• The directions are applicable to all Payment System providers authorised / approved by the Reserve Bank of India (RBI) to set up and operate a payment system in India under the Payment and Settlement Systems Act, 2007.

• Banks function as operators of a payment system or as participant in a payment system. They are participants in (i) payment systems operated by RBI viz., RTGS and NEFT, (ii) systems operated by CCIL and NPCI, and (iii) in card schemes. The directions are, therefore, applicable to all banks operating in India.

• The directions are also applicable in respect of the transactions through system participants, service providers, intermediaries, payment gateways, third party vendors and other entities (by whatever name referred to) in the payments ecosystem, who are retained or engaged by the authorised / approved entities for providing payment services.

• The responsibility to ensure compliance with the provisions of these directions would be on the authorised / approved PSOs to ensure that such data is stored only in India as required under the above directions.

The NBFC Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against NBFCs for deficiency in certain services covered under the grounds of complaint specified under Clause 8 of the Scheme.

Participation in the Scheme of non-competitive bidding is open to retail investors. Retail investor is any person including individuals, firms, companies, corporate bodies, institutions, provident funds, trusts and any other entity as prescribed by RBI.

Ans RBI EFT is a Scheme introduced by Reserve Bank of India (RBI) to help banks offering their customers money transfer service from account to account of any bank branch to any other bank branch in places where EFT services are offered.

Commercial Banks : All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC.

Cooperative Banks : All State, Central and Primary cooperative banks, also called urban cooperative banks, functioning in States / Union Territories which have amended the local Cooperative Societies Act empowering the Reserve Bank of India (RBI) to order the Registrar of Cooperative Societies of the State / Union Territory to wind up a cooperative bank or to supersede its committee of management and requiring the Registrar not to take any action regarding winding up, amalgamation or reconstruction of a co-operative bank without prior sanction in writing from the RBI are covered under the Deposit Insurance Scheme. At present all co-operative banks are covered by the DICGC.

Primary cooperative societies are not insured by the DICGC.

Ans. The Asian Clearing Union (ACU) was established with its head-quarters at Tehran, Iran, on December 9, 1974 at the initiative of the United Nations Economic and Social Commission for Asia and Pacific (ESCAP), for promoting regional co-operation. The main objective of the clearing union is to facilitate payments among member countries for eligible transactions on a multilateral basis, thereby economizing on the use of foreign exchange reserves and transfer costs, as well as promoting trade among the participating countries.

Answer: ‘Remittance of assets' means remittance outside India of funds representing

a deposit with a bank or a firm or a company of:

1. provident fund balance
2. superannuation benefits
3. amount of claim or maturity proceeds of Insurance policy
4. sale proceeds of shares, securities, immovable property or any other asset held in India

In terms of Section 20 of the RBI Act 1934, RBI has the obligation to undertake the receipts and payments of the Central Government and to carry out the exchange, remittance and other banking operations, including the management of the public debt of the Union. Further, as per Section 21 of the said Act, RBI has the right to transact Government business of the Union in India.

State Government transactions are carried out by RBI in terms of the agreement entered into with the State Governments in terms of section 21 A of the Act. As of now, such agreements exist between RBI and all the State Governments except Government of Sikkim. Thus, the legal provisions vest Reserve Bank of India with both the right and obligation to function as banker to the government.

Truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point by the presenting bank en-route to the paying bank branch. In its place an electronic image of the cheque is transmitted to the paying branch through the clearing house, along with relevant information like data on the MICR band, date of presentation, presenting bank, etc. Cheque truncation thus obviates the need to move the physical instruments across bank branches, other than in exceptional circumstances for clearing purposes. This effectively eliminates the associated cost of movement of the physical cheques, reduces the time required for their collection and brings elegance to the entire activity of cheque processing.

ECS is an electronic mode of payment / receipt for transactions that are repetitive and periodic in nature. ECS is used by institutions for making bulk payment of amounts towards distribution of dividend, interest, salary, pension, etc., or for bulk collection of amounts towards telephone / electricity / water dues, cess / tax collections, loan instalment repayments, periodic investments in mutual funds, insurance premium etc. Essentially, ECS facilitates bulk transfer of monies from one bank account to many bank accounts or vice versa. ECS includes transactions processed under National Automated Clearing House (NACH) operated by National Payments Corporation of India (NPCI).

