Welcome to the refurbished site of the Reserve Bank of India.
The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge.
With this makeover, we also take a small step into social media. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy.
The site can be accessed through most browsers and devices; it also meets accessibility standards.
Please save the url of the refurbished site in your favourites as we will give up the existing site shortly and register or re-register yourselves for receiving RSS feeds for uninterrupted alerts from the Reserve Bank.
Do feel free to give us your feedback by clicking on the feedback button on the right hand corner of the refurbished site.
China’s central bank has asked major lenders, including the foreign ones, to curtail loan growth for the rest of this year after a surge in the first two months stoked bubble risks.
At a meeting with the People’s Bank of China, banks were told to keep new advances in 2021 at roughly the same level as last year. Some foreign banks were also urged to rein in additional lending through so-called window guidance recently after ramping up their balance sheets in 2020.
China, which keeps tight control over money flows in and out of the country, may be worried that a surge of funds into the country could lead to nasty surprises like inflation.
“On the one hand, there will be a slowdown in loan growth, and on the other hand, the slowdown is quite moderate,” said Lu Ting, chief China economist at Nomura Holdings Inc., adding that the pace is in line with the PBOC’s stance of making no sharp policy turns.
With the coronavirus largely contained and the economy rebounding, Chinese policymakers have renewed a campaign to curb risks, especially in the financial and real estate sectors. Even if credit growth eases, the prospect of higher interest rates and fewer soured assets may boost the profitability of banks, which saw earnings slump after they were enlisted to help borrowers obtain cheap financing during the pandemic.
Foreign banks
Chinese rules have sharply limited the ability of foreign banks to do business in the country, making them less competitive against local rivals. Rules enacted in December and January restricts how much money foreign banks can transfer into China from overseas. Those enacted last month required many foreign banks to make fewer loans and sell off bonds and other investments.
The new rules have caused a stir among the global bank executives and foreign companies in China that depend on those lenders for money. They worry that the rules could make foreign-owned businesses more dependent on China’s state-run banking system for the money they need to grow. That dependence could give Beijing another potential pressure point to use as it squares off against the US and others over trade, human rights, geopolitics and other sticky issues.
Record credit, inflows
In 2020, banks doled out a record 19.6 trillion yuan ($3 trillion) of credit. Lending the same amount this year would bring the outstanding balance to about 192 trillion yuan.
Foreign investors last year increased their holdings of Chinese bonds by about $150 billion. China also surpassed the US last year by taking in $163 billion worth of direct investments in factories, office buildings, companies and other assets.
China’s currency, the renminbi, rose sharply in value against the U.S. dollar in the second half of last year. In May, $1 was worth about 7.15 renminbi. By year’s end, $1 bought about 6.5 renminbi.
NEW DELHI: IDFC First Bank has raised Rs 3,000 crore through QIP in which global marquee investors like BNP Paribas and Baillie Gifford participated alongside domestic players such as Bajaj Allianz Life and HDFC Life.
“On April 6, 2021, the bank has raised Rs 3,000 crore through Qualified Institutional Placement to marquee international and domestic investors by issuing 52.31 crore fresh equity shares having face value of Rs 10 each, at a price of Rs 57.35 per share,” IDFC First Bank said in a regulatory filing on Wednesday.
Out of this, 68.33 per cent of the allotment was made to foreign investors and 31.67 per cent to domestic investors.
Pursuant to the allotment of equity shares in the issue, the paid-up equity share capital of the bank stands increased from Rs 5,675.85 crore to Rs 6,198.95 crore, it said.
As many as eight investors subscribed to more than 5 per cent of the shares offered in the QIP.
These are: Bajaj Allianz Life Insurance 11.98 per cent, Baillie Gifford Emerging Markets Equities Fund 11.39 per cent, Baillie Gifford Pacific Fund (a sub fund of Baillie Gifford Overseas Growth Fund) 8.95 per cent, and BNP Paribas Arbitrage-ODI received 8.62 per cent of the shares in the issue.
City of New York Group Trust was allotted 8.53 per cent shares under the QIP, Baillie Gifford Emerging Markets Growth Fund 6.79 per cent, HDFC Life Insurance 6.67 per cent and Tata AIA Life Insurance 5.83 per cent.
The private sector bank also released some provisional data, witnessing over 10 per cent yearly growth in its total funded assets at Rs 1,17,803 crore as of March 31, 2021 from Rs 1,07,004 crore a year ago.
Total consumer deposits grew by 43.15 per cent year-on-year to Rs 82,628 crore from Rs 57,719 crore for the period.
