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Opening of Current Accounts by Banks – Need for Discipline

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RBI/2021-22/116
DOR.CRE.REC.63/21.04.048/2021-22

October 29, 2021

All Scheduled Commercial Banks
All Payments Banks

Madam/Sir,

Opening of Current Accounts by Banks – Need for Discipline

Please refer to our circular DOR.No.BP.BC/7/21.04.048/2020-21 dated August 6, 2020 on the captioned subject and associated circulars thereon1.

2. On a review and taking into account feedback received from Indian Banks’ Association (IBA) and other stakeholders, it has been decided that banks may open current accounts for borrowers who have availed credit facilities in the form of cash credit (CC)/ overdraft (OD) from the banking system as per the provisions below:

(i) For borrowers, where the exposure of the banking system is less than ₹5 crore, there is no restriction on opening of current accounts or on provision of CC/OD facility by banks, subject to obtaining an undertaking from such borrowers that they shall inform the bank(s), as and when the credit facilities availed by them from the banking system reaches ₹5 crore or more.

(ii) In respect of borrowers where exposure of the banking system is ₹5 crore or more, such borrower can maintain current accounts with any one of the banks with which it has CC/OD facility, provided that the bank has at least 10 per cent of the exposure of the banking system to that borrower.

Further, other lending banks may open only collection accounts subject to the condition that funds deposited in such collection accounts will be remitted within two working days of receiving such funds, to the CC/OD account maintained with the above-mentioned bank maintaining current accounts for the borrower. In case none of the lenders has at least 10% exposure of the banking system to the borrower, the bank having the highest exposure may open current accounts. Non-lending banks are not permitted to open current accounts.

3. It is clarified that borrowers not availing CC/OD facility from the banking system shall continue to maintain current accounts as per para 1(v) of the above mentioned circular dated August 6, 2020, as hitherto.

4. Further, banks are permitted to open/ maintain the following accounts, without any restrictions placed in terms of the above-mentioned circular dated August 6, 2020, subject to meeting the conditions specified as at para 2 of DOR.No.BP.BC.30/21.04.048/2020-21 dated December 14, 2020:

    1. Inter-bank accounts

    2. Accounts of All India Financial Institutions (AIFIs), viz., EXIM Bank, NABARD, NHB, and SIDBI

    3. Accounts opened under specific instructions of Central Government and State Governments

    4. Accounts attached by orders of Central or State governments/regulatory body/Courts/investigating agencies etc. wherein the customer cannot undertake any discretionary debits

5. With reference to FAQ 18 of the circular dated December 14, 2020, in line with FAQ 9, banks maintaining collection accounts are permitted to debit fee/charges from such accounts before transferring the funds to the escrow account/CC/OD account of the borrower.

6. With reference to para 3 of the circular dated December 14, 2020 read with FAQ 17, it is clarified that banks shall monitor all accounts regularly, at least on a half-yearly basis, specifically with respect to the exposure of the banking system to the borrower, and the bank’s share in that exposure, to ensure compliance with these instructions. If there is a change in exposure of banks or aggregate exposure of the banking system to the borrower which warrants implementation of new banking arrangements, such changes shall be implemented within a period of three months from the date of such monitoring.

7. Banks may implement the necessary changes within one month from the date of this circular. The compliance position thereon will be reviewed thereafter.

8. A consolidated self-contained circular on the subject will be issued soon.

9. All other instructions contained in the circulars ibid remain unchanged.

Yours faithfully,

(Manoranjan Mishra)
Chief General Manager

1 DOR.No.BP.BC.27/21.04.048/2020-21 dated November 2, 2020, DOR.No.BP.BC.30/21.04.048/2020-21 dated December 14, 2020 and DOR.CRE.REC.35/21.04.048/2021-22 dated August 04, 2021

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Reserve Bank of India – Press Releases

Press Releases

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    GOI FRB 2028 6.10% GS 2031 6.76% GS 2061
I. Notified Amount ₹4,000 cr ₹13,000 cr ₹7,000 cr
II. Cut off Price / Implicit Yield at cut-off 99.65/4.3776% 97.94/6.3866% 95.89/7.0698%
III. Amount accepted in the auction ₹4,000 cr ₹13,000 cr ₹7,000 cr
IV. Devolvement on Primary Dealers Nil Nil Nil

Ajit Prasad
Director   

Press Release: 2021-2022/1115

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Cholamandalam Investment Q2 net up 40%

Banking & Finance

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The standalone net profit of Cholamandalam Investment & Finance Company in the second quarter of the current fiscal went up by 40.43 per cent to ₹606.54 crore.

The Murugappa Group NBFC posted a net profit of ₹431.91 crore in the year-ago quarter.

Total income marginally increased to ₹2,470.69 crore (₹. 2,439.78 crore) during the July-September quarter. Disbursements, on a year-on-year basis, went up by 35 per cent to ₹8,706 crore (₹6,457 crore) during Q2FY22.

In arelease, the company said that last quarter had several positives including waning of second wave of Covid-19, India outpacing other countries in terms of increased vaccination drive and a good monsoon.

“These events have led to expectations of a swift revival of the Indian economy supported by uptrend in economic indicators like tax collections, power consumption, vehicle registrations, highway toll collection and e-way bills. This economic revival has led to a sharp recovery in Chola’s disbursements and collections during Q2 FY22,” the company added.

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RBI Central Board reviews bank grievance redress systems

Banking & Finance

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The Central Board of the Reserve Bank of India on Friday took stock of a nationwide survey among bank customers regarding banks’ grievance redress system and the functioning of ombudsman schemes.

To improve the efficacy of the internal grievance redress mechanism of banks and to provide better customer service, a comprehensive framework has been put in place comprising certain measures, according to RBI.

The measures include enhanced disclosures on customer complaints by the banks and the Reserve Bank, recovering the cost of complaints’ redress from banks when maintainable complaints are higher than their peer-group averages. intensive review of grievance redress mechanism, and supervisory/regulatory actions against banks that fail to improve their redress mechanism in a time bound manner.

Integrated ombudsman

The Banking Ombudsman Scheme (BOS), launched in 1995, has served as a flagship alternate grievance redress mechanism for the redress of customer complaints against banks received by the Reserve Bank.

Subsequently, the ombudsman scheme for NBFCs and the ombudsman scheme for digital transactions were launched in 2018 and 2019, respectively.

An in-house committee, set up to review the ombudsman framework and suggest measures to improve its efficacy, recommended convergence of the three ombudsman schemes into an integrated “Reserve Bank of India Ombudsman Scheme”, expanding the ambit of this scheme to all regulated entities presently not covered under the existing schemes to provide a single window for grievance redress.

Centralised processing

The committee also recommended setting up of a centralised receipt and processing centre for receipt and initial processing of complaints under the ‘One Nation – One Jurisdiction’ approach, reducing the turnaround time (TAT) for the redress of complaints, and introducing delegation by appointing a deputy ombudsman.

The Board, in its meeting, reviewed the current domestic and global economic situation and challenges. It deliberated on possible measures for addressing the emerging challenges.

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RBI imposes Rs 56 lakh penalty on The Nainital Bank, BFSI News, ET BFSI

Banking & Finance

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The Reserve Bank of India (RBI) on Friday said it has imposed a penalty of Rs 56 lakh on The Nainital Bank, Uttarakhand, for non-compliance with certain norms related to classification of non-performing assets and frauds. The apex bank had conducted a Statutory Inspection for Supervisory Evaluation (ISE) of the lender with reference to its financial position as on March 31, 2019 and found non-compliance with certain directions.

There was a divergence between bank’s reported NPAs and NPAs assessed during the inspection on account of failure to classify certain borrower accounts as NPA. There was also a failure to disclose material divergences relating to asset classification and provisioning identified by the RBI, despite exceeding the defined threshold, in the Notes to Accounts, the RBI said in a statement.

There was also a failure on the part of the bank to report frauds as per the RBI directions.

The RBI, however, said the action against The Nainital Bank is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. PTI NKD RAM



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Reserve Bank of India – Press Releases

Press Releases

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April 14, 2015




Dear All




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.



Thank you for your continued support.




Department of Communication

Reserve Bank of India


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RBI slaps ