Month: April 2021

RBI/2021-22/18
DGBA.GBD.No.S26/42.01.029/2021-22

April 07, 2021

All Agency Banks

Madam/Dear Sir,

Reporting and Accounting of Central Government transactions of March 2021 – Change of date of closure

Please refer Circular DGBA.GBD.No.S-140/42.01.029/2020-21 dated March 18, 2021 where in the date of closure for reporting residual transactions of March 2021 was fixed as April 10, 2021.

2. On account of holidays on April 10 and 11, 2021 (second Saturday and Sunday respectively), Government of India has now decided that the date of closure of residual transactions for the month of March 2021 be fixed as April 12, 2021. All agency banks may take note of the change of date of closure and ensure that arrangements are put in place to report all the March 2021 residual transactions by 1400 hours of April 12, 2021.

3. All other instructions contained in Circular DGBA.GBD.No.S-140/42.01.029/2020-21 dated March 18, 2021 are operational and may be adhered to, taking into account closure date as April 12, 2021. To sum up, the nodal/Focal Point branches will be required to prepare separate set of scrolls, one pertaining to March 2021 residual transactions and another for April transactions during the first 12 days of April 2021. The Nodal/Focal Point branches should also ensure that the accounts for all transactions (revenues/tax collections/payments) up to March 31, 2021 are effected at the receiving branches in the accounts for financial year 2020-21 itself and are not mixed up with the transactions of April 2021. Also, while reporting transactions pertaining to March 2021 up to April 12, 2021, the transactions of April 2021 should not be mixed up with the residual transactions relating to March 2021.

4. Kindly issue necessary instructions in the matter to your branches concerned immediately.

Yours faithfully

(R. Kamalakannan)
Chief General Manager

RBI/2021-22/17
DOR.STR.REC.4/21.04.048/2021-22

April 7, 2021

All Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks)
All Primary (Urban) Co-operative Banks/State Co-operative Banks/ District Central Co-operative Banks
All All-India Financial Institutions
All Non-Banking Financial Companies (including Housing Finance Companies)

Madam / Dear Sir,

Asset Classification and Income Recognition following the expiry of Covid-19 regulatory package

The Hon’ble Supreme Court of India has pronounced its judgement in the matter of Small Scale Industrial Manufacturers Association vs UOI & Ors. and other connected matters on March 23, 2021. In this connection, it is advised hereunder:

I. Refund/adjustment of ‘interest on interest’

2. All lending institutions¹ 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 in conformity with the above judgement. In order to ensure that the above judgement is implemented uniformly in letter and spirit by all lending institutions, methodology for calculation of the amount to be refunded/adjusted for different facilities shall be finalised by the Indian Banks Association (IBA) in consultation with other industry participants/bodies, which shall be adopted by all lending institutions.

3. The above 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, in terms of the circulars DOR.No.BP.BC.47/21.04.048/2019-20 dated March 27, 2020 and DOR.No.BP.BC.71/21.04.048/2019-20 dated May 23, 2020 (“Covid-19 Regulatory Package”).

4. Lending institutions shall disclose the aggregate amount to be refunded/adjusted in respect of their borrowers based on the above reliefs in their financial statements for the year ending March 31, 2021.

II. Asset Classification

5. Asset classification of borrower accounts by all lending institutions following the above judgment shall continue to be governed by the extant instructions as clarified below.

1. In respect of accounts which were not granted any moratorium in terms of the Covid19 Regulatory Package, asset classification shall be as per the criteria laid out in the Master Circular – Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2015 or other relevant instructions as applicable to the specific category of lending institutions (IRAC Norms).

2. In respect of accounts which were granted moratorium in terms of the Covid19 Regulatory Package, the asset classification for the period from March 1, 2020 to August 31, 2020 shall be governed in terms of the circular DOR.No.BP.BC.63/21.04.048/2019-20 dated April 17, 2020, read with circular DOR.No.BP.BC.71/21.04.048/2019-20 dated May 23, 2020. For the period commencing September 1, 2020, asset classification for all such accounts shall be as per the applicable IRAC Norms.

Yours faithfully,

(Manoranjan Mishra)
Chief General Manager