBI -Net stable funding ratio (NSFR) norms, which mandate banks
to maintain a stable funding profile vis-à-vis the composition of their assets and off-balance sheet
activities, will be operational from April 2020. NSFR is defined as the amount of available stable funding
relative to the amount of required stable funding. After the global financial crisis of 2007, the Basel
Committee on Banking Supervision (BCBS) proposed certain reforms to strengthen global capital and
liquidity regulations for promoting a more resilient banking sector.
Revised norms for LCR to boost liquidity to lenders - RBI has provided an additional 2% liquidity window
within the mandatory Statutory Liquidity Ratio (SLR) requirement to the lenders, by tweaking Liquidity
Coverage Ratio (LCR) norms. This move will harmonize the liquidity requirements of banks with LCR; will
improve the banks’ cash position; will help release additional liquidity for lending by banks; and will also
hopefully make forex transactions easier by increasing the last-mile touch points of regulated entities to sell
foreign exchange for non-trade current account transactions.

5. NPA AND RECOVERY MANAGEMENT

SIDE-POCKETING- Segregation of bad debts or illiquid debt instruments from liquid portfolio is known as
“Side-pocketing”. SEBI, recently allowed mutual fund, this facility based on credit events to soothe the
nerves of Indian players who were worried over the fact that the illiquid bad debts were overshadowing
the returns generated by their liquid portfolio.
PERMISSION TO ACQUIRE FINANCIAL ASSET FROM OTHER ASSET RECONSTRUCTION CO’s In view of
amendment to the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities
Interest Act, 2002, RBI has decided to permit ARCs to acquire financial asset from other ARCs on
following conditions: a) The transaction is settled on cash basis; b) Price discovery for such transaction
shall not be prejudicial to the interest of Security Receipt holders; c) The selling ARC will utilize the
proceeds so received for the redemption of underlying Security Receipts; d) The date of redemption of
underlying Security Receipts and total period of realisation shall not extend beyond eight years from the
date of acquisition of the financial asset by the first ARC.
RELAXATION ON THE GUIDELINES TO NBFCS ON SECURITISATION TRANSACTIONS In order to
encourage NBFCs to securitise / assign their eligible assets, RBI had in Nov, 2018 decided to relax the
Minimum Holding Period (MHP) requirement for originating NBFCs, in respect of loans of original maturity
above 5 years, to receipt of repayment of six monthly instalments or two quarterly instalments (as
applicable), subject to the requirement that Minimum Retention Requirement (MRR) for such
securitization / assignment transactions shall be 20% of the book value of the loans being securitized /
20% of the cash flows from the assets assigned.  On a re vie w, RBI ha s de cided to extend the
dispensation provided therein till December 31, 2019.

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 16 | P a g e
 6. FOREIGN EXCHANGE AND INTERNATIONAL TRADE
NON-RESIDENT RUPEE ACCOUNTS – REVIEW OF POLICY -Any person resident outside India, having a
business interest in India, may open a Special Non-Resident Rupee A/c (SNRR A/c) with an authorised
dealer for the purpose of putting through bona fide transactions in rupees. With a view to promote the
usage of INR products by persons resident outside India, RBI in consultation with the Government of
India, to expand the scope of SNRR Account by permitting person resident outside India to open such
account for: External Commercial Borrowings in INR; Trade Credits in INR; Trade (Export/ Import)
Invoicing in INR; and Business related transactions outside International Financial Service Centre (IFSC)
by IFSC units at GIFT city like administrative expenses in INR outside IFSC, INR amount from sale of scrap,
government incentives in INR, etc. The account will be maintained with bank in India (outside IFSC).
Rationalised certain other provisions for operation of the Special Non Resident Rupee (SNRR) Account:
Remove the restriction on the tenure of the SNRR A/c opened for the purposes given as stated above as
the proposed transactions are more enduring in nature. Apart from Non-Resident Ordinary (NRO)
Account, permit credit of amount due / payable to non-resident nominee from account of a deceased
account holder to Non-Resident External (NRE) A/c or direct remittance outside India through normal
banking channels. The directions are issued under section 10(4) and 11(2) of the Foreign Exchange
Management Act, 1999 (42 of 1999).
EXPORT OF UNSOLD ROUGH DIAMONDS FROM SPECIAL NOTIFIED ZONE OF CUSTOMS WITHOUT EXPORT
DECLARATION FORM (EDF) FORMALITY For the lot / lots cleared at the center/s which are duly notified
under Customs Act, 1962 / specified by the Central Board of Indirect Taxes & Customs, Department of
Revenue, Ministry of Finance, Government of India for the above purpose, Bill of Entry shall be filed by
the buyer. AD bank may permit such import payments after being satisfied with bona-fides of the
transaction. Further, AD bank shall also maintain a record of such transactions. The directions contained
in this circular have been issued under Section 10(4) and Section 11(1) of the FEMA, 1999 (42 of 1999).
Priority Sector Loans - Export Credit-In order to boost the credit to export sector, RBI decided (on
20.09.19) to effect following changes pertaining to export credit: 1. Enhance the sanctioned limit, for
classification of export credit under PSL, from Rs.250 million per borrower to Rs.400 million per
borrower. 2. Remove the existing criteria of ‘units having turnover of up to Rs.1 billion’ The existing
guidelines for domestic scheduled commercial banks to classify ‘Incremental export credit over
corresponding date of the preceding year, upto 2 per cent of ANBC or Credit Equivalent Amount of Off-
Balance Sheet Exposure, whichever is higher’ under PSL will continue.
Voluntary Retention Route (VRR) for Foreign Portfolio Investors (FPIs) investment in debt
1.RBI drawn attention of (AD Category-I) banks to the following regulations: i. Foreign Exchange
Management (Permissible Capital Accounts Transactions) Regulations, 2000 notified vide Notification No.
FEMA 1/ 2000-RB dated May 03, 2000; ii. Foreign Exchange Management (Borrowing and Lending)
Regulations, 2018 notified vide Notification No. FEMA 3(R)/2018-RB dated December 17, 2018; iii. Foreign
Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations,
2017 notified vide Notification No. FEMA.20(R)/2017RB dated November 07, 2017; and iv. Foreign
Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 notified vide
Notification No. FEMA 25/RB – 2000 dated May 03, 2000. RBI referred (on 24.05.9) to circular dated
01.03.19 on ‘Voluntary Retention Route’ (VRR) for Foreign Portfolio Investors (FPIs) investment in debt.
Based on the feedback received, the directions have been revised. These changes include, inter alia, the
following:a) Introduction of a separate category, viz., VRR-Combined. b) The requirement to invest at
least 25% of the Committed Portfolio Size within one month of allotment has been removed. c) FPI are
provided with an additional option at the end of the retention period, viz., continue to hold their
investment until the date of maturity or the date of sale, whichever is earlier. FPIs that were allotted
investment limits under the ‘tap’ open during March 11, 2019 - April 30, 2019 may, at their discretion,
convert their full allotment to VRR-Combined.
Export and Import of Indian Currency -As per extant regulation, a person may take or send out of India
to Nepal or Bhutan and bring into India from Nepal or Bhutan, currency notes of Government of India and
Reserve Bank of India for any amount in denominations up to Rs.100. Further, an individual may carry to
Nepal or Bhutan, currency notes of Reserve Bank of India denominations above Rs.100, i.e. currency
notes of Rs.500 and/or Rs.1000 denominations, subject to a limit of Rs.25,000. On 20.03.19, RBI decided
that an individual travelling from India to Nepal or Bhutan may carry RBI currency notes in Mahatma Gandhi
(New) Series of denominations Rs.200 and/or Rs.500 subject to a total limit of Rs.25,000. Instructions
regarding currency notes of Government of India and RBI for any amount in denominations up to Rs.100/-
shall continue as hitherto.

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 17 | P a g e
Establishment of Branch Office (BO) / Liaison Office (LO) / Project Office (PO) or any other place of
business in India by foreign entities -
The extant Regulations (31.03.16) regarding requirement of prior approval of RBI, for opening of a
Branch Office (BO) / Liaison Office (LO) / Project Office (PO) or any other place of business in India,
where the principal business of the applicant falls in the Defence, Telecom, Private Security and
Information and Broadcasting sector, have been reviewed by RBI.On 28.03.19, RBI informed AD banks that
for opening of a BO/ LO/PO or any other place of business in India, where the principal business of the
applicant falls in the Defence, Telecom, Private Security and Information and Broadcasting sector, no prior
approval of RBI shall be required, if Government approval or license/permission by the concerned Ministry/
Regulator has been granted. Further, in the case of proposal for opening a PO relating to defence sector, no
separate reference or approval of Government of India shall be required if the said non-resident applicant has
been awarded a contract by/entered into an agreement with the Ministry of Defence or Service Headquarters
or Defence Public Sector Undertakings. It is clarified that the term “permission” used in the Notification does
not include general permission, if any, available under Foreign Direct Investment in the automatic route, in
respect of the above four sectors.
Compilation of R-Returns: Reporting under FETERS -To facilitate compilation of estimates of bilateral
trade in services, RBI decided (20.03.19) to incorporate an additional field for capturing the country code of
ultimate exporter/importer in the BoP file-format under FETERS. For export of services, banks may use the
transaction information available with them to report country-code of the ultimate exporting country.
Further Form-A2 has also been revised for capturing the required country information for import of services.
The revised format is for reporting of R-Returns on fortnightly basis (15th and end-month) for forex
transactions performed w.e.f. April 01, 2019. AD Banks should make the required changes in their work-
flows and information systems to capture the required additional data accordingly to comply with the
guidelines.
Investment by Foreign Portfolio Investors (FPI) in Government Securities Medium Term Framework
Revision of investment Limits for 2019-20 -
1. FPI investment limit in Central Government securities (G-secs), State Development Loans (SDLs) and
corporate bonds shall be 6%, 2%, and 9% of outstanding stocks of securities, respectively, in FY 2019-20.
2.The allocation of increase in G-sec limit over the two sub-categories – ‘General’ and ‘Longterm’ – has
been set at 50:50 for the year 2019 20. The entire increase in limits for SDLs has been added to ‘General’
sub-category of SDLs.
3. The Coupon reinvestment arrangement for G-secs extended to SDLs. Accordingly, the revised limits
for the various categories, after rounding off, would be as under :
Revised Limits for FPI Investment in Debt - 2019-20 (Rupees billion)
G-Sec G-Sec SDL SDL Corp Tot al General L ong Term GeneralLong TermB onds De bt
Current Limit 2,233 923 381 71 2,891 6,499
New Limit : HY Apr-Sep, 2019 2,347 1,037 497 71 3,031 6,983
New Limit : HY Oct 19-Mar 2020 2,461 1,151 612 71 3,170 7,465

Non-resident Participation in Rupee Interest Rate Derivatives Markets (Reserve Bank) Directions,
2019 -RBI issued the Directions on 27.03.19. These Directions shall be applicable to Rupee interest rate
derivative transactions in India, undertaken on recognized stock exchanges, electronic trading platforms
(ETP) and Overthe-Counter (OTC) markets to the extent stated herein. A non-resident can undertake
transactions in the Rupee interest rate derivatives markets to hedge an exposure to Rupee interest rate
risk and for purposes other than hedging.
Transactions for the purpose of hedging interest rate risk: A nonresident may undertake these
derivatives in India to hedge interest rate risk using any permitted interest rate derivative product
transacted on recognized stock exchanges, ETPs or OTC markets.
Transactions for purposes other than hedging interest rate risk i. Non-individual Non-residents may
undertake Overnight Indexed Swaps (OIS) transactions :
(a) These transactions may be undertaken directly with a market-maker in India, or by way of a ‘back-
to-back’ arrangement through a foreign branch/ parent/group entity (foreign counterpart) of the
market-maker. (b) A market-maker shall enter into a ‘back-to-back’ arrangement.
1) The Price Value of a Basis Point (PVBP) of all outstanding OIS positions undertaken by all non-
residents shall not exceed the amount of INR 3.50 billion (PVBP cap).
2) The PVBP of all outstanding OIS positions for any non-resident (including related entities) shall not
exceed 10% of the PVBP cap.

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3) Clearing Corporation of India Ltd. (CCIL) shall publish the methodology for calculation of the PVBP and
monitor as well as publish utilization of the PVBP limit on a daily basis.
Foreign Portfolio Investors (FPIs), collectively, may also transact in interest rate futures (IRF) up to a limit
of net long position of INR 50 billion.
Remittance/Payments : All payments of a non-resident may be routed through a Rupee account of the non-
resident or, where the non-resident doesn’t have a Rupee account in India, through a vostro account
maintained with an AD bank in India. The market-maker shall maintain complete details of such
transactions.
KYC for the non-resident: Market-maker shall ensure that non-resident clients are from an FATF
compliant country. Market-makers shall also ensure that non-resident clients comply with the KYC
requirements.
Investment by Foreign Portfolio Investors (FPI) in Debt -
In terms of AP (DIR Series) Circular No. 31 dated June 15, 2018, no FPI shall have an exposure of more
than 20% of its corporate bond portfolio to a single corporate (including exposure to entities related to
the corporate). As per circular dated 15.02.19, in order to encourage a wider spectrum of investors to
access the Indian corporate debt market, RBI decided to withdraw this provision with immediate effect.
ECB facility for Resolution Applicants under Corporate Insolvency Resolution Process As per ECB policy
dated 16.01.19, ECB proceeds cannot be utilised for repayment of domestic Rupee loans, except when the
ECB is availed from a Foreign Equity Holder as defined in the aforesaid framework.
On a review on 07.02.19, RBI, to relax the end-use restrictions for resolution applicants under the
Corporate Insolvency Resolution Process (CIRP) decided and allow them to raise ECBs from the recognised
lenders, except the branches/ overseas subsidiaries of Indian banks, for repayment of Rupee term loans of
the target company under the approval route. Accordingly the resolution applicants, who are otherwise
eligible borrowers, can forward such proposals to raise ECBs, through their AD bank, to RBI, for approval.
Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit
Government of India decided to include merchant exporters also, w.e.f. January 2, 2019, under the ongoing
Interest Equalisation Scheme for Pre and Post Shipment Rupee Export Credit and allow them interest
equalisation at the rate of 3% on credit for export of products covered under 416 tariff lines identified
under the Scheme.
Limit for the stock of External Commercial Borrowings -On 20.12.2018, RBI decided, in consultation
with the Government of India to have a rule-based dynamic limit for outstanding stock of External
Commercial Borrowings (ECB) at 6.5 per cent of GDP at current market prices. Based on the GDP figures
as on March 31, 2018, the stock limit works out to USD 160 billion for the current financial year. The
outstanding stock of ECB as on September 30, 2018 stood at USD 126.29 billion.
Licensing as Authorised Dealer- Category II : A large segment of population is increasingly getting
connected with forex transactions on individual accounts. In order to increase the accessibility and efficiency of
services extended to the members of the public for their day-to-day non-trade current account transactions, RBI
decided on 16.04.19, that Systemically Important Non-Deposit taking Investment and Credit Companies shall be
eligible for Authorized Dealer- Category II (AD-Cat II) licence, subject to meeting the following conditions: NBFCs
offering such services shall have a ‘minimum investment grade rating’.
NBFCs offering such services shall put in place a board approved policy on (a) managing the risks, including
currency risk, if any, and (b) handling customer grievances arising out of such activities. A monitoring mechanism,
at least at monthly intervals, shall be put in place for such services. The eligible NBFCs desirous of undertaking
AD-Cat II activities shall approach the Reserve Bank of India, Foreign Exchange Department, Central Office,
Mumbai for the AD-Cat II licence.
Investment by Foreign Portfolio Investors (FPI) in Debt – Review -Further to RBI circulars dated
07.11.17 and 15.06.18, as a measure to broaden access of non-resident investors to debt instruments in
India, Foreign Portfolio Investors (FPI) have been permitted by RBI on 25.04.19, to invest in municipal
bonds. FPI investment in municipal bonds shall be reckoned within the limits set for FPI investment in State
Development Loans (SDLs).
ECB facility for Resolution Applicants under Corporate Insolvency Resolution Process As per ECB policy
dated 16.01.19, ECB proceeds cannot be utilised for repayment of domestic Rupee loans, except when the
ECB is availed from a Foreign Equity Holder as defined in the aforesaid framework. On a review on
07.02.19, RBI, to relax the end-use restrictions for resolution applicants under the Corporate Insolvency
Resolution Process (CIRP) decided and allow them to raise ECBs from the recognised lenders, except the
branches/ overseas subsidiaries of Indian banks, for repayment of Rupee term loans of the target company
under the approval route.Accordingly the resolution applicants, who are otherwise eligible borrowers,
can forward such proposals to raise ECBs, through their AD bank, to RBI, for approval.
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 19 | P a g e
7. DIGITAL BANKING
Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using
authorised Payment Systems - RBI observed that a large number of customer complaints
emanate on account of unsuccessful or ‘failed’ transactions’.A ‘failed transaction’ is a transaction
not fully completed due to any reason not attributable to the customer. It could be failure in
communication links, non-availability of cash in an ATM, time-out of sessions, credits could not be
effected to the beneficiary account due to lack of full information or lack of proper information and
delay in initiating a reversal transaction. On 20.09.19, framework for TAT for failed transactions and
compensation therefor was circulated by RBI. The principle behind the TAT is based on the following :
1. If the transaction is a ‘credit-push’ funds transfer and the beneficiary account is not credited
while the debit to originator has been effected, then credit is to be effected within the prescribed
time period failing which the penalty has to be paid to the beneficiary; 2. If there is delay in
initiation of a transaction at the originator bank’s end beyond the TAT, then penalty has to be paid to
the originator.
General Instructions covering the TAT : 1. The prescribed TAT is the outer limit for resolution of failed
transactions. 2. Wherever financial compensation is involved, the same shall be effected to the
customer’s account suo moto, without waiting for a complaint or claim from customer. 3. Customers
who do not get the benefit of redress of the failure as defined in the TAT, can register a complaint to the
Banking Ombudsman of Reserve Bank of India. 4. This directive comes into effect from Oct 15, 2019. 5.
‘T’ is the day of transaction and refers to the calendar date. ‘R’ is the day on which the reversal is
concluded and funds are received by issuer / originator. Reversal should be effected at issuer /
originator end on same day when the funds are received from the beneficiary end. 6. Domestic
transactions (i.e.originator and beneficiary are in India) are covered under the framework.
Turn Around Time (TAT) and customer compensation for failed transactions using authorised
Payment Systems- 1. ATM/Micro ATM: Customer’s account debited but cash not dispensed. Pro-
active reversal (R) of failed transaction within T + 5 days.
2.a : Card to card transfer- Card a/c debited but the beneficiary card account not credited.
Transaction to be reversed (R) latest within T + 1 day 2.b : Point of Sale (PoS) (Card Present)-
including Cash at PoS A/c debited but confirmation not received at merchant location i.e., charge-
slip not generated. Auto-reversal within T + 5 days.
2.c : Card Not Present (CNP) (e-commerce)Account debited but confirmation not received at
merchant’s system. Auto-reversal within T + 5 days.
3: IMPS : Account debited but the beneficiary account is not credited.
If unable to credit to beneficiary account, auto reversal (R) by Beneficiary bank on T + 1 day.
4.a : UPI : Account debited but the beneficiary account is not credited (transfer of funds).
If unable to credit the beneficiary account, auto reversal (R) by Beneficiary bank on T + 1 day.
4.b: UPI : Account debited but transaction confirmation not received at merchant location (payment to
merchant). Auto-reversal within T + 5 days.
5.a : AEPS : A/c debited but transaction confirmation not received at merchant location. Acquirer to
initiate “Credit Adjustment” within T + 5 days.
5.b : AEPS : A/c debited. Beneficiary a/c not credited. Acquirer to initiate Credit Adjustment within T
+ 5 days. 6: APBS : Delay in crediting beneficiary’s account. Beneficiary bank to reverse within T + 1
day.
7.A : NACH : Delay in crediting beneficiary’s account or reversal of amount.
Beneficiary bank to reverse within T + 1 day.
7.B: NACH : Account debited despite revocation of debit mandate with the bank by the customer.
Customer’s bank responsible for debit. Resolution within T + 1 day.
8.a : PPIs- Cards / wallets : Off-Us transaction: The transaction will ride on UPI, card network, IMPS,
etc., as the case may be. The TAT and compensation rule of respective system shall apply.
8.B: PPIs- Cards / wallets : On-Us transaction: Beneficiary’s PPI not credited. PPI debited.
Transaction confirmation not received by merchant. R e v e r s a l effected in Remitter’s account
within T + 1 day. Compensation : Rs.100 per day in all cases, beyond the period of time limit.
IMPS = Immediate Payment System, UPI = Unified Payments Interface, AEPS = Aadhaar Enabled
Payment System (including Aadhaar Pay), APBS = Aadhaar Payment Bridge System, NACH = National
Automated Clearing House, PPI = Prepaid Payment Instruments– Cards / Wallets