Bank’s CASA deposits (current account and savings account) jumped by 122.74 per cent to Rs 46,022 crore from Rs 20,661 crore by March 2020. The CASA ratio stood at 51.95 per cent by end of March 2021, up from 31.87 per cent by year ago same period.
However, the top 20 depositors’ concentration witnessed a decline at 7.76 per cent against 20.26 per cent.
IDFC First Bank said these figures are being released under Sebi norms on disclosure requirements. The figures mentioned as on March 31, 2021 are provisional and subject to audit undertaken by the statutory auditors of the bank, it added.
MUMBAI: The RBI on Wednesday asked banks and NBFCs to immediately put in place a board-approved policy to refund/adjust the ‘interest on interest’ charged to the borrowers during the six-month moratorium, in conformity with the Supreme Court judgement last month.
As part of the Covid-19 regulatory package, the RBI had allowed lending institutions to grant a moratorium on payment of instalments of term loans falling due between March 1 and May 31 of last year. The moratorium was extended by three months till August 31.
Referring to the judgement of Supreme Court dated March 23, 2021, the RBI in a circular on Wednesday said: “All lending institutions shall immediately put in place a Board-approved policy to refund/adjust the ‘interest on interest’ charged to the borrowers during the moratorium period, i.e. March 1, 2020 to August 31, 2020…”
The apex court had directed that no compound or penal interest will be charged for the six-month moratorium announced last year amid the Covid-19 pandemic and the amount already recovered is to be refunded or adjusted in the next instalment of the loan account.
The RBI further said in order to ensure that the judgement is implemented uniformly in letter and spirit, methodology for calculation of the amount to be refunded/adjusted for different facilities should be finalised by the Indian Banks Association (IBA) in consultation with other industry participants/bodies, which “shall be adopted by all lending institutions”.
The “reliefs shall be applicable to all borrowers, including those who had availed of working capital facilities during the moratorium period, irrespective of whether moratorium had been fully or partially availed, or not availed” said the circular on ‘Asset Classification and Income Recognition following the expiry of Covid-19 regulatory package’.
The central bank also said lending institutions should disclose the aggregate amount to be refunded/ adjusted in respect of their borrowers based on the reliefs in their financial statements for the year ending March 31, 2021.
New Delhi: The government has appointed S Ramann as Chairman and Managing Director of Small Industries Development Bank of India (SIDBI). The appointment is for a period of three years from the date of his assuming the charge or until further orders, a government statement said.
In December, Banks Board Bureau, the headhunter for state-owned banks and financial institutions, had recommended his name for the post.
Ramann, a 1991-batch Indian Audit & Accounts Service officer, is currently the CEO of National E-Governance Services Ltd, India’s first Information Utility.
Are you a businessman having a turnover of more than 2 crores for FY 2019-20? If yes then here are the takeaways for filing GST Annual Return. Taxpayers who have an annual turnover of more than 2 crores in a year have to fill GSTR 9C form along with reconciliation statements and certification of audit in every financial year.
GSTR 9C form is an annual audit form and “audit under GST” includes inspection of records, returns and other related documents that are maintained by a person registered under GST Act. This entire mechanism is followed to ensure that correct information is disclosed with respect to turnover, input tax credit availed, taxes paid, refund claimed and assessment of the other related compliances as per GST Act that is to be verified by an authorization expert.
The GST regime is considered a trust-based taxation mechanism wherein a taxpayer has to undertake a self-assessment of his tax liability, file returns. and pay taxes. However, apparently, it seems that all taxpayers are honest. But this is not true and consequently, a “robust audit mechanism” is necessary to implement. A variety of steps are required to be taken by the government for apt implementation of the GST regime and audit is one amongst many of these measures.
Having said that, The Union Finance Minister Nirmala Sitharaman in Budget 2021 has proposed to delete the requirement of giving the GSTR audit report in the form GSTR-9C.
In consequence, this time, the Financial Year 2019-20 is the last year of GST Audit. And an individual ought to rectify all the mistakes that have been done in previous years
1. Compare GSTR-3B with GSTR-1 before the filing of GSTR-9
It is crucial for every taxpayer to “compare GSTR-3B with GSTR-1” for ensuring that there is the “absence of gaps or variations”. The existence of “Gaps or Variations” would, in turn, lead to
1. Unwanted issues/problems
2. the issuance of demand notices from tax authorities
Aforesaid issues would ultimately delay/obstruct “the precise filing of the annual returns”.
