RBI Approves Fino Payments Bank for Cross Border Remittances

Reserve Bank of India (RBI) has approved Fino Payments Bank for commencing international remittance business under the Money Transfer Service Scheme (MTSS). The approval will enable the customers of Fino Payments Bank to receive money sent from foreign countries. The money remitted by family members abroad can be directly withdrawn at the nearest micro-ATM or Aadhaar-Enabled Payment Services (AEPS) enabled Fino Bank’s neighbourhood merchant point.

• The headquarters of Fino Payments Bank – Navi Mumbai, Maharashtra.

RBI Releases Framework for Small-value Offline Digital Payments

Reserve Bank of India (RBI) issued a framework for facilitating small-value digital payments in offline mode using cards, wallets, mobile devices, etc, to push digital transactions in rural and semi-urban areas.The upper limit of an offline payment transaction was fixed at Rs 200, with a total limit on a payment instrument be at Rs 2,000 at any point in time.

• Note – Offline digital payment is a transaction that does not require internet or telecom connectivity to take effect.

RBI granted Scheduled Payment Bank Status to Airtel Payments Bank

Reserve Bank of India (RBI) granted a Scheduled Payment Bank status to Airtel Payments Bank by including it into the Second Schedule to the RBI Act, 1934. With this inclusion, it becomes the 4th payment bank to get this status. This status will help Airtel Payments Bank to explore new central and state government business opportunities, including participation in government-issued Request for Proposals (RFP), and primary auctions, along with participation in government-operated welfare schemes.

RBI Introduces Market Making Scheme to Promote PDs to Trade in RD Scheme                           

To provide liquidity in the secondary market, the Reserve Bank of India (RBI) has introduced the market-making scheme to promote retail participation in Government Securities (G-Secs) by providing prices/quotes to Retail Direct Gilt Account Holders (RDGAHs) enabling them to buy/sell securities under the RBI Retail Direct (RBI-RD) Scheme.

• Under the scheme, RBI allowed the Primary Dealers (PDs) to be present on the Negotiated Dealing System- Order Matching (NDS-OM) Platform (odd-lot and Request for Quotes (RFQ) segments) throughout market hours and respond to buy/sell requests from RDGAHs.

RBI Cancels Authorisation Certificates of Two Payment System Operators

Reserve Bank of India (RBI) cancelled the Certificate of Authorisation (CoA) of two Payment System Operators (PSOs) – Muthoot Vehicle & Asset Finance, and Eko India Financial Services for non- compliance with regulatory requirements.The CoA was cancelled by RBI on 31st December 2021, in the exercise of the powers conferred on it under the Payment and Settlement Systems Act, 2007.

RBI Releases Eligibility Criteria for Entities to Become ‘specified Users’ of CICs

Reserve Bank of India (RBI) released the eligibility criteria for entities to be categorised as ‘Specified User’ of Credit Information Companies (CICs). The eligible criteria are issued under clause (j) of Regulation 3 of the CICs (Amendment) Regulations, 2021.In November 2021, RBI notified CICs (Amendment) Regulations, 2021 to amend the CICs Regulations, 2006.

• A ‘specified user’ should be a company incorporated in India or a Statutory Corporation established in India.

RBI Increased Banks’ LCR maintenance on Funds Received from Non-Financial Small Business Customers to Rs 7.5 Crore

Reserve Bank of India (RBI) has increased the threshold limit for Banks to maintain the Liquidity Coverage Ratio (LCR) on deposits and other ‘extension of funds’ received from non-financial small business customers from Rs 5 crore to Rs 7.5 crore.

• Objective: To better align RBI’s guidelines with the Basel Committee on Banking Supervision (BCBS) standard and enable banks to manage liquidity risk more effectively.

RBI Sets up Separate Department for Fintech

In January 2022, the Reserve Bank of India (RBI) sets up a separate internal department for fintech (Financial technology) by subsuming the fintech division of DPSS (department of payment and settlement systems), Central Office (CO). to facilitate innovation, and help identify, address challenges and opportunities in the fintech sector.

• Ajay Kumar Choudhary, who was recently promoted as the Executive Director of RBI was appointed as head of the department.

The department will be administratively attached to the centralised administrative division (CAD) of RBI.

