FAQ Page 1 - ஆர்பிஐ

RbiAnnouncementWeb

FAQ DetailPage Breadcrumb

Search Bar

முடிவுகளை தேடுக

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

9. Does the Reserve Bank regulate all financial companies? +

No. Housing Finance Companies, Merchant Banking Companies, Stock Exchanges, Companies engaged in the business of stock-broking/sub-broking, Venture Capital Fund Companies, Nidhi Companies, Insurance companies and Chit Fund Companies are NBFCs but they have been exempted from the requirement of registration under Section 45-IA of the RBI Act, 1934 subject to certain conditions.

Housing Finance Companies are regulated by National Housing Bank, Merchant Banker/Venture Capital Fund Company/stock-exchanges/stock brokers/sub-brokers are regulated by Securities and Exchange Board of India, and Insurance companies are regulated by Insurance Regulatory and Development Authority. Similarly, Chit Fund Companies are regulated by the respective State Governments and Nidhi Companies are regulated by Ministry of Corporate Affairs, Government of India. Companies that do financial business but are regulated by other regulators are given specific exemption by the Reserve Bank from its regulatory requirements for avoiding duality of regulation.

It may also be mentioned that Mortgage Guarantee Companies have been notified as Non-Banking Financial Companies under Section 45 I(f)(iii) of the RBI Act, 1934. Core Investment Companies with asset size of less than ₹ 100 crore, and those with asset size of ₹ 100 crore and above but not accessing public funds are exempted from registration with the RBI.

FAQs on Master Directions on Priority Sector Lending Guidelines

I. Investment by Banks in securitized assets / Transfer of Assets through Direct Assignment/ Outright Purchase

Query 27: How should banks ensure due diligence to ascertain priority sector status of PTC portfolio ? +

Clarification: The bank may rely on a CA certificate by the originating entity certifying the PSL composition of the pool. Additionally, bank may conduct a sample check of say 10% of the pool for PSL eligibility. The additional check may be conducted by the bank through its own staff or by engaging a CA for this purpose.J. PSLCs

Government Securities Market in India – A Primer

10. What are the Do's and Don’ts prescribed by RBI for the Co-operative banks dealing in G-Secs? +

While undertaking transactions in securities, UCBs should adhere to the instructions issued by the RBI. The guidelines on transactions in G-Secs by the UCBs have been codified in the master circular DCBR. BPD (PCB).MC.No. 4/16.20.000/2015-16 dated July 1, 2015 which is updated from time to time. This circular can also be accessed from the RBI website under the Notifications – Master circulars section. The important guidelines to be kept in view by the UCBs relate to formulation of an investment policy duly approved by their Board of Directors, defining objectives of the policy, authorities and procedures to put through deals, dealings through brokers, preparing panel of brokers and review thereof at annual intervals, and adherence to the prudential ceilings fixed for transacting through each of the brokers, etc.

The important Do’s & Don’ts are summarized in the Box I below.