2. Payment of Tax in Cash as per “Reverse-Charge Basis”.
In section 49(4) of the CGST Act 2017, “Input Tax Credit” (ITC) can be utilized for payment of output tax only. Consequently, under Reverse Charge Basis (RCM), Tax has to be paid in cash only and benefits of ITC cannot be availed. And so, the supplier must refer in his/her tax invoice whether the tax paid is a reverse charge or not..
3. Interest charged in case of Untimely/Late Payment of GST
It is the duty of the taxpayer to pay GST timely. In case of late payment of GST, interest shall have to be paid. Moreover, instructions in notices issued by tax authorities have to be strictly adhered to. And if excess ITC is claimed, the rate of interest to be paid shall be 24% on the “tax amount” that is in excess.
4. Reversal of Input Tax Credit
The Government has inserted section 16(2) and Rule 37 in the aforesaid GST law. As per section 16(2) and Rule 37, non-payment of consideration within 180 days shall lead to the reversal of ITC.
5. E-way Bill
In case of transportation of goods from one place to another, the transporter should possess an e-way bill that must tally with the invoices issued.
6. “GST Audit Turnover” in tune with “Income Tax Turnover”
As per the latest update, both the departments – Department of Income Tax and Department of GST- shall exchange relevant information with each other. Consequently, an individual needs to be careful while reporting turnover under Income Tax and GST.
7. GSTIN wise Audit
In case the PAN-based aggregate turnover exceeds Rs 2 crores, every registered GSTIN (having the same PAN) shall have to
1. Fill GSTR-9C and
2. His accounts shall be audited
If both the branches possess the same GSTIN, then for determining the threshold limit, the stock transfers shall not be included in aggregate turnover. And
If both the branches have different GSTIN, then for determining the threshold limit, the stock transfers shall be included in aggregate turnover.
8. Categorisation of ITC that is availed
The ITC should have to be categorised under 2 headings: Purchases and different types of expenses like Capital goods, Bank charges, freight and so on.
9. Stock Transfer
The amount of stock that is disclosed in the books of accounts and the GST annual return should be the same. However, Stock transfer outside the boundary of the state is assumed as supply under GST.
10. Checking Inwards Supply and Outwards Supply
It is necessary for the taxpayer to assure that the apt rate is levied on both the Inwards Supply and Outwards Supply in addition to considering exempted supply.
The author Amit Gupta, is MD of SAG Infotech
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The allowing of cash withdrawals from all PPIs, in conjunction with the mandate for interoperability, will boost migration to full-KYC PPIs and would also complement the acceptance infrastructure in Tier-III to -VI centres, the RBI said.
The Reserve Bank of India (RBI) on Wednesday announced its decision to make interoperability mandatory for all full-KYC prepaid payment instruments (PPIs) and other payment infrastructure. The regulator simultaneously announced an increase in the permitted outstanding balance in PPIs to Rs 2 lakh from Rs 1 lakh and allowed cash withdrawals from full-KYC non-bank wallets. The regulations effectively bring wallets at par with bank accounts in terms of service offerings.
RBI governor Shaktikanta Das expressed displeasure with the lack of effort on the part of industry players to voluntarily move towards interoperability. The central bank had issued guidelines in October 2018 for adoption of interoperability on a voluntary basis for full-KYC PPIs. As the migration towards interoperability has not been significant, Das said, it will now be mandatory for full-KYC PPIs and for all payment acceptance infrastructure.
At present, cash withdrawal is allowed only for full-KYC PPIs issued by banks. The allowing of cash withdrawals from all PPIs, in conjunction with the mandate for interoperability, will boost migration to full-KYC PPIs and would also complement the acceptance infrastructure in Tier-III to -VI centres, the RBI said. In addition, the RBI-operated centralised payment systems (CPSs) – RTGS and NEFT — will be opened up to non-bank payment system operators like PPI issuers, card networks, white label ATM operators and trade receivables discounting system (TReDS) platforms. The measure is aimed at minimising settlement risk.
Responding to a query about data breaches at non-bank PPIs and the role of the RBI’s supervisory architecture thereof, executive director T Rabi Sankar said the regulator’s objective would always be to protect the customer and make transactions as safe as possible. “To that extent, like we have issued to banks recently, we are looking at issuing guidelines that could lay down the basic minimum norms for cybersecurity and other security issues. As far as instances of such issues are concerned, we are seized of those matters and we are taking all the steps required to reduce the possibility of such events,” he said.
Manoj Chopra, VP & head – products and innovation, InfrasoftTech, said interoperability might help wallets claw back the space they had lost to banks and other players with the rise of Unified Payments Interface (UPI) and the new KYC requirements. “Cashbacks offered also did not help much. Interoperability will provide that much needed push for wallets and PPI providers,” Chopra said, adding that the transition would be fraught with risks. Customers will have to be more careful about digital frauds and wallet providers will have to beef up their technology infrastructure to be able to manage these risks.
As wallets become enabled with most transaction features available on bank accounts, they will be able to effectively compete for micro-savings from the under-banked segments, said Ketan Doshi, MD, PayPoint India.
The announcement from the regulator came at a time when the government has announced setting up an ARC and an asset management company (AMC) to help public sector banks (PSBs) dealing with bad loans.
The Reserve Bank of India will constitute a committee to review the working of asset reconstruction companies (ARCs) and help them realise their full potential, Governor Shaktikanta Das said on Wednesday. The central bank has proposed to constitute a panel to recommend suitable measures, enabling such entities to meet the growing requirements of the financial sector. The announcement from the regulator came at a time when the government has announced setting up an ARC and an asset management company (AMC) to help public sector banks (PSBs) dealing with bad loans. “ARCs play an important role in the resolution of stressed assets. Their potential, however, is yet to be fully realised,” Shaktikanta Das said.
Dinesh Khara, chairman, State Bank of India, said the idea of setting up a committee to review the working of ARCs could open up new vistas of faster resolution. Similarly, RK Bansal, managing director of Edelweiss ARC, said the committee by RBI would be beneficial as the ARC industry was never examined or considered for a fresh look. “The major issue is that what is the future, and business model for ARCs? Initially, it was a fee-based business model, slowly it is becoming fund-based business model,” Bansal said.
Sonam Chandwani, managing partner at KS Legal & Associates, said, “The move is especially important as the bad loans are expected to surge, and asset turnaround companies like ARCs will be in higher demand than ever before to revive companies and keep the economy afloat.”
Market participants are also expecting more clarity on ARC regulations from the regulator. Last year, the ARC association and lenders like SBI had sought clarifications from RBI on the involvement of these entities in resolution plans under the Insolvency and Bankruptcy Code (IBC). RBI had earlier rejected a resolution plan submitted by UV Asset Reconstruction (UVARC) for acquiring assets of Aircel, citing that the plan did not conform to securitisation and reconstruction of financial assets and enforcement of security interest (SARFAESI) Act guidelines.
With a view to increasing the focus of liquidity measures on revival of activity in specific sectors, the RBI has extended the targeted long-term repo operations (TLTRO) scheme by six months till September 30, 2021.
By Ankur Mishra
The Reserve Bank of India (RBI) on Wednesday announced a slew of measures to enhance the credit flow into the system. The measures include liquidity support of Rs 50,000 crore for fresh lending during FY22 to all India financial institutions (AIFIs) like Nabard, Sidbi, NHB and Exim Bank.
Apart from it, the regulator has enhanced the loan limit for individual farmers to Rs 75 lakh from Rs 50 lakh against pledge of agricultural produce. The RBI has also extended the priority sector lending (PSL) classification benefit for lending by banks to non-banking financial companies (NBFCs) by six months.
“This dispensation which was available from August 13, 2019, till March 31, 2021, is being further extended for another six months, up to September 30, 2021,” the RBI said. In August 2019, RBI had decided that the bank credit to registered NBFCs for on-lending will be considered as priority sector lending.
With a view to increasing the focus of liquidity measures on revival of activity in specific sectors, the RBI has extended the targeted long-term repo operations (TLTRO) scheme by six months till September 30, 2021.
Raj Kiran Rai G, chairman, Indian Banks’ Association and MD & CEO of Union Bank of India, said the extension of on-tap TLTRO scheme and additional funding to AIFIs would help in providing resources for the needy segments of the economy.
SS Mallikarjun Rao, MD and CEO of Punjab National Bank, said, “While the liquidity has been ensured via TLTRO in case the demand picks up, the opportunity of on lending through NBFCs, enhancement of loan limit against warehouse receipts, liquidity facility for AIFIs are all good moves to ensure continued availability of credit which aid faster economic recovery.”
Anil Gupta, vice president, financial sector ratings, ICRA, said extension of the PSL scheme is positive and will further improve credit flow to NBFCs and HFCs for lending to identified sectors. “NBFCs and HFCs have benefitted by accessing the fresh funding lines at competitive rates while enabling banks to meet their PSL requirements with better risk-return perspective,” Gupta said.
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