The Banking Ombudsman Scheme is an expeditious and inexpensive forum for bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995. Presently the Banking Ombudsman Scheme 2006 (As amended upto July 1, 2017) is in operation.

Participation in the Scheme of non-competitive bidding is open to individuals, HUFs, firms, companies, corporate bodies, institutions, provident funds, trusts and any other entity prescribed by RBI. As the focus is on the small investors lacking market expertise, the Scheme will be open to those whodo not have current account (CA) or Subsidiary General Ledger (SGL) account with the Reserve Bank of Indiado not require more than Rs.one crore (face value) of securities per auctionAs an exception, Regional Rural Banks (RRBs), Urban Cooperative Banks (UCBs) and Non-banking Financial Companies (NBFCs) can also apply under this Scheme in view of their statutory obligations. However, the restriction in regarding the maximum amount of Rs. one crore per auction per investor will remain applicable.

Banks cannot accept interest free deposits other than in current account.

Answer: A ‘Non-resident Indian’ (NRI) is a person resident outside India who is a citizen of India.

Reserve Bank, currently, issues authorisation under Section 10(1) of the Foreign Exchange Management Act, 1999, to

• select banks (as Authorised Dealers Category-I) to carry out all permissible current and capital account transactions as per directions issued from time-to-time

• select entities (as Authorised Dealers Category-II) to carry out specified non-trade related current account transactions, all the activities permitted to Full Fledged Money Changers and any other activity as decided by the Reserve Bank

• select financial and other institutions (as Authorised Dealers Category-III) to carry out specific foreign exchange transactions incidental to their business / activities

• select registered companies as Full Fledged Money Changers (FFMC) to undertake purchase of foreign exchange and sale of foreign exchange for specificied purposes viz. private and business travel abroad.

Ans. An Authorised Dealer (AD) is any person specifically authorized by the Reserve Bank under Section 10(1) of FEMA, 1999, to deal in foreign exchange or foreign securities (the list of ADs is available on www.rbi.org.in) and normally includes banks.

Exporters whose export earnings are Rs.10 lakhs or more during each of the preceding two years, or where the payment is to be made out of funds held in RFC or EEFC account of the remitter, are permitted by authorised dealers to make remittance for advertisement on foreign television, in terms of Foreign Exchange Management (Current Account Transactions) Rules, 2000 made by Government of India, vide Notification G.S.R.381(E) dated May 3, 2000. All other cases need to be referred by the authorised dealer to the Reserve Bank of India, for prior approval, before effecting any remittance.

No. With the introduction of Foreign Exchange Management Act, 1999, the accounts opened by foreign nationals who are resident in India are treated as resident accounts. Such accounts are at par with other resident Rupee accounts.

Yes, foreign tourists during their short visit to India can open a Non-Resident (Ordinary) Rupee (NRO) account with any bank dealing in foreign exchange .

Cheques denominated in currencies other than Indian Rupees such as Euro (€), Pound Sterling (£), US Dollar ($), Yen (¥), etc., are called foreign currency cheques. Foreign currency cheques include demand drafts, personal cheques, banker’s cheques, cashier’s cheques, traveller’s cheques, etc. Since such cheques are not payable in India they are, therefore, required to be sent to the country concerned for realization of proceeds.

Response

All the existing ‘No-frills’ accounts opened pursuant to guidelines issued vide circular RPCD.RF.BC.54/07.38.01/2005-06 dated December 13, 2005 and RPCD.CO.No.RRB.BC.58/ 03.05.33(F) / 2005-06 dated December 27, 2005 and converted into BSBDA in compliance with the guidelines issued in circular RPCD.CO.RRB.RCB.BC.No.24/07.38.01/2012-13 dated August 22, 2012 as well as fresh accounts opened under the said circular should be treated as BSBDA. Accounts enjoying additional facilities under the reasonable pricing structure for value added services, exclusively for BSBDA customers should not be treated as BSBDAs.

Ans: For the purposes of para 4(iv) of the Directions, the term ’person’ shall include an individual, a body of individuals, a HUF, a firm, a society or any artificial body, whether incorporated or not.

The ATS is an Application Tracking System, hosted on the public website of the Reserve Bank of India (RBI), which has been developed for members of the public to submit any individual application to RBI and keep track of the status of its disposal thereafter.