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 20 | P a g e
Ombudsman for Digital Transactions RBI introduced the Ombudsman Scheme for Digital Transactions, 2019 u/s 18
Payment and Settlement Systems Act, 2007, w.e.f. January 31, 2019. Objective : To provide an expeditious and
cost-free apex level mechanism for resolution of complaints regarding digital transactions undertaken by
customers of the System Participants. Appointment of Ombudsman: He/she is a senior official,
appointed (max for 3 years) by RBI. 21 Ombudsman have been appointed by RBI located mostly in State
Capitals. (Sacretariat cost borne by RBI). Ombudsman is to send report to Governor RBI as on 30th Jun
every year on general review of activities. Entities covered : System Participants (SP) are the entities
(other than a bank) participating in the payment system excluding system provider. Grounds of
complaints: Deficiency in services and nonadherence of RBI instructions by System Participants such as
Prepaid Payment Instruments; Mobile / Electronic Fund Transfers; 3) Payment through Unified
Payments Interface (UPI) / Bharat Bill Payment System (BBPS) / Bharat QR Code / UPI QR Code: Grounds
of complaint generally include: Failure in crediting merchant’s account within reasonable time;Failure to
load funds within reasonable time in wallets / cards; Unauthorized electronic fund transfer;
a) Non-Transfer / Refusal to transfer/ failure to transfer within reasonable time, balance in PPI to the
holder’s ‘own’ bank account or back to source, expiry of validity period etc., of PPI;
b) Failure or refusal to refund within reasonable time in case of unsuccessful / returned / rejected /
cancelled / transactions;
c) Non-credit / delay in crediting the account of PPI holder as per the terms and conditions;
d) Failure to effect online payment / fund transfer within reasonable time;
e) Unauthorized electronic fund transfer;
f) Failure to act upon stop-payment instructions;
g) Failure to reverse the amount debited from customer account in cases of failed payment transactions
within prescribed timeline;
h) Failure in crediting funds to the beneficiaries’ account; NOTE: For digital transactions done on third
party platforms, it will be the responsibility of the Payment Service Provider to resolve customer disputes
arising out of such transactions.
Time to file a complaint: For redressal, the complainant must first approach the System Participant
concerned. If the System Participant does not reply within a period of one month, or rejects the
complaint, or if the complainant is not satisfied with the reply given, the complainant can file the
complaint with the Ombudsman within whose jurisdiction the branch or office of the System Participant
complained against, is located. For complaints arising out of services with centralized operations, it shall
be filed before the Ombudsman within whose territorial jurisdiction the billing / declared address of the
customer is located.
Grounds of rejection by the Ombudsman: If SP is not covered under the Scheme. If one has not
approached SP concerned in the first instance for redressal.If the subject matter is not pertaining to the
grounds of complaint. Complaint not made within prescribed period. (Ombudsman may accept a complaint
made after such period, before the expiry of limitation period under Limitation Act, 1963). Complaint is
pending for disposal / dealt with at any other forum (court, consumer court etc.) Complaint settled through
Ombudsman in any previous proceedings.Complaint is frivolous or vexatious.Complaint falls under the
disputes covered under Section 24 of the Payment and Settlement Systems Act, 2007.The complaint
pertains to dispute arising from a transaction between customers.
Procedure for filing the complaint : A complaint can be filed by complainant or authorized
representative (other than Advocate), written on a plain paper and sending it by post/ fax/hand delivery or
by email. A complaint form is available on RBI’s website, though, it is not mandatory to use this format.
There are no charges or any fee for filing / resolving customers’ complaints.Types of settlement of
complaint : It can be settlement by agreement or conciliation and mediation or by way of passing of
award. Action by Ombudsman on a complaint:
The proceedings will be summary in nature.
1) Effort shall be made by Ombudsman to promote settlement through conciliation/ mediation by
agreement between parties. Based on such agreement, Ombudsman will pass an order as per terms of
settlement which becomes binding on both parties.
2) If the system Participant is found to have adhered to the norms and the complainant is informed
about this and complainant does not raise objections, within the time frame provided, the Ombudsman
may pass an order to close the complaint.
2) Ombudsman can pass an Award after providing reasonable opportunity. It is upto the complainant to
accept the Award as full and final settlement or reject it.
Award and compensation: Ombudsman can award compensation limited to loss arising directly out of
omission or commission of SP, or Rs.20 lac
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 21 | P a g e
(two million) whichever is lower. The compensation shall be over and above the disputed amount.
Additional compensation up to Rs.1 lac (0.1 million) can be awarded for effort, time, mental agony and
harassment. The award shall lapse, if complainant does not send acceptance for full and final
settlement, to System Participant, within 30 days of receipt of copy of award.
The System Participant shall comply with the award, within 30 days of receipt of such acceptance and
send compliance report to Ombudsman. The System Participant shall send a report of compliance to RBI
within 15 of award becoming final.
If System Participant does not implement the award, the complaint can approach RBI.
Appeal : A person aggrieved by such Award can approach the Appellate Authority (Deputy Governor-in-
Charge of the department of the RBI implementing the Scheme) within 30 days of the date of receipt of
communication of Award or rejection. System Participant can appeal (with permission of CMD/CEO/ED)
within 30 days from the date, when acceptance was received from complainant. The Appellate Authority
may allow a further period not exceeding 30 days. Nodal officer : SP shall appoint nodal officer at their
Regional/Zonal Office who shall be responsible to provide information to Ombudsman concerned.
OPENING OF FIRST COHORT UNDER THE REGULATORY SANDBOX (RS) The Reserve Bank announces the
opening of first cohort under the Regulatory Sandbox (RS) with ‘Retail Payments’, as its theme. The
adoption of ‘Retail Payments’ as the theme is expected to spur innovation in digital payments space and
help in offering payment services to the unserved and underserved segment of the population. Migration
to digital modes of making a payment can obviate some of the costs associated with a cash economy and
can give customers a friction-free experience. The innovative products/services which, among others,
shall be considered for inclusion under RS are as follows: • Mobile Payments including feature phone
based Payment Services: General innovation in mobile payment services has focussed on or supported
appbased access, limited to smartphones and such devices. • Offline Payment Solutions: Providing an
option of off-line payments through mobile devices for furthering the adoption of digital payments is
required. • Contactless Payments: Contactless payments, while decreasing the time taken for payment
checkout, also ease payments for small ticket payment transactions. Tokenisation technologies often
form the basis of facilitating seamless e-commerce experiences fuelled by mobile and other connected
devices. The rapid growth in devices provides a significant opportunity for payments through any form
factor and anywhere.

FURTHERING DIGITAL PAYMENTS RBI has stated that efforts have resulted in a rapid growth in the retail
digital payment systems. To further empower every citizen with an Exceptional (e) Payment Experience,
and provide her access to a bouquet of options, the RBI proposes to take the following steps: • Mandate
banks not to charge savings bank account customers for online transactions in the NEFT system with
effect from January 2020. • Operationalise the Acceptance Development Fund to increase acceptance
infrastructure w.e.f. January 1, 2020. • Constitute a Committee to assess the need for plurality of QR
codes and merits of their co-existence or convergence from both systemic and consumer viewpoints. •
Permit all authorised payment systems and instruments (non-bank PPIs, cards and UPI) for linking with
National Electronic Toll Collection (NETC) FASTags. Going forward, this will facilitate the use of FASTags
for parking, fuel, etc.
Expanding and Deepening of Digital Payments Ecosystem With a view to expanding and deepening the
digital payments ecosystem, RBI decided (07.10.19) that all State/ UT Level Bankers Committees (SLBCs/
UTLBCs) shall identify one district in their respective States/ UTs on a pilot basis in consultation with
banks and stakeholders. The identified district shall be allotted to a bank having significant footprint
which will endeavour to make the district 100% digitally enabled within one year, in order to enable
every individual in the district to make/ receive payments digitally in a safe, secure, quick, affordable
and convenient manner. This would, inter alia, include providing the necessary infrastructure and
literacy to handle such transactions. SLBCs/ UTLBCs shall endeavour to ensure that to the extent
possible, districts identified are converged with the ‘Transformation of Aspirational Districts’ programme
of the Government of India. The allotment of the identified district to a bank should be done, as far as
possible, through mutual consultation and voluntary acceptance by the bank. Further, SLBC/ UTLBC
Convenor Banks are to monitor the progress made in this regard on a quarterly basis and report the same
to concerned Regional Offices/ SubOffices of the Reserve Bank of India.
Bank / Branch details under the Central Information System for Banking Infrastructure (CISBI) RBI
maintains the directory of all bank branches / offices / Non-Administratively Independent Offices (NAIOs)
/ Customer Service Points (CSPs) in India, [known as the “Master Office File” (MOF) system], which is
updated based on Proforma-I and ProformaII, submitted by banks through e-mail. The system allots Basic
Statistical Return (BSR) code / Authorised Dealer (AD) code to bank branches / offices / NAIOs / CSPs.
Consistent with the needs of branch licencing and financial inclusion policies as well as the need for

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 22 | P a g e
requisite coverage of additional dimensions / features, a new reporting system, viz., Central Information
System for Banking Infrastructure (CISBI) (https:// cisbi.rbi.org.in), has been web-deployed by RBI
(11.10.19) to replace the legacy MOF system. Under the new system, all co-operative banks are required
to submit their information in a single Proforma online on CISBI portal, as compared with the earlier
system of submitting Proforma-I & Proforma-II separately through e-mail. All the past information
reported by banks has been migrated to CISBI and additional information should be reported in CISBI
henceforth. The CISBI portal contains the relevant circulars, user manuals and other relevant documents
to facilitate reporting. RBI has provided login credentials to Nodal Officers of banks for submitting their
information in CISBI. Banks should submit information on CISBI portal as per guidelines and thereafter
bank branch / office / NAIO / CSP codes would be allotted by CISBI after due validations. In case of
status change, banks need to edit only the relevant part. All cooperative banks should submit
immediately and in any case not later than one week, the information relating to opening, closure,
merger, shifting and conversion of bank branches / offices / NAIOs / CSPs online through CISBI portal. To
ensure correctness of data on CISBI, in the last week of every month, banks shall generate a ‘NIL Report’
in CISBI for position as on last day of the previous month, indicating the total number of functioning
branches, offices, NAIOs, CSPs; and submit it through CISBI after authenticating its correctness. Banks
can also use the facility to access / download the data related to them. RBI further advised that CISBI
also has provision to maintain complete bank level details (e.g. bank category, bank-group, bank code,
type of license issued, registration details, area of operation, addresses of offices, contact details of
senior officials, etc.) and history of all the changes with time stamp. After gaining first time access of
the system, banks shall ensure to submit correct and updated Bank Level information in all the fields
where submission / updation rights are available with the bank. After initial submission of information on
CISBI portal, a one-time confirmation stating that “Correct and updated Bank level information has been
submitted on CISBI” shall be sent by banks to the concerned Regional Office of Department of Co-
operative Bank Supervision within one month of issuance of this circular. Any subsequent changes in the
bank level information shall be submitted for updation on the CISBI portal on immediate basis by the
banks.
ON-TAP AUTHORISATION OF PAYMENT SYSTEMS- With intention of encouraging competition and
encourage innovation, RBI has been decided to offer ontap authorisation for the following entities: •
Bharat Bill Payment Operating Unit (BBPOU). • Trade Receivables Discounting System (TReDS). • White
Label ATMs (WLAs). The KYC requirements for retail payment systems shall be as per the Master
Directions on Know Your Customer (KYC). The payment system operators should ensure interoperability
among different retail payment systems. The authorisation would be given based on (a) merits of the
proposal, and (b) Reserve Bank’s assessment of potential for additional entities in that segment. The
RBI, after reviewing the bank’s liquidity position and its ability to pay its depositors has decided to
further enhance the limit for withdrawal to Rs. 40,000/- (Rupees Forty Thousand only), inclusive of Rs.
25,000 allowed earlier. The name of "The Catholic Syrian Bank Limited" has been changed to "CSB Bank
Limited" in the Second Schedule to RBI Act, 1934 w.e.f. June 10, 2019.
Bharat Bill Payment System - Expansion of biller categories As per RBI guidelines dated 28.11.14, BBPS,
is an interoperable platform for repetitive bill payments, which currently covers bills of five segments
viz. Direct to Home (DTH), Electricity, Gas, Telecom and Water. RBI decided (on 16.09.19) to expand the
scope and coverage of BBPS to include all categories of billers who raise recurring bills (except prepaid
recharges) as eligible participants, on a voluntary basis.
Usage of ATMs – Free ATM transactions – Clarifications It came to notice of RBI that transactions that
have failed due to technical reasons, nonavailability of currency in ATMs, etc., are also included in
number of free ATM transactions. On 14.08.19, RBI clarified that transactions which fail on account of
technical reasons like hardware, software, communication issues; non-availability of currency notes in
the ATM; and other declines ascribable directly / wholly to the bank / service provider; invalid PIN /
validations; etc., shall not be counted as valid ATM transactions for the customer. Consequently, no
charges therefor shall be levied. Further, the non-cash withdrawal transactions (such as balance enquiry,
cheque book request, payment of taxes, funds transfer, etc.), which constitute ‘on-us’ transactions (i.e.,
when a card is used at an ATM of the bank which has issued the card) shall also not be part of the
number of free ATM transactions.
CASH WITHDRAWAL AT PoS DEVICES -The Reserve Bank of India has issued a circular wherein they have
said that it has come to their notice that the instructions pertaining to Cash withdrawal at Point of Sale
(PoS) have not been implemented in letter and spirit. The central bank has reiterated the instructions
with a view to provide for cash withdrawals at PoS devices enabled for all debit cards / open loop
prepaid cards issued by banks. The instructions outlined therein, limit:  Ca sh withdrawal to Rs. 1000/-