RBI extends its Directions for Sri Guru Raghavendra Sahakara Bank till May 10, 2022

Reserve Bank of India (RBI) has extended the validity of its directions by 4 months for Sri Guru Raghavendra Sahakara Bank Niyamitha, Bengaluru (Karnataka) i.e., till May 10, 2022 from January 11, 2022.The directions have been issued under Section 35A read with Section 56 of the Banking Regulation (BR) Act, 1949.

RBI brought the bank under Directions in the interest of depositor protection on January 2, 2020, the validity of which was extended from time to time.

RBI Releases Annual Report of Ombudsman Schemes, 2020-21; Complaints rose by 22.27% in 2021

Reserve Bank of India (RBI) released the Annual Report of the Ombudsman Schemes for 2020-21, which has been prepared for the 9-month period, i.e., July 1, 2020, to March 31, 2021, in alignment with the change in the Financial Year of RBI from ‘July – June’ to ‘April – March’ with effect from July 1, 2020.The Annual Report covers the activities under the Banking Ombudsman Scheme, 2006 (BOS), the Ombudsman Scheme for Non-Banking Financial Companies, 2018 (OSNBFC) and the Ombudsman Scheme for Digital Transactions, 2019 (OSDT).

RBI Released RBI-DPI for September 2021; Digital Payments Grew by 39.64%

Reserve Bank of India (RBI) released the RBI – Digital Payments Index (RBI-DPI) for September 2021, as per the index the digital payments increased by 39.64 percent to 304.06 as against 217.74 in September 2020. It is the index launched by RBI in January 2021 with March 2018 as the base period (ie. DPI score for March 2018 is set at 100) to identify the extent of digitisation of payments across the country. The index will be released semi-annually with a lag of 4 months.

It is the index launched by RBI in January 2021 with March 2018 as the base period (ie. DPI score for March 2018 is set at 100) to identify the extent of digitisation of payments across the country. The index will be released semi-annually with a lag of 4 months.

Existing NBFC-ICCs with asset size of Rs 1,000cr & above allowed undertaking Factoring Business: RBI

Reserve Bank of India (RBI) issued the following regulations after exercising its powers conferred under the Factoring Regulation Act, 2011.

• Registration of Factors (Reserve Bank) Regulations, 2022.
• Registration of Assignment of Receivables (Reserve Bank) Regulations, 2022.

It permits all existing non-deposit taking Non-Banking Finance Company-Investment and Credit Companies (NBFC-ICCs) with asset size of Rs 1,000 crore and above to undertake factoring business, subject to certain conditions.

RBI holds Overnight VRRR Auction as GST outflow from Banks tightens Liquidity

Reserve Bank of India (RBI) conducted an Overnight variable rate reverse repo (VRRR) auction for Rs 50,000 crore under liquidity adjustment facility (LAF) to infuse liquidity, instead of its usual fixed-rate overnight reverse repo window, as Goods and Services Tax (GST) collection tightened liquidity this week.

• This auction was to stabilize overnight Call Money Market (CMM) rates which have been hardening due to outflows from banks on account of GST payments.
• The weighted average call money rate also touched 4.3587% showing liquidity stress. This is the first VRRR auction since March 2021.

RBI conducts Overnight VRR auction of worth Rs. 75,000 crore

Reserve Bank of India (RBI) offered overnight liquidity to the banking system of India with Rs.75,000 crore against banks bid of around Rs 1.37 lakh crore through variable rate repo (VRR) auction under Liquidity Adjustment Facility (LAF) and 25th January 2022 will be the date of reversal.

• The auction will be conducted on Core Banking Solutions (CBS) (e-Kuber) platform with Rs.1 crore as minimum bid amount for the auction and the allotment would be in multiples of Rs.1 crore.

RBI Imposes Restrictions on Indian Mercantile Cooperative Bank

Reserve Bank of India imposed several restrictions on Indian Mercantile Cooperative Bank Limited, Lucknow, Uttar Pradesh including a cap of Rs 1 lakh on withdrawals.RBI issued the directions in the exercise of powers vested in it under sub section (1) of Section 35 A read with Section 56 of the Banking Regulation Act (As Applicable to Cooperative Societies), 1949.