NDS-OM is a screen based electronic anonymous order matching system for secondary market trading in Government securities owned by RBI. Presently the membership of the system is open to entities like Banks, Primary Dealers, Insurance Companies, Mutual Funds etc. i.e entities who maintain SGL accounts with RBI. These are Primary Members (PM) of  NDS and are permitted by RBI to become members of NDS-OM. Gilt Account Holders which have gilt account with the PMs are permitted to have indirect access to the NDS-OM system i.e they can request their Primary Members to place orders on their behalf on the NDS-OM system.

Ans “Infrastructure loan” means a credit facility extended by NBFCs to a borrower for exposure in the following infrastructure sub-sectors:

Sl.No.	Category	Infrastructure sub-sectors
1.	Transport	i. Roads and bridges ii. Ports iii. Inland Waterways iv. Airport v. Railway Track, tunnels, viaducts, bridges1 vi. Urban Public Transport (except rolling stock in case of urban road transport)
2.	Energy	i. Electricity Generation ii. Electricity Transmission iii. Electricity Distribution iv. Oil pipelines v. Oil/Gas/Liquefied Natural Gas (LNG) storage facility2 vi. Gas pipelines3
3.	Water & Sanitation	i. Solid Waste Management ii. Water supply pipelines iii. Water treatment plants iv. Sewage collection, treatment and disposal system v. Irrigation (dams, channels, embankments etc) vi. Storm Water Drainage System
4.	Communication	i. Telecommunication (Fixed network) 4 ii. Telecommunication towers
5.	Social and Commercial Infrastructure	i. Education Institutions (capital stock) ii. Hospitals (capital stock)5 iii. Three-star or higher category classified hotels located outside cities with population of more than 1 million iv. Common infrastructure for industrial parks, SEZ, tourism facilities and agriculture markets v. Fertilizer (Capital investment) vi. Post harvest storage infrastructure for agriculture and horticultural produce including cold storage vii. Terminal markets viii. Soil-testing laboratories ix. Cold Chain6

Notes:

1. Includes supporting terminal infrastructure such as loading/unloading terminals, stations and buildings

2. Includes strategic storage of crude oil

3. Includes city gas distribution network

4. Includes optic fibre/cable networks which provide broadband / internet

5. Includes Medical Colleges, Para Medical Training Institutes and Diagnostics Centres

6. Includes cold room facility for farm level pre-cooling, for preservation or storage of agriculture and allied produce, marine products and meat.

Ans : IDFs are investment vehicles which can be sponsored by commercial banks and NBFCs in India in which domestic/offshore institutional investors, specially insurance and pension funds can invest through units and bonds issued by the IDFs. IDFs would essentially act as vehicles for refinancing existing debt of infrastructure companies, thereby creating fresh headroom for banks to lend to fresh infrastructure projects. IDF-NBFCs would take over loans extended to infrastructure projects which are created through the Public Private Partnership (PPP) route and have successfully completed one year of commercial production. Such take-over of loans from banks would be covered by a Tripartite Agreement between the IDF, Concessionaire and the Project Authority for ensuring a compulsory buyout with termination payment in the event of default in repayment by the Concessionaire.

Sec 2(v) of the Foreign Exchange Management Act, 1999 (FEMA) defines a person resident in India as:

(i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include-

(A) a person who has gone out of India or who stays outside India, in either case-

for or on taking up employment outside India, or

for carrying on outside India a business or vocation outside India, or

for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;

(B) a person who has come to or stays in India, in either case, otherwise than-

for or on taking up employment in India, or

for carrying on in India a business or vocation in India, or

for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;

(ii) any person or body corporate registered or incorporated in India,

(iii) an office, branch or agency in India owned or controlled by a person resident outside India,

(iv) an office, branch or agency outside India owned or controlled by a person resident in India;

Local Cheques

Local cheques are payable within the jurisdiction of the clearing house and will be presented through the clearing system prevailing at the centre. Credit arising out of local cheques shall be given to the customer’s account as indicated in the Cheque Collection Policy (CCP) of the concerned collecting bank.

Notwithstanding to the CCP of concerned collecting bank, ideally, in respect of local clearing, banks shall permit usage of the shadow credit afforded to the customers’ accounts immediately after closure of the relative return clearing on the next working day or maximum within an hour of commencement of business on the third working day from the day of presentation in clearing, subject to usual safeguards.