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 23 | P a g e
per day in Tier I and II centres and Rs. 2,000/- per day in Tier III to VI centres;  Cust om e r cha rge s, if
any, on such cash withdrawals to not be more than 1% of the transaction amount.  The fa cility is made
available at merchant establishments designated by the bank after a process of due diligence. Such
merchant establishments may be advised to clearly indicate / display the availability of this facility along
with the charges, if any, payable by the customer.  The fa cilit y is available irrespective of whether the
card holder makes a purchase or not. In case the facility is availed along with the purchase of
merchandise, the receipt generated shall separately indicate the amount of cash withdrawn.  Ba nks
offering this facility shall have an effective customer redressal mechanism. Complaints in this regard will
fall within the ambit of the Banking Ombudsman Scheme.  Ea rlie r t his m ont h, RBI sa id t ha t ba nks a lso
can't include noncash withdrawal transactions like balance enquiry, cheque book request, payment of
taxes and funds transfer under free ATM transactions.  Ba nks a re a lso a dvise d t o submit da t a on ca sh
withdrawals at PoS devices to the CGM, Deptt of Payment and Settlement Systems, Mumbai, on quarterly
basis within 15 days of the end of quarter as per the format enclosed.
PROCESSING OF E-MANDATE ON CARDS FOR RECURRING TRANSACTIONS  The Re se rve Ba nk of India
has over the past decade, put in place various safety and security measures for card payments, including
the requirement of Additional Factor of Authentication (AFA), especially for ‘card-not-present’
transactions.  Re curring t ra nsa ct ions ba se d on st a nding inst ruct ions give n t o t he m e rcha nts by the
cardholders were brought within the ambit of Additional Factor Authentication.  The RBI ha s be e n
receiving requests from industry stakeholders to allow processing of e-mandate on cards for recurring
transactions with AFA during e-mandate registration and first transaction, and simple / automatic
subsequent successive transactions.  Ke e ping in vie w t he cha nging pa ym e nt ne e ds a nd t he re quire me nt
to balance the safety and security of card transactions with customer convenience, RBI has decided to
permit processing of e-mandate on cards for recurring transactions (merchant payments) with AFA during
e-mandate registration, modification and revocation, as also for the first transaction, and simple /
automatic subsequent successive transactions. Applicability: The e-mandate arrangement on cards shall
be only for recurring transactions and not for a ‘once-only’ payment. These guidelines is applicable for
transactions performed using all types of cards – debit, credit and Prepaid Payment Instruments (PPIs),
including wallets. Registration of card details for e-mandate based recurring transactions: A cardholder
desirous of opting for e-mandate facility on card shall undertake a one-time registration process, with
AFA validation by the issuer. An e-mandate on card for recurring transactions shall be registered only
after successful AFA validation, in addition to the normal process by the issuer.  Re gist ra t ion sha ll be
completed only after all requisite information is obtained by the issuer, including the validity period of
the e-mandate and other audit trail related requirements. The facility to modify the validity period of
the e-mandate at a later stage, if required, shall also has to be provided for.
During the registration process, the cardholder shall be given an option to provide the e-mandate for
either a pre-specified fixed value of recurring transaction or for a variable value of the recurring
transaction; in the case of the latter, the cardholder shall clearly specify the maximum value of recurring
transactions, subject to the overall cap fixed by the RBI (currently Rs. 2,000/- per transaction).  Any
modification in existing e-mandate shall entail AFA validation by the issuer. Processing of first
transaction and subsequent recurring transactions:  W hile processing the first transaction in e-mandate
based recurring transaction series, AFA validation shall be performed. If the first transaction is being
performed along with the registration of e-mandate, then AFA validation may be combined. All such AFA
validation shall be as per extant instructions of the RBI.  Subse que nt re curring t ra nsa ct ions hs all be
performed only for those cards which have been successfully registered and for which the first
transaction was successfully authenticated and authorised. These subsequent transactions may be
performed without AFA. Pre-transaction notification:  Asa risk mitigant and customer facilitation
measure, the issuer shall send a pre-transaction notification to the cardholder, at least 24 hours prior to
the actual charge / debit to the card. While registering e-mandate on the card, the cardholder shall be
given facility to choose a mode among available options (SMS, email, etc.) for receiving the pre-
transaction notification from the issuer in a clear, unambiguous manner and in an understandable
language.  The fa cilit y for cha nging t his m ode of re ce iving pre t ra nsa ct ion not ifica t ion, sha ll a lso be
provided to the cardholder. The pre-transaction notification shall, at the minimum, inform the
cardholder about the name of the merchant, transaction amount, date / time of debit, reference
number of transaction/ e-mandate, reason for debit, i.e., e-mandate registered by the cardholder.  On
receipt of the pre-transaction notification, the cardholder shall have the facility to opt-out of that
particular transaction or the e-mandate. Any such opt-out shall entail AFA validation by the issuer. On
receipt of intimation of such an opt-out, the issuer shall ensure that the particular transaction is not
effected / further recurring transactions are not effected. A confirmation intimation to this effect shall
be sent to the cardholder.  Post-transaction notification: In line with the extant instructions, the issuer
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 24 | P a g e
shall send post-transaction alert / notification to the cardholder. This notification shall, at the minimum,
inform the cardholder about the name of the merchant, transaction amount, date / time of debit,
reference number of transaction / e-mandate, reason for debit, i.e., e-mandate registered by the
cardholder.
Transaction limit and velocity check:  The ca p / limit for e-mandate based recurring transactions
without AFA will be Rs. 2,000/- per transaction. Transactions above this cap shall be subject to AFA. 
The maximum permissible limit for a transaction under this arrangement shall be Rs. 2,000/-.  No
charges shall be levied or recovered from the cardholder for availing the e-mandate facility on cards for
recurring transactions.  The lim it of Rs. 2, 000/- per transaction is applicable for all categories of
merchants who accept repetitive payments based on such e-mandates. Suitable velocity checks and other
risk mitigation procedures shall be put in place by issuers.
Withdrawal of e-mandate:  The issue r sha ll provide t he ca rdholde r a n online fa cilit y ot withdraw any e-
mandate at any point of time following which no further recurring transactions shall be allowed for the
withdrawn e-mandate. (Note: The exception to this will be a pipeline transaction for which pre-
transaction notification has already been sent to the cardholder, but the debit has not been
communicated to or received by the cardholder, and the emandate withdrawal happens during the
interregnum.) Information about this facility to withdraw e-mandate at any point of time, shall be clearly
communicated to the cardholder at the time of registration and later on whenever felt necessary. The
withdrawal of any e-mandate by the cardholder shall entail AFA validation by the issuer. In respect of
withdrawn e-mandate/s, the acquirers shall ensure that the merchants on-boarded by them, delete all
details, including payment instrument information.
Dispute resolution and grievance redressal:  An a ppropria t e re dre ss syst e m sha ll be put in pla ce by
the issuer to facilitate the cardholder to lodge grievance/s. Card networks shall also put in place dispute
resolution mechanism for resolving these disputes with clear Turn Around Time (TAT). The card networks
shall make suitable arrangements to separately identify chargebacks / dispute requests in respect of e-
mandate based recurring transactions. RBI instructions on limiting liability of customers in unauthorised
transactions shall be applicable for such transactions as well.
USAGE OF ATMS – FREE ATM TRANSACTIONS -  RBI ha s inform e d t ha t it ha s com e t o t he ir not ice t ha t
transactions that have failed due to technical reasons, nonavailability of currency in ATMs, etc., are also
included in the number of free ATM transactions.  RBI ha s cla rifie d t ha t t ra nsa ct ions which fail on
account of technical reasons like hardware, software, communication issues; non-availability of currency
notes in the ATM; and other declines ascribable directly / wholly to the bank / service provider; invalid
PIN / validations; etc., shall not be counted as valid ATM transactions for the customer. Consequently, no
charges therefor shall be levied.  Non-cash withdrawal transactions (such as balance enquiry, cheque
book request, payment of taxes, funds transfer, etc.), which constitute ‘on-us’ transactions (i.e., when a
card is used at an ATM of the bank which has issued the card) shall also not be part of the number of free
ATM transactions.
National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) systems – Waiver
of charges RBI reviewed the various charges levied by it on the member banks for transactions processed
in the RTGS and NEFT systems. To provide an impetus to digital funds movement, RBI on 11.06.19,
decided that with effect from July 1, 2019, processing charges and time varying charges levied on banks
by Reserve Bank of India (RBI) for outward transactions undertaken using the RTGS system, as also the
processing charges levied by RBI for transactions processed in NEFT system will be waived by RBI. The
banks are advised to pass on the benefits to their customers for undertaking transactions using the RTGS
and NEFT systems with effect from July 1, 2019.
Security Measures for ATMs RBI decided to implement following recommendations of Committee on
Currency Movement (CCM) [Chair: Shri D.K. Mohanty] as per circular dated RBI-14.06.2019:
a) All ATMs shall be operated for cash replenishment only with digital One Time Combination (OTC) locks.
b) All ATMs shall be grouted to a structure (wall, pillar, floor, etc.) by Sept 30, 2019, except ATMs
installed in highly secured premises such as airports, etc. which have adequate CCTV coverage and are
guarded by state / central security personnel. c) Banks may also consider rolling out a comprehensive
esurveillance mechanism at the ATMs for timely alerts and quick response.
Discontinuation of the requirement of Paper to Follow (P2F) for State Government Cheques With a
view to enhancing efficiency in cheque clearing, Reserve Bank has introduced Cheque Truncation System
(CTS) for clearance of cheques, facilitating the presentation and payment of cheques without their
physical movement. P2F was discontinued for Central Govt. cheques with effect from February 2016.
Taking this initiative forward, RBI decided (20.06.19) in consultation with the Office of the Comptroller &
Auditor General of India (C&AG), Government of India, to dispense with the current requirement of

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 25 | P a g e
forwarding the paid State Government cheques in physical form (commonly known as P2F) to the State
Government departments/treasuries
INCREASE IN RTGS OPERATING HOURS -Presently, for customer transactions, RTGS is available for from
8:00 am to 6:00 pm and for inter-bank transactions from 8:00 am to 7:45 pm. To increase the availability
of the RTGS system, RBI decided (21.08.19) extended operating hours of RTGS and commence operations
from 7:00 am. RTGS time window w.e.f Aug 26, 2019 will be as under:
The RTGS time window with effect from August 26, 2019 will, therefore, be as under :
Event Time
Open for Business 07.00 hours
Customer transactions (Initial Cut-off) 18.00 hours
Inter-bank transactions (Final Cut-off) 19.45 hours
IDL Reversal 19.45 hours – 20.00 hours
End of Day 20.00 hours
TECHNICAL SPECIFICATIONS : ACCOUNT AGGREGATOR (AA) ECOSYSTEM The NBFC-AA consolidates
financial information of a customer held with different financial entities, spread across financial sector
regulators adopting different IT systems and interfaces. In order to ensure that such movement of data is
secured, duly authorised, smooth and seamless, it has been decided to put in place a set of core
technical specifications for the participants of the AA ecosystem. Reserve Bank Information Technology
Private Limited (ReBIT), has framed specifications for all and published the same on its website. All
regulated entities of the Bank, acting either as NBFC-AA or Financial Information Providers (FIP) or
Financial Information Users (FIU) are expected to adopt the technical specifications published by ReBIT.
It shall be the responsibility of the NBFC-AA to ensure that its IT systems have all features necessary to
carry out its functions strictly in conformity with the NBFC. WITHDRAWAL OF EXEMPTIONS HOUSING
FINANCE INSTITUTIONS Housing Finance Institutions as defined under Clause (d) of Section 2 of the
National Housing Bank Act, 1987 are currently exempt from the provisions of Chapter IIIB of Reserve Bank
of India Act, 1934. RBI has withdrawn these exemptions and make the provisions of Chapter IIIB except
Section 45-IA of Reserve Bank of India Act, 1934, applicable to them.
RBI allows WLATM operators to source cash, generate income from ads: In a bid to enhance the viability
of white-label ATMs (WLATMs), the RBI has allowed them to buy wholesale cash from RBI and currency
chests, source cash from any scheduled bank, and display advertisements pertaining even to non-financial
products/services within the WLATM premises. Further, banks can issue co-branded ATM cards with the
authorized WLATMs, and, may extend the benefit of ‘on-us’ transactions where the customer/cardholder
and ATM are of the same bank to their WLATMs. The permission given to WLATM operators aka WLAOs in
December 2016 to source cash from retail outlets, has been withdrawn. WLAOs can buy wholesale cash,
above a threshold of one lakh pieces (and in multiples thereof) of any denomination, directly from its issue
offices and currency chests, against full payments. They can offer bill payment and interoperable cash
deposit services, subject to technical feasibility and certification by the National Payments Corporation of
India (NPCI). They can display advertisements pertaining to non-financial products/services anywhere within
the WLATM premises, including the WLATM screen, except the main signboard.
PAYMENT AND SETTLEMENT SYSTEM IN INDIA : VISION 2019-2021
The Reserve Bank of India has placed on its website the “Payment and Settlement Systems in India: Vision 2019 –
2021”. The Payment Systems Vision 2021 with its core theme of ‘Empowering Exceptional (E) payment
Experience’ aims at empowering every Indian with access to a bouquet of e-payment options that is safe, secure,
convenient, quick and affordable. It envisages to achieve a ‘highly digital’ and ‘cash-lite’ society through the
goal posts of Competition, Cost effectiveness, Convenience and Confidence (4Cs).
OBJECTIVES: Enhance Customer experience, including robust grievance redressal; Empower payment
System Operators and Service Providers; Enable the payments Eco-system & Infrastructure; Put in place
Forward-looking Regulations; and Undertake Risk-focused Supervision. The ‘no- compromise’ approach
towards safety and security of payment systems remains a hallmark of the Vision.
TARGETS UNDER VISION 2019-2021: Increase digital payment transaction of GDP by 15%. Increase payment
system operators fourfold increase in digital transactions.Increase debit card transactions by 35% & increase total
card acceptance infrastructure to six times. Reduce currency in circulation with no specific target. Reduce the
volume of cheque-based payments to less than 2%. Reduce pricing of electronic payment services by at
least 100 basis points. Improve the security of digital payment systems. Facilitate mobile-based payment
transactions.

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8. GENERAL BANKING
Revision of Interest Rates on Small Savings Schemes w.e.f. 01.10.2019 to 31.12.2019 and also same
wef 01.01.2020 to 31.03.2020
Scheme Revised Rate of Interest Compounding frequency
Senior Citizen Savings Scheme (SCSS) 8.6 % p.a. Quarterly and paid
Public Provident Fund Scheme (PPF) 7.9 % p.a. Annually
KisanVikasPatra (KVP) 7.6 % p.a. Annually
(will mature in 113 months)
SukanyaSamriddhi Account Scheme 8.4 % p.a. Annually

Rationalisation of Agency Commission Payable to Banks on Government Transactions with effect from
July 01, 2019 : Reserve Bank of India, has informed that the Agency Commission rates on eligible
Government transactions has been revised as under, and has to be carried out with effect from July 01,
2019:
Sl Type of Transaction Unit Existing Rates Revised Rates
No
1 Receipts - Physical Per transaction Rs 50/- Rs 40/-
2 Receipts – e-mode Per transaction Rs 12/- Rs 9/-
3 Pension Payments Per transaction Rs 65/- Rs 75/-
4 Payments other than Pension Per Rs 100 turnover 5.5 Paise 6.5 Paise
Claim: A review of claim process was done. Based on review and also taking into consideration, the
references received from agency banks in this regard, RBI decided to replace the current process of
centralised claims submission with a system whereby applicable GST (18% at present) shall be paid along
with agency commission by respective ROs of RBI / CAS, Nagpur. For eligible government transactions
done with effect from July 01, 2019, agency banks shall submit the agency commission claims, including
applicable GST amount, as per revised agency commission rates indicated above, to RBI at respective ROs
/ CAS, Nagpur as per the extant instructions issued by RBI in this regard. TDS on GST shall be deducted as
applicable by RBI at the time of making agency commission payment.
Remittance of government receipts (physical receipts) to Government account Office of Controller
General of Accounts, Ministry of Finance has prescribed revised timelines (on 19.09.19) for credit of
physical government receipts into government accounts at RBI, in supersession of earlier instructions on
this matter. As per these time lines, the period is T + 1 day (including put through). For branches in
North Eastern States the period is T + 2 days (including put through). There is no change e-receipts time
line which continues to be T + 1 working day as per Govt. circular dated 9.3.16. The instructions become
effective from October 1, 2019.
Recovery of Interest on delayed remittance of Government Receipts into Government Account As per
RBI circular dated 13.02.13, in order to bring uniformity in the procedure of reporting both central and
State government transactions to Reserve Bank, it was advised that the petty claims of delayed period of
penal interest involving amount of Rs.500/- or below will be ignored and excluded from the purview of
penal interest. To bring further uniformity in the procedure for reporting both central and state
government transactions to RBI, it decided (26.09.19) with the approval of Comptroller and Auditor
General of India that instructions given in para 7.4 of CGA’s OM S-11012/1(31)/AC(22)/2015/ RBD/332-
424 dated March 9, 2016, will be made applicable to State government transactions also i.e ignoring
petty claims of penal interest involving an amount of Rs.500/or below and excluding them from the
purview of penal interest, and applying the limit of penal interest of Rs.500/- on per transaction basis.
SOVEREIGN GOLD BONDS: 2019-20 : Gove rnm e nt of India , in consult a t ion wit h t he Re se rve Ba nk of
India, has decided to issue Sovereign Gold Bonds (SGB). The SGB will be issued every month in tranches
from June 2019 to Sept. 2019 as per the calendar specified below: S.No. Tranche Date of Subscription
Date of Issuance 1 2019-20 Series I June 3-7, 2019 June 11, 2019 2 2019-20 Series II July 8–12, 2019 July
16, 2019 3 2019-20 Series III Aug. 5-9, 2019 Aug.14, 2019 4 2019-20 Series IV Sept. 9-3, 2019 Sept.17,
2019 The Bonds will be sold t hrough SCBs (except Small Finance Banks and Payment Banks),Stock
Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges
viz., NSE and BSE. The fe a t ure s of t he Bond a re : a ) Issua nce : To be issue d by Re se rve Ba nk India on
behalf of the Government of India. b) Eligibility: The Bonds will be restricted for sale to resident
individuals, HUFs, Trusts, Universities and Charitable Institutions. c) Denomination: The Bonds will be
denominated in multiples of gram(s) of gold with a basic unit of 1 gram. d) Tenor: The tenor of the Bond
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 27 | P a g e
will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment
dates. e) Minimum Size: Minimum permissible investment will be 1 gram of gold. f) Maximum Limit: The
maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar
entities per fiscal (April-March). A self-declaration to this effect will be obtained. The annual ceiling will
include bonds subscribed under different tranches during initial issuance by Govt. and those purchased
from the Secondary Market. g) Joint Holder: In case of joint holding, the investment limit of 4 KG will be
applied to the first applicant only. h) Issue Price: Price of Bond will be fixed in Indian Rupees on the basis
of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers
Association Limited for the last 3 working days of the week preceding the subscription period. The issue
price of the Gold Bonds will be Rs.50 per gram less for those who subscribe online and pay through digital
mode. i) Payment Option: Payment for the Bonds will be through cash payment (upto a maximum of Rs.
20,000) or demand draft or cheque or electronic banking. j)Issuance form: The investors will be issued a
Holding Certificate for the same. The Bonds are eligible for conversion into demat form. k) Redemption
Price: The redemption price will be in Indian Rupees based on previous 3 working days simple average of
closing price of gold of 999 purity published by IBJA. l) Sales Channel: Bonds will be sold through
Commercial banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and
recognised stock exchanges viz., NSE and BSE, either directly or through agents. m) Interest Rate: The
investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the
nominal value. n) Collateral: Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is
to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time. o) KYC
Documentation: Know-your-customer (KYC) norms will be the same as that for purchase of physical gold.
KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required. Tax treatment:
The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961. The capital
gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will
be provided to long term capital gains arising to any person on transfer of bond. q) Tradability: Bonds
will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI. r)
SLR Eligibility: Bonds acquired by the banks through the process of invoking lien/hypothecation/pledge
alone, shall be counted towards Statutory Liquidity Ratio. s) Commission: Commission for distribution of
the bond shall be paid at the rate of 1% of the total subscription received by the receiving offices and
receiving offices shall share at least 50% of the commission so received with the agents or sub agents for
the business procured through them.
Disclosure on Exposure to Infrastructure Leasing & Financial Services Limited (ILFS) and its group
entities
RBI has advised banks to refer to the National Company Law Appellate Tribunal’s (NCLAT) order dated February 25,
2019 in respect of I.A No. 620 of 2019 in Company Appeal (AT) No. 346 of 2018, in terms of which “no financial
institution will declare the accounts of ‘Infrastructure Leasing & Financial Services Limited’ or its entities as ‘NPA’
without prior permission of this Appellate Tribunal”. In this context, banks and AIFIs have been advised by RBI on
24.04.19, to
disclose in their notes to accounts, the information in the prescribed proforma.
Wholesale Price Index (WPI) WPI measures the average change of the price of a fixed set of goods at
first point of bulk sale in a commercial transaction in the domestic market over a given period of time.
The monthly WPI presented in the table are compiled and published by the Office of the Economic
Adviser, under the Ministry of Commerce and Industry, Govt. of India. The current WPI series (Base 2011-
12 = 100) has 697 items in the commodity basket, for which 8,331 price quotations are obtained. All
items having large transactions in the economy are considered for compilation of the index to the extent
feasible. Thus the series has a representative basket of commodities as well as their varieties/grades and
markets. These items are aggregated at sub-group/group/ major group/all commodities index. The first
release of monthly WPI is generally after two weeks at the month-end, which is ‘provisional’ in nature
because some price quotations are received belatedly. The ‘final’ index is released a month after the
provisional index, as by that time almost all the required price quotations become available. The index
numbers are compiled on the basis of Laspeyres’ formula as weighted average of price relatives.
Incentive for improving service to non-chest branches On 23.05.19, RBI decided to allow the large
modern Currency Chests to increase the service charges to be levied on cash deposited by non-chest bank
branches from the existing rate of Rs.5/- per packet of 100 pieces to a higher rate subject to a maximum
of Rs.8/- per packet. For this purpose, only a Currency Chest fulfilling the Minimum Standards for a
Currency Chest as detailed (details given hereunder) shall be eligible to be classified as a large modern
Currency Chest. Banks may approach the Issue Office of Reserve Bank under whose jurisdiction the
Currency Chest is located for such classification. The increased rates can be charged only after such
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classification by the Issue Office concerned. The Non-Chest bank branches linked with such large modern
Currency Chests may be advised of the applicability of the increased rates at least 15 days in advance.
Minimum Standards for a Currency Chest (08.04.19) RBI decided to have following minimum standards
for setting up new CCs: i. Area of the strong room/ vault of at least 1500 sq. ft. For those situated in
hilly / inaccessible places (as defined by central / state government/ any appropriate authority), the
strong room/ vault area of at least 600 sq. ft. ii. Processing capacity of 6,60,000 pieces of banknotes per
day. For those situated in the hilly/ inaccessible places, capacity of 2,10,000 pieces of banknotes per
day. iii. Amenability to adoption of automation and adaptability to implement IT solutions. iv. CBL of
Rs.10 billion, subject to ground realities and reasonable restrictions, at the discretion of the Reserve
Bank.
SETTING UP NEW CURRENCY CHESTS  The Re se rve Ba nk of India ha s issue d guide line s for ba nks
to set up new currency chests. Currency chest is place where currency and coins are stored. It can
be strong room or a vault. When cash is taken out of vault, it becomes cash of bank and it can be
used for the payments. RBI on its behalf authorises few selected bank branches to stock rupee notes
and coins. It acts as distributives of RBI cash and enables RBI to take back soiled notes and mutilated
notes from the public. As pe r RBI’ s a nnua l re port of 2017-18, currency management infrastructure
consists of network of 19 issue offices of RBI, 3,975 currency chest and 3,654 small coin depots of
commercial, regional rural and co-operative banks spread across the country. Guidelines Issued by RBI:
Are a of t he st rong room / va ult of curre ncy che st s should be a t le a st 1, 500 sq ft . In ca se t he y a re sit ua t e d
in hilly/ inaccessible places, then strong room/ vault area should be least 600 sq ft. Processing capacity
of new chests should of 6.6 lakh pieces of banknotes per day. If they are situated in hilly/ inaccessible
places, it should then have processing capacity of 2.1 lakh pieces of banknotes per day. Curre ncy
chests should have Chest Balance Limit (CBL) of Rs.1,000 crore. But this CBL will be subject to ground
realities and reasonable restrictions, at discretion of RBI.
Deferral of Implementation of Indian Accounting Standards (Ind AS)
On 05.04.18, the implementation of Ind AS was deferred by one year pending necessary legislative
amendments to the Banking Regulation Act, 1949 and level of preparedness of many banks. RBI informed
on 22.03.19 that the legislative amendments recommended by the Reserve Bank are under consideration
of the Government of India. Accordingly, RBI has decided to defer the implementation of Ind AS till
further notice.
LATEST GUIDELINES ABOUT REPORTING OF CURRENCY CHEST TRANSACTIONS
1) REPORT OF CURRENCY CHEST TRANSACTIONS The minimum amount of deposit into / withdrawal
from currency chest will be Rs.1,00,000 and thereafter, in multiples of Rs.50,000.
a) Time Limit for Reporting The currency chests / Link Offices should invariably report all transactions
through CyM – CC portal on the same day by 7 pm. The Sub-Treasury Offices (STOs) should report all
transactions directly to the Issue Office of the Reserve Bank by 7 pm on the same day. b) Relaxation in
respect of strike period in banks Relaxation in the reporting period on account of strike situation will be
considered on case-to-case basis.
2) LEVY OF PENAL INTEREST: a) Delay in Reporting: In the event of delay in reporting currency chest
transactions, penal interest at the rate indicated in paragraph 3 of this circular will be levied on the
amount due from the chest holding bank for the period of delay. Penal interest will be calculated on T+0
basis i.e. penal interest will be levied in respect of transactions not reported by currency chests / Link
Offices to the Issue Office on the same business day within the time limit prescribed above. Penal
interest will also be charged for delay in reporting by STOs directly linked to Issue Department of the
circle.
b) Wrong Reporting: Penal interest will be levied in respect of cases of wrong reporting in the same
manner till the date of receipt of corrected advice by RBI. As debits/credits to banks' current accounts
are raised on the basis of the transactions reported by the currency chests / Link Offices, penal interest
will invariably be levied in all cases of wrong reporting by the currency chests. It is expected that
currency chests / Link Offices would ensure the correctness of figures reported on the CyM - CC portal.
Particular care should be taken to ensure that remittances of fresh notes/notes to the currency chests
are not reported as 'deposit' transactions on the portal.
c) Penal interest for inclusion of ineligible amounts in the currency chest balances
(i) Penal interest will be levied in all cases where the bank has enjoyed 'ineligible' credit in its current
account with RBI on account of wrong reporting/delayed reporting/ non-reporting of transactions. Penal
measures will also be taken in cases of shortages in chest balances/remittances, shortages due to
pilferage/ frauds, counterfeit banknotes detected in chest balances/remittances as per the prevailing
“Scheme of Penalties”.
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(ii) Further, only cash held in the custody of joint custodians and 'freely available' to them is eligible for
inclusion in the chest balances. Thus, cash kept for safe custody in sealed covers for whatever
reasons/cash in trunks/bins under the lock and key of any official/s other than the Joint Custodians or
bearing a third lock put by any official in addition to the two locks of the Joint Custodians is not eligible
for being included in the chest balances. If such amounts are included in chest balances, these will be
treated as instances of wrong reporting and will attract penal interest at the rate specified.
(iii) In all the above cases, penal interest will be levied from the date of inclusion of 'ineligible' amounts
in chest balances till the exclusion of such amounts from chest balances. Penal measures for shortages in
chest balances / remittances, shortages due to pilferage / frauds, counterfeit banknotes detected in
chest balances/remittances will be taken on the basis of prevailing “Scheme of Penalties”.
3) LEVY OF PENALTY : a) Reporting of Soiled note remittances to RBI: Soiled note remittances to RBI
should not be shown as withdrawal by chests/link offices. In case such remittances to RBI are wrongly
reported as 'withdrawals', a penalty of Rs.50,000 will be levied irrespective of the value of remittance
and period of such wrong reporting.
b) Reporting of diversions in CyM – CC portal: All currency chest diversions (both between chests of the
same bank and between chests of different banks) have to be reported through ‘Diversion Module’ of
CyM-CC Portal. The CC sending the diversion should initiate the diversion entry. The receiving CC should
acknowledge the same. Diversions must not be reported as Deposit / Withdrawal. A penalty of Rs.50,000
will be levied for such wrong reporting.
c) Delayed reporting where currency chests had “Net Deposit”: Penal interest at the prevailing rate for
delayed reporting of the instances where the currency chest had reported “net deposit” may not be
charged. However, in order to ensure proper discipline in reporting currency chest transactions, a flat
penalty of Rs.50,000 may be levied on the currency chests for delayed reporting irrespective of the value
of net deposit.
4) RATE OF PENAL INTEREST
Penal interest shall be levied at the rate of 2% over the prevailing Bank Rate for the period of delayed
reporting / wrong reporting/non-reporting / inclusion of ineligible amounts in chest balances. Levy of
penal interest in respect of currency chests at treasuries: The above instructions shall be applicable to
currency chests at treasury/sub-treasury offices also.
5) REPRESENTATIONS
a) Delayed Reporting: As the sole criterion for levy of penal interest for delayed reporting is the number
of days of delay, there should ordinarily be no occasion for banks to request for reconsideration of the
Reserve Bank's decision in individual cases. However, representations, if any, on account of genuine
difficulties faced by chests especially in hilly/remote areas and those affected by natural calamities,
etc., may be made to the Issue Office concerned through the Head / Controlling office of the bank
concerned within a month from the date of debit of the bank concerned.
b) Wrong Reporting: In the case of wrong reporting representations for waiver will not be considered. c)
As the intention behind the levy of penal interest is to inculcate discipline among banks so as to ensure
prompt / correct reporting, pleas by banks for waiver of penal interest on grounds that
delayed/wrong/non-reporting did not result in utilization of the Reserve Bank's funds or shortfall in the
maintenance of CRR/SLR or that they were the result of clerical mistakes, unintentional or arithmetical
errors, first time error, inexperience of staff etc., will not be considered as valid grounds for waiver of
penal interest. Further, we will take a serious view of all such lapses.
REVIEW OF THE PERFORMANCE OF BANKS  The Fina nce Minist e r re vie we d t he pe rforma nce of ba nks
recently in a meeting with the top management of Public Sector Banks, HDFC Bank, ICICI Bank, Axis
Bank, Kotak Mahindra Bank and Citi Bank.  The me e t ing is t he first of a series of meetings convened to
discuss current economic issues with key stakeholders, including some of the industry sectors whose
growth has been affected in recent months. This meeting was on the banking sector to be followed by
meetings with the MSME sector, the automobile sector, industry associations, financial market
stakeholders, and real estate and home-buyers.  The Gove rnm e nt will fa ct or in t he t a ke a wa ys from
these consultations for appropriate policy responses to maintain a high growth trajectory and to address
sector-specific issues. The meeting on the banking sector focused on the following aspects:
A) OVERALL CREDIT: Overall credit growth from the banking system continues to be at 12%, which is
marginally lower than the growth of 13.3% at the end of March 2019. However, with turnaround in the
NPA cycle, high provision cover of over 75%, and record recovery, bank balance-sheets are healthier than
before. Banks are now, therefore, in position to step up lending.
B) CONTACTLESS DIGITAL LENDING:  Ba nks commit t e d t o st e p up a fforda ble a nd ha ssle-free credit with
a special focus on the MSME and consumer finance sectors.  Ba nks ha ve de cide d t o incre a se t he in-
principle approval limit for contactless digital lending to MSMEs on the PSB59minutes.com portal to Rs. 5
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 30 | P a g e
crore.  Furt he r, ba nks would be e xpa nding t he cont a ct le ss digit a l le nding fa cilit y t hrough t he port a l t o
retail lending products for personal loans, vehicle loans and home loans.
C) CO-ORIGINATION OF LOANS: Banks committed to leverage co-origination of loans jointly by banks and
NBFCs under RBI’s co-origination policy. This will combine the advantages of lower cost funds and large
financing capacity of banks with the doorstep reach of the NBFC sector, to the benefit of both. Banks will
also enhance consumer ease through doorstep delivery of lending and repayment services.
D) NBFC AND HFC SECTOR:  Ba nk cre dit t o t he NBFC a nd HFC se ct or ha s rise n by ne a rly Rs. 90, 000 crore
since Sept. 2018, helping address the sector’s liquidity needs. In addition, pool buy-outs of over Rs.
40,000 crore by Banks have helped the NBFC and HFC sector reduce their asset liability mismatch. 
Banks committed to continue supporting the sector by making prudent use of partial credit guarantee
from the Govt. for purchase of pooled assets of NBFCs and HFCs of up to Rs. 1 lakh crore.  Na t iona l
Housing Bank has also brought out a new scheme to enable HFCs to take refinance from NHB for their
pool of existing developer loans as well as individual housing loans and HFCs can then use the liquidity so
provided exclusively for individual loans for affordable housing.
E) AUTOMOBILE SECTOR: The automobile sector has witnessed falling sales. Sales in this sector have been
driven by vehicle loans, in which NBFCs had a major share. In view of the decline in NBFC credit for
vehicle finance, banks have committed to step up credit support for vehicle purchases.
F) MSME SECTOR:  Ba nks would re double e ffort s t o e xt e nd che a pe r, ha ssle-free and cash-flow based
credit to MSMEs by leveraging GST, digital payments and alternate data. Banks would also expedite
restructuring of viable MSME units facing stress, under the special MSME restructuring dispensation
available till March 2020.  The re com m e nda t ions of t he U. K. Sinha commit t e e would be taken forward.
The committee had highlighted the need to meet working capital requirements of India’s growing MSME
service. Banks agreed to come out with specific working capital products for service sector MSME units.
G) INTEREST RATE TRANSMISSION: Since December 2018, monetary policy has been eased substantially
with policy rates being cut and the policy outlook being changed to accommodative. Banks agreed to
take steps as per RBI guidelines to review their lending rates.
H) DIGITALISATION:  As aresult of Government’s thrust on digitalization, digital transactions have grown
to 769% of GDP by March 2019, up from 726% a year ago. The recent amendments mandating that
business establishments with over Rs. 50 crore turnover accept digital payments and waiver of charges on
NEFT and RTGS will give a fillip to further digitalisation.  Ba nks com m it t e d t o re vie w cha rge s on digit a l
payments with a view to making them cheaper for customers as compared to cash payments. They also
committed to expand services available through mobile and Internet banking and offer services on these
digital platforms in regional languages as well.  Ba nks a lso a rt icula t e d som e issue s t he y ha ve be e n fa cing
in service tax which will be examined by the Govt.
RBI GOVERNOR MEETS CEOs OF PSBs  The Gove rnor, Re se rve Ba nk of India he ld a me e t ing wit h t he
CEOs of the public sector banks and the Chief Executive of Indian Banks Association (IBA) on July 19,
2019.  In his ope ning re m a rks, t he Gove rnor a cknowle dge d disce rnible improvements in the banking
sector while underscoring that several challenges still remain to be addressed, particularly with regard to
the stressed asset resolution and credit flows to needy sectors. During the meeting the following issues
were discussed: Less than desired level of transmission of monetary policy rates;  Cre dit a nd de posit
growth on the back of a slowing economy; flow of credit to needy sectors while following prudent
lending, robust risk assessment and monitoring standards;  Im proving recovery efforts;  Giving impe t us
to resolution of stressed assets facilitated by revised framework for resolution announced by the RBI. 
Strengthening internal control mechanism for improved fraud risk management;  Re ce nt init ia t ive s t o
address issues relating to NBFCs and the role banks can play in mitigating lingering concerns;  De e pe ning
digital payments.  The Gove rnor a lso unde rline d t he im port a nce of e xpa nding a nd de e pe ning digit a l
payments ecosystem in line with the recommendations of the Report of the Committee on Deepening of
Digital Payments headed by Sh. Nandan Nilekani and RBI’s Payment System Vision Document 2021.  In
this context, on the suggestion of the Governor, Banks agreed to identify one district in each state to
make it 100% digitally enabled within a time frame of one year in close coordination and collaboration
with all stakeholders, including SLBCs, State Governments, Regional offices of RBI, etc.  To t he e xt e nt
feasible, such districts may be converged with the 'Transformation of Aspirational Districts' programme of
the Government of India.

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9. CURRENT BANKING, FINANCE & ECONOMY
Economic Survey 2018-19: Important Highlights
Guided by the dictum of "blue-sky thinking", the Economic Survey underscored the ambitious agenda of
applying principles of behavioural economics to achieve 8 percent of sustained GDP growth to make India
a $5trillion economy by 2024-25. The government has estimated gross domestic product growth of 7% for
the fiscal year 2019-2020. The theme of the Economic Survey 2019 is about enabling a ―shifting of
gears".
Survey sees Financial Year 2020 GDP growth at 7%, higher growth on stables macros. India needs to grow
at 8% per year to be $5 trillion economy by Financial Year 2025. A faster legal process should be the top
priority. Savings and growth are positively co-related. Savings must increase more than investment.
Survey argues that nudging behaviour change is the simplest way to solve many social issues. Top
policymakers must ensure actions are predictable. Policymaking needs: 1. Clear Vision 2. Strategic
blueprint 3. Tactical tools for constant recalibration. The success of MGNREGS shows govt. schemes can
make a difference on the ground with skillful use of technology. A minimum wage policy for the bottom
rung of wage earners to drive up demand and strengthening the middle class. Indian MSMEs need to be
freed from shackles that convert them into dwarfs. MSMEs need to be seen as a source of innovation,
growth and job creation. Policies should be reoriented forMSMEs growth, create greater profits for their
owners and contribute to job creation and productivity in the economy. NBFC stress reason for Financial
Year 2019 slowdown. Decline in NPAs should push up CAPEX cycle. The general fiscal deficit is seen at
5.8% in Financial Year 2019 Vs. 6.4% in Financial Year 2018. Investment rate seen higher in Financial
Year 2020 on improved demand. Oil prices are seen declining in Financial Year 2020. Accommodative
MPC policy to help cut real lending rates.
Union Budget 2019-20: In a Nutshell India‘s first full-time woman Finance Minister Nirmala Sitharaman
presented the maiden budget.
Expenditure: The government proposes to spend Rs 27,86,349 crore in 2019. Receipts: The receipts
(other than net borrowings) are expected to increase by 14.2% to Rs 20,82,589 crore.
GDP growth: The government has assumed a nominal GDP growth rate of 12% (i.e., real growth plus
inflation) in 2019-20. Deficits: Revenue deficit is targeted at 2.3% of GDP. Fiscal deficit is targeted at
3.3% of GDP. Ministry allocations: Among the top 13 ministries with the highest allocations, the highest
percentage increase is observed in the Ministry of Agriculture and Farmers‘ Welfare (82.9%), followed by
Ministry of Petroleum and Natural Gas (32.1%) and Ministry of Railways (23.4%).
Surcharge on income tax: Currently, a surcharge of 15% is levied on the income of individuals earning
over one crore rupees, and 10% on income of individuals earning between Rs 50 lakh and one crore
rupees. In the Union Budget 2019-20, the surcharge on income tax for individuals earning between two
crore rupees and five crore rupees has been increased to 25% and for persons earning over five crore
rupees has been increased to 37%.
Corporation tax: Currently, companies with annual turnover of less than Rs 250 crore pay corporate
income tax at the rate of 25%. This threshold has been increased to Rs 400 crore.
Tax on cash withdrawals: A TDS of 2% will be levied by financial companies and post offices on individuals
for cash withdrawals exceeding one crore rupees in a year from a bank account.
Tax exemption for affordable housing: An additional tax deduction of up to Rs 1,50,000 will be provided
on interest paid on loans for self-occupied house owners. The conditions for availing this deduction are:
(i) the loan must be sanctioned in FY 2019-20, (ii) the stamp duty on the house should not exceed Rs 45
lakh rupees, and (iii) the individual should not own another residential house property as of the date of
the home loan. Tax exemptions for electric vehicles: A tax deduction of up to Rs 1,50,000 will be
provided on interest paid on loans to purchase an electric vehicle. This deduction will be applicable for
loans sanctioned between FY 2019-20 and FY 2022-23.
Banking and Finance: The government plans to partially guarantee (for first 10% of loss) Public Sector
Banks for funds provided in a pooled manner to NBFCs.
Government borrowings: Currently, the gross borrowing programme of the government is funded entirely
through domestic borrowings. The government plans to raise a part of its borrowings abroad in foreign
currency.
Industry: The minimum public shareholding in listed companies will be increased from 25% to 35%. A
new electronic fund raising platform will be created for listing social enterprises and voluntary
organisations. The present policy of 51% stake of government in non-financial PSUs will be modified to
include stake of government controlled institutions.
Investments: 100% Foreign Direct Investment (FDI) will be permitted for insurance intermediaries. Local
sourcing norms will be eased for FDI in the single brand retail sector. Further, relaxing of the FDI norms
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 32 | P a g e
in aviation, media and insurance sectors will be examined. Statutory limit for Foreign Portfolio
Investment will be increased from the current 24% to sectorial limits. Foreign shareholding limits in PSUs
will be increased to the maximum permissible sectorial limit.
Agriculture and allied activities: Pradhan Mantri Matsya Sampada Yojana has been proposed to address
infrastructure gaps in the fisheries sector. 10,000 new Farmer Producer Organisations will be setup over
the next five years. The central government will work towards adoption of zerobudget farming.
Rural Development: Under the Pradhan Mantri Gram Sadak Yojana, 1.25 lakh km of road will be
upgraded at an estimated cost of Rs 80,250 crore in the next five years. 100 new clusters will be setup
under the Scheme of Fund for Upgradation and Regeneration of Traditional Industries (SFURTI). All rural
households will be provided with piped water supply by 2024 under the Jal Jeevan Mission. Swachh
Bharat Mission will be expanded to undertake solid waste management in every village.
Social Justice: An overdraft of Rs 5,000 will be provided to women self-help group (SHG) members who
hold Jan-Dhan accounts. Further, a loan up to one lakh rupees will be provided under the MUDRA scheme
to one woman in every SHG.
Social Security: A new pension benefit scheme, namely Pradhan Mantri Karam Yogi Maandhan Scheme,
has been announced for traders and small shopkeepers with annual turnover of less than Rs 1.5 crore.
Education: The new National Education Policy will be introduced. The National Research Foundation will
be setup to promote funding and coordinate research in the country. A Study in India programme will be
launched to encourage foreign students in higher education.
Budget Allocation at a Glance: Rs. 60,000 crores MGNREGA (Under PM Gram Sadak Yojana) , Rs. 75,000
crores PM Kisaan Samman,Rs. 25,853 crores Pradhan Mantri Awas Yojana (rural + urban) Rs. 19,000
crores Pradhan Mantri Gram Sadak Yojana Rs. 14,000 crores Pradhan Mantri Fasal Bima Yojana Rs.
13,750 crores AMRUT and Smart Cities Mission ,Green Revolution Rs. 11,000 crores Mid-Day Meal
Programme Rs. 10,001 crores, National Rural Drinking Water Mission Rs. 9,774 crores ,Pradhan Mantri
Krishi Sinchai Yojana Rs. 70,000 crores Public Sector Banks.
Schemes Launched By Union and State Governments
1. The committee have to submit its 1st report within 15 days to the GST Council Secretariat.
Insurance Regulatory & Development Authority of India (IRDAI) has set up a 13-member committee
under IRDAI Executive Director Suresh Mathur .
2. ETMONEY India‘s largest app for financial services has integrated with Unified Payment Interface
as a payment method.
3. The Nandan Nilekani committee has suggested a host of measures, including elimination of
charges, round-the-clock RTGS and NEFT facility.
4. The Reserve Bank of India constituted a sixmember committee to review the ATM interchange fee
structure with a ―view to increase the ATM deployment in the unbanked areas‖.
5. NSE Clearing Ltd. will head the panel set up by SEBI to review margins on derivatives. A Standing
Group of Secretaries (GoS) has been constituted on e-Commerce by Ministry of Commerce and
Industry.
LATEST COMMITTEES IN NEWS
S.NO. Purpose for which Committee is formed Headed by
1 Panel on Economic Capital Framework (ECF), formed by RBI has Bimal Jalan
finalised its report on surplus RBI reserves
2 Inter-Ministerial Committee‖ on legality of cryptocurrencies and Secretary Subhash
blockchain Chandra Garg
3 To review margins on derivatives the panel will submit its NSE Clearing Ltd
recommendations to the Secondary Market Advisory Committee
4 Beekeeping Development Committee Bibek Debroy
5 Committee give recommendations for MSME sector U.K. Sinha
6 RBI‘s to review the regulatory and supervisory framework for Core Tapan Ray
Investment Companies
7 IRDAI has set up committee to review the regulatory framework on IRDAI Executive Director
microinsurance & recommend measures to increase the demand for Suresh Mathur
such products
8 To strengthen digital payments as well as to boost financial inclusion Nandan Nilekani
through Financial Technology
9 Determining the Methodology for Fixation of the National Minimum Anoop Satpathy
Wage‖
10 CBDT formed a 4-member committee to look into the matter of Sanjeev Sharma
taxation related pain points and submit its final report and
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 33 | P a g e
 recommendations by mid-March
11 To review the ATM interchange fee structure with a ―view to V G Kannan
increase the ATM deployment in the unbanked areas
12 Chief Ministers for transforming Indian agriculture and raising Maharshtra CM Devendra
farmers‘ income Fadnavis

IMF cuts World and India growth rates The World Bank-International Monetary Fund (IMF) annual
meetings kicked off on a somber note, with the IMF downgrading global growth in 2019 to 3%, the slowest
since the global financial crisis. India‘s growth projections have also been downgraded to 6.1% and 7.0%
in 2019 and 2020 respectively. The IMF projected the U.S. would grow at 2.4% and 2.1% in 2019 and 2020
respectively. For China, growth was projected to grow at 6.1% and 5.8% in 2019 and 2020.
NITI Aayog launches India Innovation Index 2019 - NITI Aayog with Institute for Competitiveness as the
knowledge partner released the India Innovation Index (III) 2019. Karnataka is the most innovative major
state in India. Tamil Nadu, Maharashtra, Telangana, Haryana, Kerala, Uttar Pradesh, West Bengal,
Gujarat, and Andhra Pradesh form the remaining top ten major states respectively. Sikkim and Delhi
take the top spots among the northeastern & hill states, and union territories/citystates/small states
respectively. Delhi, Karnataka, Maharashtra, Tamil Nadu, Telangana, and Uttar Pradesh are the most
efficient states in translating inputs into output.
WEF‘s Global Competitiveness Index World Economic Forum has released the Global Competitiveness
Index report. In total, there are 103 indicators distributed across the 12 pillars on which the performance
of the countries was evaluated. As per the WEF‘s released report, India has moved down 10 places to
rank 68th on an annual global competitiveness index which was topped by Singapore. Here is the
detailed ranking of India in individual pillars across which the performance of the countries was
evaluated:
World Bank‘s Ease of Doing Business Ranking - World Bank has released Ease of Doing business
Rankings which includes 190 countries. As per the rankings, India has jumped 14 places and has been
ranked at 63rd among 190 countries. New Zealand and Somalia retained their 1st and 190th spot
respectively. From 2020, the World Bank has expanded its ease of doing business survey to 2 more
cities: Bengaluru and Kolkata in addition to Delhi and Mumbai that are currently surveyed. The World
Bank has decided to have four cities from every country with a population above 100 million.
Union Cabinet approves extension of PM-KISAN scheme - Govt has approved the extension of Pradhan
Mantri Kisan Samman Nidhi (PM-KISAN) to all the farmers in the country. Earlier the benefit of the
scheme was applicable to farmers having two hectares of land.  Ne a rly 14 crore s 50 la kh fa rme rs will be
now covered under the revised scheme.  Tot a l burde n on t he e xche que r will be ove r 87, 000 crore
rupees for the year 2019-20.  Ove r t hre e crore fa rm e rs ha ve be e n be ne fit e d so fa r. Six t housa nd
rupees per year is being given in three installments to the farmers, under the scheme. Centre also
approved the Pradhan Mantri Kisan Pension Yojana under which small and marginal farmers will get a
minimum fixed pension of 3,000 rupees per month on attaining the age of 60 years. Pradhan Mantri Kisan
Pension Yojana scheme aims to initially cover 5 crore farmers in the first 3 years.  PM -KISAN scheme was
launched in Uttar Pradesh‘s Gorakhpur on 24th February 2019 by transferring the first installment of
₹2,000 each to over one crore farmers.
Deposits in Jan Dhan Yojana accounts crosses Rs 1 lakh crore
Deposits in bank accounts opened under Jan Dhan scheme have crossed the Rs 1 lakh crore mark. As
per the latest finance ministry data, the total balance in over 36.06 crore Pradhan Mantri Jan Dhan
Yojana accounts was at Rs 1,00,495.94 crore as on 03rd July 2019. The PMJDY was launched on 28th
August 2014, with an aim to provide universal access to banking facilities to the people in the country.
RBI board finalizes UTKARSH 2022- RBI board has finalized a three year roadmap to improve regulation
and supervision, among other functions of the central bank. This medium term strategy named UTKARSH
2022, is in line with the global central banks‘ plan to strengthen the regulatory and supervisory
mechanism. Worldwide, all central banks strengthen the regulatory and supervisory mechanism,
everybody is formulating a long-term plan and a medium-term plan.
India slips to 7th largest economy in 2018 - According to the World Bank, India has been pushed to the
7th place in the global GDP rankings in 2018. In 2017, India had emerged as the 6th largest economy.
The US remains the top economy with a GDP of $20.5 trillion in 2018. China was the 2nd largest economy
with $13.6 trillion, while Japan took the 3rd place with $5 trillion. India‘s GDP was at $2.7 trillion in
2018, while UK and France were at $2.8 trillion. India still remains the fastest-growing major economy in
the world.

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 34 | P a g e
Key banking sector news
RBI introduced a new semi-closed prepaid payment instrument (PPI) which can be used for transaction
of goods and services up to a limit of Rs 10,000.
ICRA said that the asset quality for the banking sector continues to improve with declining slippages
and expected improvements in recoveries during FY20. Decline in NPAs will improve solvency profile of
Banks.
As per RBI report, in the coming years the financial health of PSBs should increasingly be assessed by
their ability to access capital markets instead of depending excessively on the government.
RBI has red-flagged banks’ reliance of retail loans over slowing economic activity and negative
consumer sentiment.
According to latest RBI report, cancellation of NBFC registrations skyrocketed by more than eight folds
in 2018-19, compared to the previous year. 169 and 224 NBFC registrations were cancelled in FY17 and
FY18 respectively, which suddenly surged to 1,851 cancellations in FY19.
Top banks that use collateralised borrowing and lending obligation (CBLO) instruments have reached
out to their tax advisers, seeking clarity on whether they could face problems under the goods and
services tax regime.
Banks reported a total fraud of ₹71,543 crore in FY19, a 74% increase as against ₹41,167 crore in
FY18. PSBs accounted for 55.4% of the number of cases and 90.2% of the amount involved.
Major banking sector developments
State Bank of India
SBI Chairman Rajnish Kumar said that banks cannot go beyond a threshold to bring down interest rates
on deposits as India lacks social security schemes and likewise cannot lend at lower rates to corporates as
the risk of default is too high.
SBI Chairman nudged the industry to enrich their borrowing capacity so as to boost investment in the
economy, asserting there is no dearth of funds and most of the banks will be in a better position by
March-end.
According to RBI report, SBI tops in highest no.of complaints comprising nearly half of the total
complaints received against 18 PSU banks. PNB and BOB followed SBI in terms of such complaints.
Punjab National Bank
PNB had issued and allotted Rs. 1,500 crore Tier - II Basel III compliant capital bonds at a coupon of
8.15% per annum on private placement basis.
According to the copy of complaint posted on CBI website, PNB alleges that Jagadish Khattar founder
of Carnation Auto India Pvt Ltd of Rs.110 cr has cheated bank in Jul’19.
IDBI Bank expected to come out of the PCA framework in the last quarter of the current fiscal with the
support of capital infusion and recovery from large IBC cases.
Department of Financial Service conveyed the sanction for release of the fresh capital infusion fund of
Rs 2,153 crore to Allahabad Bank.
According to media report Syndicate Bank has received credit rating revision from CRISIL as AA rating
for perpetual Tier I bond (Rs.777Cr) and lower Tier II Bonds under BASEL II (Rs.2225 cr).
ICICI Bank
India’s biggest food delivery app Swiggy Launches their Own Wallet powered by ICICI Bank.
YES Bank
Hinduja Group flagship firm Ashok Leyland said that it has inked a pact with Yes bank for vehicle
finance for a period of 2 years.
According to RBI media report, business of Payment Banks (PB) continues to hover around. Despite an
improvement in net interest income and non-interest income PBs aggregate losses increased to 21% to
Rs.626.8 Cr in FY19.
Banking Current Affairs-
Rajnish Kumar, Chairman of SBI has been elected as- Chairman of Indian Banks’ Association (IBA) • •
Kolkata-born Abhijit Banarjee, his wife Esther Duflo and Michael Kremer of Harward University have won
the Prize for their experimental approach to alleviating Global Poverty- Noble Economics Prize. Rating
Agency according to which, “Indian Banks are the Most Vulnerable in AsiaPacific” because they have
lower capital ratios and their capital will be wiped out under stress scenario- Moody’s. • Bank which has
launched Digital Fixed Deposit Product and can be opened in three minutes without opening a savings
account – AXIS Bank • Bank which got RBI approval for raising the Authorised Capital from Rs.800 Crore to
Rs.1100 Crore.-Yes Bank. • Bank which has opened its Melbourne Office becoming the First Indian Bank to
have a branch in the Australian State of Victoria- SBI. • Eminent Economist has been appointed as
Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 35 | P a g e
Executive Director for India on the Board of International Monetary Fund (IMF)- Surjit S Bhalla. • Banks
which have also been included as members by the Credit Guarantee Fund Trust by which they may avail
the guarantee cover for loans given to MSMEs- Scheduled Urban Co-operatives Banks. • Bank Fraud case
in which Sarang Wadhawan and Rakesh Wadhawan, Promoters of Housing Development Infrastructure
Limited, have been arrested by the policePMC Bank Fraud Case. • Growth Forecast which has been
sharply reduced from earlier 7.4% to 6.1% by RBI- India’s GDP Growth Forecast. India jumped two levels
to 7th Position from the 9th last year inBrand Finance Nation Ranking 2019. • RBI has given nod to Kerala
State Government to set up its own bank by merging district cooperative banks – Kerala Bank. •
• In past 10 years, DICGC has settled 427 claims of Co-operative Banks but they have settled the claim of
– Only One Commercial Bank. •Regulator which has banned the use of Direct Selling Agents (DSAs) to
source retail loans and carry out physical verification of documents of borrowers- RBI. • India moves up
14 ranks to 63rd Ranking in- Ease of Doing Business 2020 Survey. • Bureau which has recommended the
name of Challa Sreenivasulu as MD at SBI- Banks Board Bureau. • A Joint Venture between the BSE and
USbased Insurance Exchange EBIX has received In-principle Approval from IRDAI to act as- Direct
Insurance Broker. •Persons who will now be eligible to apply for the National Pension System at par with
NRIs- Overseas Citizens of India.The finance service company, Ujjivan Small Finance Bank (SFB) has
launched an instant digital savings account (SA) along with Fixed Deposit (FD) and Privilege Savings
Account to offer distinctive banking and digital services to its customers. The amalgamation of Vijaya
Bank and Dena Bank into the BoB has come into effect and merged entity would also receive Rs 5,042
crore fund infusion from the government. SBI Card announced the launch of ‗SBI Card Pay‘, a feature
which allows contactless payment using mobile phones at PoS terminals. Vreedhi Financial Services has
secured a nonbanking finance company licence from the Reserve Bank of India to provide credit and
other services to micro-enterprises operating in tier II-III cities and small towns. RBI has imposed a
penalty of Rs 35 lakh on Tamilnad Mercantile Bank for violating norms on fraud classification and
notification. RBI set the average base rate to be charged from borrowers by non-banking financial
companies (NBFCs) and micro-finance institutions (MFIs) at 9.21% for the first quarter of the next fiscal
(AprilJune). Kotak Mahindra Bank will charge customers for UPI transactions starting 1st May 2019. For
each Kotak Bank account, the first 30 UPI fund transfers will be free, after which a charge will be levied
on all fund transfers from the bank account. RBI has tweaked Liquidity Coverage Ratio (LCR) norms to
provide an additional 2% window to lenders. Karnataka Bank entered into an MoU with Bharti AXA Life
Insurance Company to distribute the latter‘s life insurance products. Lakshmi Vilas Bank approved the
merger of the private sector lender with Indiabulls Housing Finance (IBH) through a share swap deal.
The RBI came out with guidelines for banks to set up new currency chests, which include a minimum area
of 1,500 square feet for strong room. The new chests should have a processing a capacity of 6.6 lakh
pieces of banknotes per day. The currency chests should have CBL of Rs 1,000 crore, subject to ground
realities and reasonable restrictions, at the discretion of the Reserve Bank. Emirates Islamic has
announced the launch of Chat Banking services for customers via WhatsApp, marking a global first in the
Islamic banking sector. The bank‘s customers will now able to conduct daily banking activities via
WhatsApp in a seamless and hassle-free manner.
RBL Bank has partnered with credit profiler CreditVidya to improve the lender‘s customer experience.
Through this partnership, the private sector lender will be able to gain significant insights into its
customer base. The Institute for Development and Research in Banking Technology (IDRBT), an arm of
RBI, has launched a 5G Use Cases Lab for banking and financial sector. The 5G technology, along with
blockchain, will be progressively adopted by banks. IDBI Bank has launched ‗NRI-Insta-Online‘ account
opening process for NRIs residing in the Financial Action Task Force (FATF) member countries. The
person will not be required to furnish physical documents as well as KYC proofs for opening an account
with the bank. IDBI Bank will introduce two Repo Linked Products Suvidha Plus Home Loan and Suvidha
Plus Auto Loan. The Cabinet has approved a capital infusion of Rs 4,557 crore into IDBI Bank. ECL
Finance Ltd, a subsidiary of Edelweiss Financial Services, and Central Bank of India have signed an
agreement for priority sector lending to (MSME's) customers. The State Bank of India opened its
Melbourne office and becoming the first Indian bank to have a branch in the Australian state of Victoria.
UCO Bank has launched 3 new digital products called, UCash, Digilocker and an app in Kolkata, West
Bengal. Axis Bank has launched the Express FD‘, a digital fixed deposit product that allows a customer
to open an FD account in 3 minutes through the digital mode without opening a savings account with the
bank. Standard Chartered Bank, a British multinational banking and financial services company has
launched a DigiSmart credit card. Finance Minister Nirmala Sitharaman has announced that Public Sector
Banks will organise loan melas‘ or ―Shamiana meetings‖ in 400 districts. Airtel Payments Bank launched
―Bharosa savings account‖ services, designed for deepening the financial inclusion in the country.

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10. ONE LINER QUESTIONS-ANSWER ON RBI POLICIES (01.01.2019 to
31.12.2019)
1. As per the Fourth Bi-monthly Monetary Policy statement 2019-20 and w.e.f. 4th Oct. 2019 Reserve
Bank of India has changed the Bank Rate from 5.65% to ______: 5.40%
2. As per the Fourth Bi-monthly Monetary Policy statement 2019-20, Reserve Bank of India has changed
the Repo Rate from 5.40% to ______ w.e.f. 4th Oct. 2019: 5.15%
3. As per the Fourth Bi-monthly Monetary Policy statement 2019-20, Reserve Bank of India has changed
the Reverse Repo Rate from 5.15% to ______ w.e.f. 4th Oct. 2019: 4.90%
4. As per the Fourth Bi-monthly Monetary Policy statement 2019-20, Reserve Bank of India has changed
the Marginal Standing Facility from 5.65% to ______ w.e.f. 4th Oct. 2019: 5.40%
5. Reserve Bank of India has changed the Statutory Liquidity Ratio (SLR) 18.75% to ______ w.e.f. 12th
Oct. 2019: 18.50%
6. As per RBI policy, the loan accounts can be taken over by banks from other banks: After obtaining
credit information from the transferor bank
7. With effect from Jan 05, 2019, Statutory Liquidity Ratio shall be cut by ___ basis points every
quarter? 25 basis points
8. Statutory liquidity ratio shall be cut in stages on quarterly basis to bring it to ___% of net demand and
time liabilities by 11.04.2020? 18.00%
9. Average base rate of 5 largest commercial banks to be used by NBFC-Micro Finance Institutions for
Jan-Mar 2019 quarter is? 9.15%
10. RBI has fixed the limit on stock of External Commercial Borrowing at ___ % of GDP at current market
prices? 6.5%
11. Based on GDP fitures as on 31.03.18, what is the limit on stock ECB fixed for the current financial
year 2018-19? a USD 160 billion
12. Expert Committee appointed by RBI for Economic Capital Framework for RBI is headed by: Dr. Bimal
Jalan
13. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an individual resident can
borrow up to _____ from relative outside India? USD 250000
14. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an Indian student studying
abroad can borrow up to _____ to meet fee and expenses. USD 250000
15. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an AD in India holding
VOSTRO account of a foreign bank, can allow OD up to Rs.___: Rs.500 cr
16. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an importer in India can
raise trade credit for import up to ____ per transaction: USD 50 million
17. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an Indian import can raise
trade credit with a minimum average maturity of ___ for non-capital goods? 1 year
18. As per RBI’s Forex Management (Borrowing and Lending) Directions 2018, an Indian import can raise
trade credit with a minimum average maturity of ___ for capital goods? 3 years
19. As per RBI directions (Jan 2019) for MSME restructuring loans of GST-registered MSMEs can be
restructured for total exposure up to? Rs.25 cr
20. As per RBI directions (Jan 2019) for MSME restructuring loans of GST-registered MSMEs can be
restructured. On restructure of such loan, the asset classification shall be: will not be downgraded
21. As per RBI directions (Jan 2019) for MSME restructuring loans of GST-registered MSMEs can be
restructured. Such restructuring should be implemented by: 31.03.20
22. As per RBI directions (Jan 2019) for MSME restructuring loans of GST-registered MSMEs can be
restructured. For such accounts, what is additional provision, which banks have to make? 5%
23. As per revision in DAY-NRLM scheme, the min no. of members in a group enterprise, for the purpose
of financing can be: 3
24. As per RBI guidelines, the Loan System of Credit Delivery w.e.f. 1.4.19 is applicable for corporate
borrowers availing fund based working capital of ___ from banking system? Rs.1500 millon
25. As per RBI guidelines on Loan System of Credit Delivery, the working capital loan components should
be ___ of availed working capital limit, to start with? 40%
26. As per RBI guidelines on Loan System of Credit Delivery, what is min repayment period of working
capital loan? 7 days
27. All transactions, involving payment of interest on rupee deposits shall be rounded off to ___ nearest
Re.1
28. 02 All transactions, involving payment of interest on FCNR-B deposits shall be rounded off to ___
decimal places : two

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 37 | P a g e
29. A term deposit is maturing on Sunday, a non-business working day. Bank makes payment on Monday, a
working day. Interest shall be paid: up to Monday
30. Generally interest on current account balances cannot be paid. But it can be paid in accounts in the
name of: deceased customers
31. In case of saving bank account, differential rates of interest may be provided for any end-of-day
balance : exceeding Rs.1 lac
32. Interest on domestic rupee savings deposits shall be calculated on : on daily product basis
33. The term Bulk Deposit means single Rupee term deposits of : Rs.2 cr and above
34. Banks can offer term deposits without premature withdrawal option for term deposits accepted from
individuals (held singly or jointly) for : above Rs.15 lac
35. In case of term deposits, differential interest rate shall be offered only on : bulk deposits b deposit
of Rs.15 lac and above c deposit of Rs.100 lac or above d deposits of less than Rs.2 cr
36. Interest on savings deposit shall be credited at ____ intervals. quarterly or shorter
37. Banks can pay interest on the minimum credit balance in the composite cash credit (KCC) account of
a farmer during the period ____ :from 10th to last day of each calendar month
38. What penalty can be recovered by banks for pre-mature withdrawal of term deposits by customers?
bank discretion if penality is brought to customer notice before acceptance of deposit
39. Banks can not open saving bank account and pay interest in the name of which of the following? a KVI
Boards b No profit no loss companies as per permitted by Central Govt. c Agriculture produce
marketing committee d all types of SHG
40. Crop loan upto an amount of Rs.___ can be allowed without any collateral security as per RBI
direction of February 2019: a Rs.1 lac b Rs.1.60 lac c Rs.2.20 lac d Rs.3 lac
41. In its monetary and credit policy review of Feb 2019, RBI decided to fix the risk weight for all
exposure to NBFCs to: as per their rating by SEBI approved rating agencies
42. KCC facility extended by RBI during Feb 2019, does not cover which of the following activities? a
fisheries b poultry c dairy d none of the above
43. For interest subvention under MSME 2018 scheme, to be eligible, an MSME needs to have, which of the
following? Udyog Aadhaar number and GSTN Number
44. Under MSME Interest subvention Scheme 2018, incremental TL or WC given to MSME is eligible for an
amount up to Rs.: 100 lac
45. Under MSME Interest subvention Scheme 2018, subsidy shall be calculated as ___ of outstanding
balance from time to time, on incremental amount of WC or TL from date of notification: 2%
46. Under PM Shram Yogi Maan Dhan (PMSYM), an unorganized sector worker with monthly income up to
Rs.___ is eligible: Rs.15000
47. Under PM Shram Yogi Maan Dhan (PMSYM), an unorganized sector worker within age group of ___ is
eligible: 18 to 40
48. Under PM Shram Yogi Maan Dhan (PMSYM), an unorganized sector worker shall be able to get a
monthly pension of ____ on completion of age of 60 years. Rs.3000
49. As per NI (Amendment) Act 2018, court can direct drawer of a cheque to deposit ___ % amount of
cheque as interim compensation to holder (complainant) : 20%
50. As per NI (Amendment) Act 2018, court can direct drawer of a cheque to pay amount of
compensation, within a period of: 60 days and extended period of 30 days
51. As per NI (Amendment) Act 2018, Appelate court can direct drawer of a cheque to deposit ___ %
amount of fine or compensation if he wants to make appeal against decision of the trial court: 20%
52. As per NI (Amendment) Act 2018, court can direct the payee (complainant) to return the
compensation within ____ if drawer is not held guilty: 60 days and extended period of 30 days
53. The following routes are available for borrowers under External Commercial Borrowing? a approval
route and automatic route
54. Which of the following cannot be form of ECB for INR denominated ECB? FCCBs and FCEBs
55. Normally under ECB, the minimum average maturity period cannot be less than? 3 years
56. Manufacturing sector companies may raise ECBs with MAMP of 1 year for ECB up to ____ million or its
equivalent per financial year. :USD 50 million
57. All-in-cost ceiling for ECB is prescribed by RBI at: Benchmark + 4.5%
58. Prepayment charge/ penal interest for default or breach of covenants under ECB should not be more
than ____ over and above the contracted rate of interest on the outstanding principal amount and
will be outside the all-in-cost ceiling. : 2%
59. Infrastructure space companies are required to mandatorily hedge ____ of their ECB exposure in case
average maturity of ECB is less than 5 years. :70%
60. Under the ECB framework, all eligible borrowers can raise ECB up to ___ million or equivalent per

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 38 | P a g e
 financial year under auto route. : USD 750 million
61. Under the ECB framework, govt. recognized startup borrowers can raise ECB up to ____ million or
equivalent per financial year under auto route.: USD 3 million
62. To secure borrowing under ECB, which of the type of security can be allowed by banks? charge on
immovable or immovable property or financial securities
63. To raise funds under automatic route of ECB, which of the following is required? loan registration
number from RBI
64. Public Sector Oil Marketing Companies (OMCs) can raise ECB for working capital purposes with
minimum average maturity period of 3 years under the automatic route without mandatory hedging
and individual limit requirements up to ____ or equivalent. USD 10000 million
65. Under Insolvency and Bankruptcy Code 2016 (IBC2016), insolvency is failure of a company or LLP to
pay due amount of ____ or above : 1 lac
66. Under Insolvency and Bankruptcy Code 2016 (IBC2016), insolvency is failure of individuals or
partnership to pay due amount of ____ or above. : Rs.1000
67. Insolvency and Bankruptcy Code 2016 (IBC-2016), for corporates, the involvency process can be
initiated at: shareholders or employees
68. Which of the following is not part of pillars of Insolvency and Bankruptcy Code 2016 (IBC2016)?
Insolvency Resolution Professionals
69. Under Insolvency and Bankruptcy Code 2016 (IBC2016), who prepares the insolvency resolution plan? a
insolvency resolution professionals
70. Under Insolvency and Bankruptcy Code 2016 (IBC2016), an insolvency resolution plan is required to be
approved by ___ of creditors by vote (voting rights) : 66%
71. Under Insolvency and Bankruptcy Code 2016 (IBC2016), National Company Law Tribunal can decide
admission of a case with a period of ___: 14 days
72. Under Insolvency and Bankruptcy Code 2016 (IBC2016), insolvency resolution professional is required
to place the resolution plan before creditors within : 180 days
73. Under Insolvency and Bankruptcy Code 2016 (IBC2016), if a resolution plan is not approved by
financial creditor within stipulated period, time period can be extended by National Company Law
Tribunal by: 90 days
74. Under Insolvency and Bankruptcy Code 2016 (IBC2016), a corporate debtor may be put into
liquidation if (which one is correct, out of the following): a a 66% majority of the creditor’s
committee decides to liquidate the corporate debtor; b creditor’s committee does not approve a
resolution plan within 180 days (or within the extended 90 days); c debtor contravenes the agreed
resolution plan and an affected person makes an application to the NCLT to liquidate the corporate
debtor. d all the above
75. Kissan Credit Card can be issued to: a owner cultivator farmers and tenant farmers b SHG or JLG of
farmers c Animal husbandry farmers and fisheries d all the above
76. Kissan Credit Card limit is sanctioned for a period of 5 years. 1st year limit is sanctioned as: c (area
under cultivation x scale of finance) + 30%
77. Kissan Credit Card limit for 3rd is sanctioned by adding __ being escalation cost: 10% + 2nd year
limit
78. The long term loan limit under KCC should be sanctioned taking into account the investment such as
land development, minor irrigation, farm equipment etc. for a period up to : 5 years
79. Under KCC scheme, the marginal farmer can be sanctioned a flexible limit of: Rs.10000 to Rs.50000
80. For KCC, which of the following statement is not correctly stated? a validity period can be
determined by bank b periodic review period can be determined by bank c rate of interest can be
determined by bank d none of the above
81. What is the normal repayment period of long term loan under KCC ? 5 years
82. The margin requirement is not applicable on KCC for an amount up to? Rs.1.60 lac
83. The collateral security requirement is waived on KCC for an amount up to? Rs.1.60 lac
84. In KCC, if there is recovery tieup, banks can consider waiver of collateral security for a loan up to
Rs:. Rs.3 lac
85. Cost of cultivation for wheat is Rs.15000 per acre. What shall be KCC limit for 2nd year? Rs.21450
Lead Bank Scheme
86. Which of the following is not part of Lead Bank Scheme fora? National Level Banks committee
87. Meetings of Block Level Bankers’ Committee (BLBC) are held on ___ basis, under Lead Bank Scheme?
quarterly
88. Who is chairs the quarterly meeting of Distt. Consultative Committee under Lead Bank Scheme? a
Regional Director - RBI b General Manager-NABADRD c Distt. Collector d Regional Manager of SLBC

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 39 | P a g e
 Convenor Bank
89. The Lead Distt. Manager under Lead Bank Scheme is required to convene ___ public meeting at
various locations in the district. :half yearly
90. The Distt. Level Review Committee (DLRC) meeting should be held ___ under Lead Bank Scheme?
quarterly
91. State Level Bankers’ Committee is chaired by? CMD or ED of SLBC Convenor Bank
92. State Level Bankers’ Committee meetings are held on ___ basis? quarterly
93. All District Credit Plans under Lead Bank Scheme are required to launched by ____ every year, after
these are aggregated in State level plans? 1 st April
94. Under Lead Bank Scheme, there are various reporting statements. The format of which of these does
match? Annual Credit Plan (ACP) : LBSMIS-1
95. Under Lead Bank Scheme, bank branches in Rural and Semi-urban places are required to achieve a
credit deposit ratio of ___, separately on all India basis. :60%
96. No Due Certificate from the individual borrowers (including SHGs & JLGs) in rural and semiurban
areas for all types of loans including loans under Government Sponsored Schemes, irrespective of the
amount involved is not to be taken one amount of loan is up to: not to be taken irrespective of
amount of loan
97. The preparation of potential linked plan for next year, is to be completed under Lead Bank Scheme
by: August
98. To be eligible to avail loan and capital subsidy under PM Awas Yojna for MIG-1, what is the annual
household income ceiling? Rs.12 lac
99. To be eligible to avail loan and capital subsidy under PM Awas Yojna for MIG-2, what is the annual
household income ceiling? Rs.18 lac
100. Rate of interest subsidy under PM Awas Yojna for MIG housing is ___ per annum: 4% for MIG-1 and
3% for MIG2
101. Eligible loan amount for interest subsidy under MIG under PM Awas Yojna is: Rs.9 lac for MIG-1
and Rs.12 lac for MIG-2
102. Dwelling unit carpet area to be eligible for interest subsidy under MIG under PM Awas Yojna is:
160 sq meters for MIG-1 and 200 sq meters for MIG-2
103. Who can invest in Sovereign Gold Bond Scheme (SGB) 2019-20Series I/II/III/IV? a Individuals only b
HUF only c Trust only d all
104. What is denomination of Sovereign Gold Bond Scheme (SGB) 201920- Series I/II/III/IV? One gram
of gold or multiple
105. The issue price of gold bonds under Sovereign Gold Bond Scheme (SGB) 2019-20- Series I/II/III/IV,
is Rs. ___ per gram, less than nominal value? Rs.50
106. What is rate of interest on gold bonds under Sovereign Gold Bond Scheme (SGB) 2019-20- Series I/
II/III/IV? 2.5%
107. What is redemption period of gold bonds under Sovereign Gold Bond Scheme (SGB) 2019-20- Series
I/ II/III/IV? 8 years
108. What is max limit of subscription per individual, to gold bonds under Sovereign Gold Bond Scheme
(SGB) 2019-20- Series I/II/III/ IV? 4 kg per financial year
109. What has been added to list of official valid documents (OVD) under RBI KYC Directions 2019?
Aadhaar
110. Under RTGS, what is the initial cut-off period i.e. period for customer transactions? 7 am to 6 pm
111. Time varying charges under RTGS per outward transaction, in addition to flat processing charges,
after 6 pm, are? Rs.10 BUT NOW WAIVED.
112. Large modern currency chest can recover commission of ___ per packet of 100 pieces, from non-
currency chest bank branches Rs.8
113. As per Union Govt. final Budget for 2019-20, interest on home loan for 1st time buyer to purchase
house valued up to Rs.45 lac, will get total tax deduction up to:Rs.3.50 lac
114. As per Union Govt. final Budget for 2019-20, surcharge on income tax for individuals increased
from __ to __ with taxable income of Rs.2 cr to Rs.5 cr. 15% to 25%
115. As per Union Govt. final Budget for 2019-20, surcharge on income tax for individuals increased
from __ to __ with taxable income above Rs.5 cr. 15% to 37%
116. As per Union Govt. final Budget for 2019-20, individuals and HUFs to deduct 5% tax at source on
payments made to resident contractors and professionals where aggregate payments exceed Rs.__
during a financial year? Rs.50 lac
117. As per Union Govt. final Budget for 2019-20, filing of income tax return is mandatory if amount
spent on foreign travel exceeds Rs.___ or annual electricity bill exceed Rs.___ or the balance in their

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 40 | P a g e
 current account with a bank is more than Rs.___ Rs.2 lac or Rs.1 lac or Rs.1 cr respectively.
118. As per Union Govt. final Budget for 2019-20, entire lumpsum withdrawal from National Pension
Scheme which is limited to ___ of accumulated amount, shall be exempted from tax as against 40%
presently. 60%
119. As per Union Govt. final Budget for 2019-20, a listed company which wants to buy back its shares,
has to pay ___ tax on buy back. 20%
120. As per Union Govt. final Budget for 2019-20, corporate tax has been reduced to 25% for companies
with turnover up to Rs.___ in 2017-18? Rs.400 cr
121. As per Union Govt. final Budget for 2019-20, TDS shall be ___ on cash withdrawals exceeding Rs.1
cr duing an year from an account bank or post-office. 2%
122. As per Union Govt. final Budget for 2019-20, business with turnover exceeding Rs.___cr to provide
for electronic mode of payment without levying any charges or MDR. Rs.50 cr
123. As per Union Govt. final Budget for 2019-20, if a business with prescribed turnover fails to provide
for electronic mode of payment without levying any charges, the penalty will be ___ per day. Rs.5000
124. As per Union Govt. final Budget for 2019-20, the highest effective tax rate on an individual
including cess and surcharge shall be: 42.7%
125. As per Union Govt. final Budget for 2019-20, where PAN is required, a person can provide details
of ___ instead of PAN. Aadhaar
126. As per Union Govt. final Budget for 2019-20, the disinvestment target is Rs.___. Rs.105000 cr
127. As per Union Govt. final Budget for 2019-20, the govt. will provide additional capital to public
sector banks to the tune of Rs.___ Rs.70000 cr
128. As per Union Govt. final Budget for 2019-20, a life line of Rs.___ has been provided by Govt. to
ease shortage of credit to fundamentally sound NBFCs by promising to bear the first loss of up to 10%
of assets purchased by PSBs from NBFCs, for 6 months? Rs.100000 cr
129. As per Union Govt. final Budget for 2019-20, under National Pension Scheme, the contribution for
all central govt. employees has been enhanced from existing 10% to ___ of basic pay? 14%
130. As per Union Govt. final Budget for 2019-20, on interest on loan taken for purchase of electric
vehicle, interest up to Rs.___ will get additional income tax deduction? Rs.
131. As per Union Govt. final Budget for 2019-20, companies with large promoter stake can have max
__% of share capital compared to 75% previously? 65%
132. As per Union Govt. final Budget for 2019-20, which authority shall be new regulator in case of
housing finance companies? RBI
133. As per Union Govt. final Budget for 2019-20, what can be the level of foreign direct investment in
insurance intermediaries? 100%
134. As per Union Govt. final Budget for 2019-20, govt. proposes to lower stake in non-financial public
sector undertakings below: 51%
135. As per Union Govt. final Budget for 2019-20, the standup India scheme has been extended up to
the year: 2025
136. An interest rate option contracts that can be exercised only on the expiration date. European
option
137. Interest rate derivative contract that involves exchange of interest payments on a notional
principal amount, on a future date, at agreed rates, for a defined forward period. Forward rate
agreement
138. A financial derivative contract whose value is derived from one or more interest rates, prices of
interest rate instruments, or interest rate indices. interest rate derivative
139. A standardized interest rate derivative contracts traded on a recognized stock exchange to buy or
sell a notional security or any other interest-bearing instrument or an index of such instruments or
interest rates at a specified future date, at a price determined at the time of the contract. interest
rate futures
140. An option contract whose value is based on Rupee interest rates or interest rate instruments.
Interest rate option
141. A series of interest rate call options (called caplets) in which the buyer of the option receives a
payment at the end of each period when the underlying interest rate is above a rate agreed in
advance (strike rate) c interest rate cap
142. A series of interest rate put options in which the buyer of the option receives a payment at the
end of each period when the underlying interest rate is below the strike rate. interest rate floor
143. A derivative contract where a market participant simultaneously purchases an interest rate cap
and sells an interest rate floor on the same interest rate for the same maturity and notional principal
amount. interest rate collar

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 41 | P a g e
144. A derivative contract which involves simultaneous purchase of an interest rate floor and sale of an
interest rate cap on the same interest rate for the same maturity and notional principal amount.
reverse interest rate collar
145. A derivative contract that involves exchange of a stream of agreed interest payments on a
‘notional principal’ amount during a specified period. interest rate swap
146. An option on interest rate swaps. A swaption gives the buyer the right, but not the obligation, to
enter into an interest rate swap. interest rate swaption
147. A financial derivative contract whose value, in absolute terms, changes more than proportionately
to the change in the underlying risk :leveraged derivative
148. Interest rate futures based on any Rupee denominated money market interest rate or money
market instrument. Money market futures
149. A financial derivative contract that gives the buyer the right, but not the obligation, to either buy
(call option) or sell (put option) an asset at a pre-determined price (known as the strike price) by a
specified date (known as the expiration date). Option
150. An interest rate swap based on the Overnight Mumbai Interbank Outright Rate (MIBOR) benchmark
published by Financial Benchmarks India Pvt. Ltd (FBIL). overnight indexed swaps
151. A financial derivative contract which is a combination of cash and/or generic derivative
instrument. structured derivative
152. As per RBI directions, the operating hours of RTGS wef 26.08.19 for customer transactions are: 7
am to 6.00 pm
153. As per RBI directions, the operating hours of RTGS wef 26.08.19 for interbank transactions are: 7
am to 7.45 pm
154. As per RBI directions, bank loans for on-lending to NBFC for term lending to agriculture up to
Rs.____, per borrower, shall be classified as priority sector loans: Rs.10 lac
155. As per RBI directions, bank loans for on-lending to NBFC for lending lending to Micro and Small
enterprises up to Rs.____, per borrower, shall be classified as priority sector loans: Rs.20 lac
156. As per RBI directions, bank loans for on-lending to housing finance companies for lending for
housing to individuals up to Rs.____, per borrower, shall be classified as priority sector loans: Rs.20
lac
157. As per RBI directions, bank loans for on-lending to NBFCs can be allowed under an overall cap,
which is ____ of individual bank’s total priority sector loans? 5%
158. As per RBI directions, which of the following transactions will be included in the no. of valid
transactions allowed by banks free of charge, under ATM access policy of RBI? a currency notes not
available in ATM b transaction failed for technical reasons c invalid PIN d none of the above
159. Under interest subvention scheme for fisheries and animal husbandry farmers available for 2018-
19 and 2019-20, what is the eligible loan amount? Rs.2 lac
160. Under interest subvention scheme for fisheries and animal husbandry farmers available for 2018-
19 and 2019-20, if a farmer is availing crop loan also, what is the total eligible loan amount on
aggregated basis? Rs.3 lac
161. Under interest subvention scheme for fisheries and animal husbandry farmers available for 2018-
19 and 2019-20, what is the rate of subvention? 2%
162. Under interest subvention scheme for fisheries and animal husbandry farmers available for 2018-
19 and 2019-20, what is the rate of additional subvention for prompt payment of loan? 3%
163. Under interest subvention scheme for fisheries and animal husbandry farmers available for 2018-
19 and 2019-20, what is the rate of interest, which banks can charge to the borrower? 7%
164. As per RBI bi-monthly monetary policy review in August 2019, what change has been made in risk
weight on consumer credit under Regulatory Capital guidelines? reduced from 125% to 100%
165. Under Large exposure framework applicable from 1.4.19, a bank’s exposure to a single NBFC is
restricted to ___ of bank’s Tier-1 capital. 20%
166. On 21.08.19, RBI permitted processing of e-mandate on cards for recurring transactions (merchant
payment) without additional factor of authentication (AFA), for an amount of single transaction up to
Rs.__ Rs.2000
167. As per Dr. Bimal Jalan Committee recommendations accepted by RBI, RBI’s economic capital has 2
components? realized equity and revaluation balances
168. As per Dr. Bimal Jalan Committee recommendations the range of realized equity to cover credit
and operational risk should be between: 5.5% to 6.5%
169. As per Dr. Bimal Jalan Committee recommendations the range of economic capital of RBI should
be between : 20% to 24.5%
170. In case of a failed ATM transactions (a/c debited but cash not dispensed), the turn-around time

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 (restoration of amount) fixed by RBI w.e.f. 1.10.19, is: T + 5 days
171. The turn-around time in respect of failed e-transaction does not match in which of the following:
IMPS = T + 5 days
172. In which of the following failed e-transactions, the turn-around time is not T + 5 days : National
Automated clearing house
173. A ‘failed transaction’ is a transaction which has not been fully completed due to any reason not
attributable to the customer. This does not include, which of the following? a failure in
communication links b non-availability of cash in an ATM c time-out of sessions d all the above
174. Incremental export credit over corresponding date of the preceding year can be included in
priority sector lending classification, where the export credit to an individual borrower is up to Rs.__
? Rs.40
175. Incremental export credit over corresponding date of the preceding year can be included in
priority sector loans in case of eligible exporters. The total such amount on aggregate basis can be
upto ___ per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is
higher? 2%
176. Generally, tenure of external concurrent auditors with a bank shall not be more than ___ years on
continuous basis: 5 years
177. No concurrent auditor shall be allowed to continue with a branch/business unit for a period of
more than ___ years. :3 years
178. The system-wide average of the last 3 years achievement of priority sector targets with regard to
overall direct lending to noncorporate farmers is notified by RBI every year. The applicable system
wide average figure for computing achievement under priority sector lending for the FY 2019-20 is
___. 12.11%
179. Effect from April 1, 2019, a bank’s exposure to a single NBFC is restricted to ___ per cent of its
Tier I capital: 15%
180. Consumer credit, including personal loans but excluding credit card receivables attracts a risk
weight of ___ per cent for capital adequacy purpose? 100%
181. Agency banks are required to spread disbursal of pension over the last ___ of the month, except
for the month of March: last 4 working days
182. Agency banks are required to credit the pension for the month of March on: 1 st working day of
April
183. Bank branches are required to have structured interaction with a cross section of pensioners
serviced at the branch on quarterly basis, where the number of pensioners of all governments and
departments exceeds a fixed number, say: 100 or 200
184. Deposit Insurance and Credit Guarantee Corporation (DICGC) provide deposit insurance for which
of the following? a commercial banks b cooperative banks c small finance banks and payment banks d
ALL of the above
185. What is the max eligible amount of deposit for insurance cover as per Deposit Insurance and
Credit Guarantee Corporation (DICGC) scheme? a Rs.10000 b Rs.50000 c Rs.100000 d Any amount of
eligible deposit
186. What is the max amount of claim that shall be paid by DICGC in case of need, per customer per
bank, in same name and same capacity: Rs.100000
187. Which of the following deposit is eligible for insurance under DICGC scheme? a inter-bank deposit
b deposit of Central and State Govt. c deposit of a bank in overseas branch d none of the above
188. The premium payable on DICGC deposit insurance cover is ___ per Rs.100 per annum. 10 p
189. Deposit insurance claim is payable by DICGC, in which of the following events? a winding up of a
bank b amalgamation of a bank c reconstruction of a bank d any of the above
190. Under on-tap authoration of payment system guidelines of RBI, which of the following is eligible
to apply for authorization? a Bharat Bill Payment Operating Unit b Trade Receivables Electronic
Discounting System c White Label ATM d any of the above
191. Under on-tap authoration of payment system guidelines of RBI, what is min net worth condition of
Bhart Bill Payment Operating Unit? Rs.100 cr
192. Under on-tap authoration of payment system guidelines of RBI, what is min paid up equity capital
condition of Trade Receivables Electronic Discounting System? Rs.25 cr
193. For expanding and deepening the digital payments ecosystem, State/ UT Level Bankers
Committees (SLBCs/ UTLBCs) shall identify one district in their respective States/ UTs in consultation
with banks and stakeholders to make at least — — 100% digitally enabled, on pilot basis? one district
194. RBI has deferred to implement last tranche of 0.625% of CCB and now will be implemented as on :-
31.03.2020

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195. The percentage of CCB to be maintained :- 2.5%
196. PPIs issued by authorized Non-Bank, max days to reverse the amount of un-authorized transaction into
customer’s account:- 10 days
197. The overall maximum time for resolution of complain ______ days :- 90 days
198. The customer’s liability would be _______ if contributory fraud or negligence on the part of the PPI
issuer or third party breach but reported within 3 days to the PPI issuer :- zero
199. Maximum customer’s liability if reported within 4 days to 7 days – Rs. ______ or transaction amount
whichever is lower :- 10000
200. Maximum customer’s liability if reported after 7 days –: as per board approved policy
201. Un-authorised electronic transactions (in case of banks), the customer’s liability will be Rs. __________
in case of BSBD, Rs. _______ in case of other SB accounts and Rs. _________ in case of CA/OD/CC, if the
transaction reported within 4 to 7 days:- 5000, 10000, 25000
202. ECB under automatic route upto USD _____ or equivalent per financial year:- 750 mi
203. As per RBI monetary policy dated 07.02.2019, Penal interst on shortfall in reserve requirements
depending on the duration of shortfalls is Bank Rate plus _______ % or Bank Rate plus _______ %. :- 3, 5
204. As per RBI notification dated 21.02.2019 2% interest subvention is applicable till ______:- 31.03.2020
205. Interest subvention is applicable for MSME with valid udyog Aadhar and GSTN upto a maximum financial
assistance of Rs. __________ lakh.:- 100
206. Interst subvention shall be admissible for any period during which the account remains NPA – Yes/No: No
207. Nodal office of eligible lending institutions should submit their half yearly claims to _________:- SIDBI
208. Trade Finance in the forms of Buyers’ Credit and Suppliers’ Credit to Indian Importer upto USD _______
or equivalent per import transaction for oil/gas refining marketing, airline and shipping companies. :- 150
mi
209. Trade Finance in the forms of Buyers’ Credit and Suppliers’ Credit to Indian Importer upto USD _____
or equivalent per import transaction for other companies. :- 50 mi
210. The period of Trade Finance reckoned from the date of shipment, shall be upto ________ years for
import of capital goods and _______ year or the operating cycle whichever is less for non capital goods.:- 3,
1
211. For shipyards / ship builders the period of TC for import of non capital goods can be upto _____year. :-
3 years
212. All in cost ceiling for TC should be benchmark rate plus ________ bps spread. :- 250
213. R-Return on fortnightly basis to be reported under ____________ :- FETERS
214. The limit of FPI investment in Central Govt. Securities (G-Sec), State Development Loans (SDLs) and
Corporate Bonds shall be ______%, ______% and ______% of outstanding stocks of securities respectively in
FY 2019-20.Large Exposures Framework (LEF) (01.04.2019) 33 to 39. :- 6, 2, 9
215. For the purpose of reckoning exposure limits under LEF, an Indian branch of a foreign GSIB will be
considered as any other Indian bank and can accordingly take exposure upto _______% of its Tier I capital on
another non-GSIB in India:- 25%
216. The interbank exposure limit of an Indian branch of a foreign G-SIB with its Head Office will be ______%
of its Tier I capital in India :- 20%
217. Under the LEF, the sum of all exposure values of a bank (measured as specified in paragraphs 7, 8, 9
and 10 of this framework) to a counterparty or a group of connected counterparties (as defined in paragraph
6 below) is defined as a ‘Large Exposure(LE)’, if it is equal to or above ______ percent of the bank’s eligible
capital base :- 10%
218. It has been decided that henceforth, banks should disclose divergences, if either or both of the following
conditions are satisfied: (a) the additional provisioning for NPAs assessed by RBI exceeds _____ per cent of
the reported profit before provisions and contingencies for the reference period, and (b) the additional
Gross NPAs identified by RBI exceed _____ per cent of the published incremental Gross NPAs for the
reference period. :- 10, 15
219. Ombudsman Scheme for Non-Banking Financial Companies (NBFCs) is applicable for (a) are authorized to
accept deposits; (b) are Non-Deposit Taking Non-Banking Financial Companies having customer interface,
with assets size of Rupees _______ crore or above, as on the date of the audited balance sheet of the
previous financial year 100
220. The CRILC-Main Report shall be submitted on a monthly basis if aggregate exposure is Rs. _______ Cr
or above 5
221. Resolution Plans involving restructuring / change in ownership in respect of account where the
aggregate exposure of lenders is ₹ 1 billion and above, shall require independent credit evaluation
(ICE) of the residual debt by credit rating agencies (CRAs) specifically authorized by the Reserve Bank
for this purpose. While accounts with aggregate exposure of ₹ ________ billion and above shall

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 require two such ICEs, others shall require one ICE :- 5
222. Where a viable Resolution Plan in respect of a borrower is not implemented within 180 days from
the end of Review Period, all lenders shall make additional provisions_______% of total outstanding.
20
223. Where a viable Resolution Plan in respect of a borrower is not implemented within 365 days from the
end of Review Period, all lenders shall make additional provisions _______% of total outstanding (other than
additional provision made for above):- 15
224. If the change in ownership is implemented under this framework, then the classification as ‘standard’
shall be subject to the condition among others is that the new promoter shall have acquired at least _____
per cent of the paid up equity capital as well as voting rights of the borrower entity and shall be the single
largest shareholder of the borrower entity:- 26
225. Some modifications have come under maintaining BSBD accounts in bank are as under;
(a) No limit on number and value of deposits that can be made in a month
(b) Minimum of four withdrawals in a month, including ATM withdrawals
(c) not be eligible for opening any other savings bank deposit account in that bank
(d) If have other SB account in that bank, he/she will be required to close it within 60 days from the
date of opening a BSBD Account
226. Which statement is false?
227. The reimbursement of MDR claims will be handled directly by _________________ w.e.f. january 01,
2019 instead of RBI. MeitY
228. An electronic trading platform for buying/selling foreign exchange by retail customers of banks,
FX-Retail, is ready for rollout by _____________ CCIL

EXPECTED QUESTIONS ON BUDGET 2019-20

1) The focus of the Union Budget for 2019-20 is ‘Gaon, Gareeb aur Kisan’, as the government aims to
provide houses, electricity and clean cooking facility to all rural households by.:2022
2) India is all set to become US$ trillion economy by the end of FY2020. :3
3) India was a US$ 1.85 trillion economy in 2014 and it has reached trillion in five years, the fastest
growing major economy and the sixth largest economy in world. :US$ 2.7
4) India targets to become economy in the next five years and might become a US$ 10 trillion
economy in the next eight years thereafter. US$ 5 trillion
5) India is now the __ largest economy in the world. : 6th
6) Indian economy is globally the _____largest in Purchasing Power Parity (PPP) terms. 3rd
7) The Government has assumed a nominal GDP growth rate of __ (i.e., real growth plus inflation) in
2019-20. The nominal growth estimate for 2018-19 was 11.5%.: 12%
8) Total expenditure for 2019-20 is budgeted at Rs. 2,786,349 crore, an increase of __ from 2018-19
(budget estimates). :14.09%
9) The receipts (other than net borrowings) are expected to increase by to Rs. 20,82,589 crore,
owing to higher estimated revenue from corporation tax and dividends. a)13.8% b)12.4% c)14.2%
d)15.5%
10) Revenue deficit is targeted at of GDP, which is higher than the revised estimate of 2.2% in 2018-
19: 2%
11) Fiscal deficit is targeted at of GDP, lower than the revised estimate of 3.4% in 2018-19. : 3.3%
12) The government is estimated to breach its budgeted target for fiscal deficit (3.3%) in 2018-19 and the
medium term fiscal target of __ in 2019-20. : 3.1%
13) Among the top 13 ministries with the highest allocations, the highest percentage increase is
observed in the ________ (82.9%), followed by Ministry of Petroleum and Natural Gas (32.1%) and
Ministry of Railways (23.4%). : Ministry of Agriculture & Farmers Welfare
14) As per the budget, target of Rs. crore of disinvestment receipts set for the FY 2019-
20.:1,05,000
15) Individual taxpayer with annual income up to Rs. lac will get full tax rebate and hence will not
be required to pay any tax. : 5
16) In the Union Budget 2019-20, the surcharge on income tax for individuals earning between two crore
rupees and five crore rupees has been increased to ___% and for persons earning over five crore rupees
has been increased to ____%. a) 25%; 37% b) 30%; 40% c) Now Rolled Back d) a and c
17) Currently, companies with annual turnover of less than Rs. 250 crore pay corporate income tax at
the rate of 25%. This threshold has been increased to Rs cr. : 400
18) A TDS of 2% will be levied by financial companies and post offices on individuals for cash withdrawals

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 45 | P a g e
exceeding rupees in a year from a bank account to promote less cash economy. :1 cr
19) Enhanced interest deduction up to Rs. ______ for purchase of an affordable house for self-occupied
house owners. The conditions for availing this deduction are that the loan must be sanctioned in FY 2019-
20 and the stamp duty on the house should not exceed Rs. 45 lakh rupees. Further, the individual should
not own another residential house property as of the date of the home loan. : 3,50,000
20) A tax deduction of up to Rs. will be provided on interest paid on loans to purchase an electric
vehicle. This deduction will be applicable for loans sanctioned between FY 2019-20 and FY 2022-23.
1,50,000
21) The Road and Infrastructure Cess on petrol and highspeed diesel has been increased by rupee per
litre. Excise duty has also been increased by one rupee per litre for these products. : One
22) The customs duty on gold and precious metals has been increased from 10% to _ . : 12.5%
23) Business establishments with annual turnover more than Rs. shall offer low cost digital modes
of payment to their customers and no charges to be imposed on customers as well as merchants. : 50 cr
24) NPAs of commercial banks reduced by over Rs. 1 lakh crore over the last year. Record recovery of
over Rs. _____ crore effected over the last four years. Provision coverage ratio at its highest in seven
years. : 4 lakh
25) The government plans to partially guarantee for first ____% of loss to Public Sector Banks for funds
provided in a pooled manner to NBFCs. : 20%
26) As per the Budget 2019-20, Rs. __ crore will be provided for recapitalisation of Public Sector Banks.
70,000
27) The central government will invest Rs.___ lakh crore in infrastructure over the next five years.
100/-
28) The minimum public shareholding in listed companies will be increased from 25% to . :28%
29) Government has proposed granting of loans up to Rs 1 crore for MSMEs within 59 minutes through a
committed online portal. Under the Interest Subvention Scheme for MSMEs, a sum of has been
allocated for FY 2019-20. : Rs.350 cr
30) The Budget proposes to extend the pension benefit to about three crore retail traders & small
shopkeepers whose annual turnover is less than Rs. crore under ‘Pradhan Mantri Karam Yogi Maandhan
Scheme’. : Rs 1.5 cr
31) SFURTI: Common Facility Centres (CFCs) to be setup to facilitate cluster based development for
making traditional industries more productive, profitable and capable for generating sustained
employment opportunities. Full form of SFURTI : Scheme of Fund for Upgradation and Regeneration of
Traditional Industries
32) ASPIRE: 80 Livelihood Business Incubators (LBIs) & 20 Technology Business Incubators (TBIs) to be
setup in 201920. Full Form of ASPIRE : Scheme for Promotion of Innovation, Rural Industry and
Entrepreneurship
33) Capital gains exemptions from sale of residential house for investment in Start-ups extended till
FY21
34) The Budget has proposed to consider issuing Aadhaar Card for NRIs with Indian Passports on their
arrival without waiting for days. : 180
35) As per the Budget, for Insurance intermediaries Foreign Direct Investment (FDI) will be permitted
upto ________: 100%
36) Statutory limit for Foreign Portfolio Investment will be increased from the current to sectoral
limits. : 24%
37) Government to meet public shareholding norms of ___% for all listed PSUs and raise the foreign
shareholding limits to maximum permissible sector limits for all PSU companies which are part of
Emerging Market Index. : 25%
38) The focus of the government is on the ___ for addressing critical gaps in the value chain, including
infrastructure, modernization, traceability, production, productivity, post-harvest management, and
quality control. : Pradhan Mantri Matsya Sampada Yojana’ (PMMSY)
39) To work towards adoption of model which can help in doubling our farmers’ income in time
for our 75th year of Independence. :Zero Budget Farming
40) Under the Pradhan Mantri Gram Sadak Yojana, lakh km of road will be upgraded at an
estimated cost of Rs. 80,250 crore in the next five years. : 1.25lac
41) To ensure 'Har Ghar Jal' by _ all rural households will be provided with piped water supply under
the Jal Jeevan Mission.: 2024
42) India plans electricity, clean cooking facilities for all Indian families by . 2022
43) Under, Pradhan Mantri Awas Yojana – Urban (PMAYUrban), over 81 lakh houses with an investment of
about Rs. ____ lakh crore sanctioned of which construction started in about 47 lakh houses.: 4.83

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 46 | P a g e
44) An overdraft of _ will be provided to women self-help group (SHG) members who hold Jan-Dhan
accounts. Further, a loan up to __ rupees will be provided under the MUDRA scheme to one woman in
every SHG. : Rs 5000; one lakh
45) The Budget has provided for Rs. ____ crore (US$ 60 million) provided for ‘World Class Institutions’
for FY20. : Rs 400/-
46) being developed by National Council for Science Museums to sensitize youth & society about
positive Gandhian values. Gandhipedia
47) A dispute resolution cum amnesty scheme called the is being introduced for resolution and
settlement of legacy cases pending under various Acts, including the Central Excise Tax, 1944, and the
Sugar Cess Act, 1982. : Sabka Vishwas Legacy Dispute Resolution Scheme
48) Under the RBI Act, RBI may set a minimum net worth requirement for NBFCs between Rs. 25 lakh and
two crore rupees. The amendment allows RBI to set the minimum requirement up to Rs. crore. 100
49) The RBI may remove any director of a non-government NBFC and replace him with a temporary
director for a period of ___ years. : 3yrs
50) In case of NBFC, penalties for certain offences has been increased. For example, failure to furnish
information under the Act is punishable with Rs. 2,000. This has been increased to Rs.______. Further,
the penalty for an auditor for failing to comply with the directions of the RBI has been increased from Rs.
5,000 to Rs._______.1,00,000/-;10,00,000/-
51) Government will provide a one-time six months' partial credit guarantee to public sector banks to buy
high-rated pooled assets worth Rs. _____ lakh crore from NBFCs. : 1
52) As per the amendment in National Housing Bank Act, 1987, to register as a housing finance
institution, a company must have a net-owned fund of Rs. 25 lakh, or higher notified amount. This
threshold is being increased to Rs. _____cr or more. : 10
53) National Housing Bank Act is being amended to transfer the powers to regulate to _______: RBI
54) The Insurance Act, 1938 is being amended requiring net owned funds of at least Rs. _____ crore for
registration of foreign insurers engaged in re-insurance business and operating in an International
Financial Services Centre set up in Special Economic Zones. 1,000
55) The Securities and Exchange Board of India,1992 imposes penalties on entities which fail to furnish
information required under law to a stock exchange or furnish incorrect information to the stock
exchange. These penalties range from one lakh rupees to ______ crore rupees. The Act is being
amended to extend the penalty for failure to furnish this information to the SEBI in addition to the stock
exchange. :One
56) Presently under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970; the
Board of Directors of the bank will include four whole time directors. The Act is being amended to
increase the number of directors to _____. :5
57) As per the amendment in General Insurance Business (Nationalisation) Act, 1972; Indian insurance
companies will be reorganised into __ insurance companies (excluding the General Insurance
Corporation):. four
58) Prohibition of Benami Property Transactions Act, 1988 is being amended to increase penalties under
the Act. In addition to existing penalties, any person who fails to comply with summons or furnishes
false information will be liable to pay Rs. _______ for each such failure. Further, under the Act, prior
sanction is required for prosecution of certain offences under the Act from the CBDT. The sanctioning
authority has been changed to Commissioner, Director, Principal Commissioner, or Principal Director of
Income Tax. : 25,000
59) The Finance Bill changes the definition of ‘assessee’ in the Black Money (Undisclosed Foreign Income
and Assets) and Imposition of Tax Act, 2015. Currently, the Act applies to a resident of India. The Bill
amends this to make the Act applicable to both Indian residents and non-residents as defined under the
___________. Income Tax Act
60) The Prevention of Money Laundering Act, 2002 is being amended to increase the responsibilities of
reporting entities (such as, banks and other financial institutions). These entities will be additionally
required to authenticate identities of their clients, the source of their funds, and the nature of
relationship between the transacting parties. Data obtained while verifying transactions must be kept for
_______ years. : 5
61) SEBI Act, 1992 is being amended to add capital expenditure to the list of expenses incurred by the
General Fund maintained by SEBI. Additionally, the Bill amends the Act to constitute a Reserve Fund
which will be credited with ______ of the annual surplus of the General Fund. Further, the
amendment adds penalties for concealment, destruction, or falsification of records, or access to
unauthorised information. The penalties may range from Rs. 1 lakh rupees to up to Rs. _____ crore or
three times the amount of profits made from the act, whichever is higher. 25%;10

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 47 | P a g e
62) India’s Ease of Doing Business ranking under the category of paying taxes jumped from 172 in 2017 to
in the 2019.: 121
63) Aadhaar and _ to be interchangeable and permit those who do not have to file Income Tax
returns by only citing their Aadhaar number: PAN;PAN
64) Taxpayers having annual turnover of less than can now file quarterly returns. : Rs 5 cr
65) Direct tax incentives proposed for an IFSC; 100% profitlinked deduction in any ten-year block within
a fifteen-year period; exemption from dividend distribution tax from current and accumulated income to
companies and mutual funds; exemptions on capital gain to Category-III Alternative Investment Funds
(AIFs). Full form of IFSC: International Financial Services Centre (IFSC)
66) STT restricted only to the difference between settlement and strike price in case of exercise of
options. Full form of STT is _____: Securities Transaction Tax
67) a PSE, incorporated as a new commercial arm of Department of Space. New Space India
Limited (NSIL))
68) new Indian diplomatic Missions in Africa approved in March, 2018, out of which 5 already
opened. Another 4 new Embassies intended in 2019-20. : 18
69) iconic Tourism Sites being developed into model world class tourist destinations. : 17
70) As per the third Bi-monthly Monetary Policy 2019-20 resolution, the Reverse repo rate under the LAF
determined with a spread of 25 bps below the repo rate reduced to ___ per cent.: 5.40

*** ALL THE BEST & BEST OF LUCK ***

Compiled by Sanjay Kumar Trivedy, Chief Manager, Canara Bank, Gandhinagar, Nagpur, Maharashtra 48 | P a g e