BOX I

Do’s & Don’ts for Dealing in G-Secs

Do’s

Segregate dealing and back-office functions. Officials deciding about purchase and sale transactions should be separate from those responsible for settlement and accounting.
Monitor all transactions to see that delivery takes place on settlement day. The funds account and investment account should be reconciled on the same day before close of business.
Keep a proper record of the SGL forms received/issued to facilitate counter-checking by their internal control systems/RBI inspectors/other auditors.
Seek a Scheduled Commercial Bank (SCB), a PD or a Financial Institution (FI) as counterparty for transactions.
Give preference for direct deals with counter parties.
Insist on Delivery versus Payment for all transactions.
Take advantage of the NCB facility for acquiring G-Secs in the primary auctions conducted by the RBI.
Restrict the role of the broker only to that of bringing the two parties to the deal together, if a deal is put through with the help of broker.
Have a list of approved brokers. Utilize only brokers registered with NSE or BSE or OTCEI for acting as intermediary.
Place a limit of 5% of total transactions (both purchases and sales) entered into by a bank during a year as the aggregate upper contract limit for each of the approved brokers. A disproportionate part of the business should not be transacted with or through one or a few brokers.
Maintain and transact in G-Secs only in dematerialized form in SGL Account or Gilt Account maintained with the CSGL Account holder.
Open and maintain Gilt account or dematerialized account
Open a funds account for securities transactions with the same Scheduled Commercial bank or the State Cooperative bank with whom the Gilt Account is maintained.
Ensure availability of clear funds in the designated funds accounts for purchases and sufficient securities in the Gilt Account for sales before putting through the transactions.
Observe prudential limits and abide by restrictions for investment in permitted non-SLR securities (Prudential limit : shall not exceed 10% of the total deposits of bank as on March 31 of the preceding financial year) ( Instruments : (i) “A” or equivalent and higher rated CPs, debentures and bonds, (ii) units of debt mutual funds and money market mutual funds, (iii) shares of market infrastructure companies eg. CCIL, NPCI, SWIFT).
The Board of Directors to peruse all investment transactions at least once a month

Don’ts

Do not undertake any purchase/sale transactions with broking firms or other intermediaries on principal to principal basis.
Do not use brokers in the settlement process at all, i.e., both funds settlement and delivery of securities should be done with the counter-parties directly.
Do not give power of attorney or any other authorisation under any circumstances to brokers/intermediaries to deal on your behalf in the money and securities markets.
Do not undertake G-Secs transaction in the physical form with any broker.
Do not routinely make investments in non-SLR securities (e.g., corporate bonds, etc) issued by companies or bodies.

Retail Direct Scheme

Account opening related queries

10. Can I change the email id or phone number linked with my Retail Direct Gilt (RDG) account later? +

Yes, you can change your registered mobile number and e-mail id on the Retail Direct portal.

Core Investment Companies

Core Investment Companies (CICs)

10. Is there an enabling provision for use of statutory accounts based on some date other than 31st March, such as December 31st? +

Ans: While such accounts could be taken into account in view of the fact that developments after balance sheet date are also taken into account, all NBFCs including CICs-ND-SI would mandatorily have to finalise their accounts as on March 31 of the year, and submit annual auditors certificate based on this figure.

Foreign Investment in India

Q.10: Whether any approval is required for an entity which has received foreign investment under automatic route and subsequently the sector was brought under approval route +

Answer: As long as the foreign shareholding in the entity remains the same and there is no corporate action pursuant to the sector being brought under approval route, approval is not required.

Biennial survey on Foreign Collaboration in Indian Industry (FCS)

Details of survey launch

Q10. If the company does not have FTC during the survey reference period, do they need to participate in the survey? +

Ans.: In case the company does not have any FTC during the survey reference period, then they have to submit the survey schedule of FCS survey by filling Part I and II of the form.

Domestic Deposits

I. Domestic Deposits

10. Whether banks can pay additional interest admissible to bank’s staff on the deposit placed in the name of minor child/ children of the deceased member of staff? +

No. Children (including minor) are not eligible for additional interest admissible to bank’s staff member/ retired staff member.

Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999

Eligible entities and requirements to submit the FLA return

Q10. If an entity has only share application money, then is that entity supposed to submit the FLA return? +

Ans: If an entity has received only share application money and does not have any foreign direct investment or overseas direct investment outstanding as on end-March of the latest FY, it is not required to fill the FLA return.

Remittances (Money Transfer Service Scheme (MTSS) and Rupee Drawing Arrangement (RDA))

Money Transfer Service Scheme (MTSS)

10. Who is an Indian Agent ? +

To become an Indian Agent, the applicant should be an Authorised Dealer Category-I bank or an Authorised Dealer Category-II or a Full Fledged Money Changer (FFMC) or the Department of Posts. Further, the Indian agents can also appoint sub-agents which can be retail outlets, commercial entities having a place of business, and whose bonafides are acceptable to the Indian Agent.