Under grid-based Cheque Truncation System (CTS) clearing, all cheques drawn on bank branches falling within in the grid jurisdiction are treated and cleared as local cheques. The grid clearing allows banks to present / receive cheques to/ from multiple cities to a single clearing house through their service branches in the grid location.

If there is any delay in credit, beyond the period specified above, customer is entitled to receive compensation at the rate specified in the CCP of the concerned collecting bank. In case, no rate is specified in the CCP for delay in realisation of local cheques, compensation at savings bank interest rate has to be paid for the corresponding period of delay.

Outstation Cheques

Maximum timeframe for collection of cheques drawn on state capitals / major cities / other locations are 7/10/14 days respectively.

If there is any delay in collection beyond this period, customer is entitled to receive compensation at the rate specified in the CCP of the concerned bank. In case the rate is not specified in the CCP, interest rate on Fixed Deposits for the corresponding maturity to be paid. Banks' cheque collection policy also indicates the limit up to which outstation cheques are given immediate / instant credit.

Government security (G-Sec) means a security created and issued by the Government for the purpose of raising a public loan or any other purpose as notified by the Government in the Official Gazette and having one of the following forms.

1. a Government Promissory Note (GPN) payable to or to the order of a certain person; or

2. a bearer bond payable to a bearer; or

3. a stock; or

4. a bond held in a Bond Ledger Account (BLA).

In several of its functions, Reserve Bank of India relies on data submitted by banks and quality of data is of great importance. In order to meet the need for correct and consistent data, the Reserve Bank of India has initiated the project on Automated Data Flow (ADF).

It is not necessary that individual alongwith his related parties have shareholding in the NOFHC. However, if any individual belonging to the Promoter Group chooses to become a promoter of the NOFHC, he along with his relatives (as defined in Section 6 of the Companies Act 1956) and along with entities in which he and / or his relatives hold not less than 50 per cent of the voting equity shares can hold voting equity shares not exceeding 10 per cent of the total voting equity shares of the NOFHC. [para 2 ( C ) (ii) (a) of the guidelines]

• The CIBs issued in 1997 provided inflation protection only to principal and not to interest payment.

• New product of IIBs will provide inflation protection to both principal and interest payments.

In terms of Government of India Gazette Notification S.O. 2119 (E) dated June 26, 2020 the definition of micro, small and medium enterprises is as under:

(i) A micro enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹1 crore and turnover does not exceed ₹5 crore;

(ii) A small enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹10 crore and turnover does not exceed ₹50 crore; and

(iii) A medium enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹50 crore and turnover does not exceed ₹250 crore.

All enterprises are required to register online on Udyam Registration Portal and obtain ‘Udyam Registration Certificate’. (Refer circulars FIDD.MSME & NFS.BC.No.3/06.02.31/2020-21 dated July 2, 2020, FIDD.MSME & NFS. BC. No.4/06.02.31/2020-21 dated August 21, 2020 FIDD.MSME & NFS.BC.No.13/06.02.31/2021-22 dated July 07, 2021)

Direct investment outside India means investment by way of contribution to the capital or subscription to the Memorandum of Association of a foreign entity but does not include portfolio investment.

Authorised dealers can release foreign exchange up to US$25,000 for a business trip to any country other than Nepal and Bhutan. Release of foreign exchange exceeding US$25,000 for a travel abroad (other than Nepal and Bhutan) for business purposes, irrespective of period of stay, requires prior permission from Reserve Bank. Visits in connection with attending of an international conference, seminar, specialised training, study tour, apprentice training, etc., are treated as business visits. Visit abroad for medical treatment and/or check up also falls within this category.

In terms of Section 2(v) of FEMA, 1999, a "person resident in India" means – a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include – (A) a person who has gone out of India or who stays outside India, in either case - for or on taking up employment outside India, or for carrying on outside India a business or vocation outside India, or for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period; (B) a person who has come to or stays in India, in either case, otherwise than – for or on taking up employment in India, or for carrying on in India a business or vocation in India, or for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period; any person or body corporate registered or incorporated in India, an office, branch or agency in India owned or controlled by a person resident outside India, an office, branch or agency outside India owned or controlled by a person resident in India;

Exchange Earners' Foreign Currency Account (EEFC) is an account maintained in foreign currency with an Authorised Dealer Category - I bank i.e. a bank authorized to deal in foreign exchange. It is a facility provided to the foreign exchange earners, including exporters, to credit 100 per cent of their foreign exchange earnings to the account, so that the account holders do not have to convert foreign exchange into Rupees and vice versa, thereby minimizing the transaction costs.

നവംബർ 11, 2005 തീയതിയിലെ സർക്കുലർ DBOD. No. Leg. BC. 44/09.07.005/2005-06 ലെ മാർഗ്ഗനിർദ്ദേശങ്ങൾ പ്രകാരം തുറന്നതും ഓഗസ്റ്റ് 10, 2012 തീയതിയിലെ DBOD.No.Leg.BC.35/09.07.005/20012-13 സർക്കുലറിലെ നിര്‍ദ്ദേശങ്ങല്‍ പാലിച്ച് ബിഎസ്ബിഡിഎയിലേക്ക് പരിവർത്തനം ചെയ്തതുമായ നിലവിലുള്ള എല്ലാ ‘നോ-ഫ്രിൽസ്’ അക്കൗണ്ടുകളും മേൽപ്പറഞ്ഞ സർക്കുലറിന് കീഴിൽ പുതുതായി തുറന്ന അക്കൗണ്ടുകളും ബി‌എസ്‌ബി‌ഡി‌എയായി കണക്കാക്കണം. അധിക സൗകര്യങ്ങൾ ന്യായമായ വിലനിർണ്ണയ ഘടനയിൽ മൂല്യവർദ്ധിത സേവനങ്ങളായി ആസ്വദിക്കുന്ന അക്കൗണ്ടുകളെ ബിഎസ്ബിഡിഎകളായി കണക്കാക്കുവാന്‍ പാടില്ല.

Ans: National Electronic Funds Transfer (NEFT) is a nation-wide centralised payment system owned and operated by the Reserve Bank of India (RBI). The set of procedures to be followed by various stakeholders participating in the system is available on the RBI website under the following link: /en/web/rbi/-/national-electronic-funds-transfer-system-procedural-guidelines-2346

Let’s assume a bank has following maturity profile of borrowings:

Sr. No.	Original Maturity	Balance outstanding as a percentage of total funds (other than equity)	Cumulative weightage
1	5 years & above	15.1%	15.1%
2	3 years & above but less than 5 years	11.8%	26.9%
3	2 years & above but less than 3 years	9.3%	36.2%
4	1 year & above but less than 2 years	16.9%	53.1%
5	6 months & above but less than 1 year	24.3%	77.4%
6	91 days & above but less than 6 months	10.5%	87.9%
7	Up to 90 days	12.1%	100%
	Total	100%

In this case, the MCLR shall correspond to the weighted average of tenor of the first three time buckets.

ഉത്തരം. ഒരു കമ്പ്യൂട്ടർവത്കൃത യന്ത്രമാണ് എടിഎം, അത് ബാങ്കുകളുടെ ബ്രാഞ്ച് സന്ദർശിക്കാതെ തന്നെ ഉപഭോക്താക്കൾക്ക് പണം വിതരണം ചെയ്യുന്നതിനും മറ്റ് സാമ്പത്തിക, സാമ്പത്തികേതര ഇടപാടുകൾ നടത്തുന്നതിനും സൗകര്യമൊരുക്കുന്നു.

ഉത്തരം. ആർ.‌ടി‌.ജി‌.എസ്' എന്ന ചുരുക്കെഴുത്ത് റിയൽ ടൈം ഗ്രോസ് സെറ്റിൽമെന്‍റിനെ സൂചിപ്പിക്കുന്നു, ഇത് ഫണ്ട് കൈമാറ്റങ്ങളുടെ നിരന്തരവും തത്സമയവുമായ സെറ്റിൽമെന്‍റ് നടത്തുന്ന ഒരു സംവിധാനമായി വിശദീകരിക്കാം, വ്യക്തിഗതമായി ഇടപാട് അടിസ്ഥാനത്തിൽ (നെറ്റിംഗ് ഇല്ലാതെ). 'റിയൽ ടൈം' എന്നാൽ നിർദ്ദേശങ്ങൾ അവ ലഭിക്കുന്ന സമയത്ത് പ്രോസസ്സ് ചെയ്യുക എന്നാണ്; 'ഗ്രോസ്സ് സെറ്റിൽമെന്‍റ്' എന്നതിനർത്ഥം ഫണ്ട് ട്രാൻസ്ഫർ നിർദ്ദേശങ്ങളുടെ സെറ്റിൽമെന്‍റ് പ്രത്യേകം പ്രത്യേകമായി സംഭവിക്കുന്നു എന്നാണ്.

ഉത്തരം. പി‌എസ്‌എസ് ആക്റ്റ്, 2007 ലെ സെക്ഷൻ 10 (2) ഒപ്പം സെക്ഷൻ 18 പ്രകാരം നൽകിയിട്ടുള്ള അധികാരങ്ങൾ വിനിയോഗിച്ചു കൊണ്ട് ആർ‌ബി‌ഐ ഈ നിർദ്ദേശങ്ങൾ പുറപ്പെടുവിച്ചിരിക്കുന്നു.

Ans. Contravention is a breach of the provisions of the Foreign Exchange Management Act (FEMA), 1999 and rules/ regulations/ notification/ orders/ directions/ circulars issued there under. Compounding refers to the process of voluntarily admitting the contravention, pleading guilty and seeking redressal. The Reserve Bank is empowered to compound any contravention as defined under section 13 of FEMA, 1999 except the contravention under section 3(a)¹ ibid, for a specified sum after offering an opportunity of personal hearing to the contravener. It is a voluntary process in which an individual or a corporate seeks compounding of an admitted contravention. It provides comfort to any person who contravenes any provisions of FEMA, 1999 by minimizing transaction costs. Willful, malafide and fraudulent transactions are, however, viewed seriously, which will not be compounded by the Reserve Bank. Further, in terms of the proviso to rule 8 (2) of Foreign Exchange (Compounding Proceedings) Rules, 2000, inserted vide GOI notification dated February 20, 2017, if the Directorate of Enforcement (DoE) is of the view that the compounding proceeding relates to a serious contravention suspected of money laundering, terror financing or affecting sovereignty and integrity of the nation, such cases will not be compounded by the Reserve Bank. Also, the cases attracting the special provisions under section 37(A) of the FEMA, 1999 - relating to assets held outside India in contravention of section 4, shall not be eligible for compounding by the Reserve Bank.

Ans: Yes. The banks will have to maintain amount of specified securities for the amount received in TLTRO in its HTM book at all times till maturity of TLTRO.

The stipulation at Paragraph 4 of the Annex to the Resolution Framework is a general clause regarding the date on which the eligibility criteria for resolution under the Resolution Framework may be assessed. The specific application of the reference date with respect to deciding the eligibility of accounts for resolution under Part A and Part B of the Annex to the Resolution Framework have been separately specified in Paragraphs 6 and 13 respectively, i.e, the requirement that the borrowers should be classified as standard, but not in default for more than 30 days with any lending institution as on March 1, 2020. The actual debt that may be considered for resolution will be the outstanding as on the date of invocation.

1. Fintech Ans

Ans: The Indo-Nepal Remittance Facility (INRF, Scheme) is a cross-border remittance scheme to transfer funds from India to Nepal (one-way only), enabled under the NEFT ecosystem. The scheme was launched by the Reserve Bank of India (RBI) in May 2008 to provide a safe and cost-efficient avenue to migrant Nepalese workers in India to remit money back to their families in Nepal.

In August 2021, the Scheme was enhanced to boost the trade payments between the two countries, and to facilitate payments relating to retirement, pension, etc., to our ex-servicemen who have settled / relocated in Nepal.

The ₹2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934 primarily with the objective to meet the currency requirement of the economy in an expeditious manner after withdrawal of the legal tender status of all ₹500 and ₹1000 banknotes in circulation at that time. With fulfilment of that objective and availability of banknotes in other denominations in adequate quantities, printing of ₹2000 banknotes was stopped in 2018-19. A majority of the ₹2000 denomination notes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continue to be adequate to meet the currency requirement of the public.

In view of the above, and in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the ₹2000 denomination banknotes from circulation.

The incidence of fake Indian currency notes in higher denomination has increased. For ordinary persons, the fake notes look similar to genuine notes, even though no security feature has been copied. The fake notes are used for antinational and illegal activities. High denomination notes have been misused by terrorists and for hoarding black money. India remains a cash based economy hence the circulation of Fake Indian Currency Notes continues to be a menace. In order to contain the rising incidence of fake notes and black money, the scheme to withdraw legal tender character of the old Bank Notes in the denominations of ₹ 500 and ₹ 1000 was introduced.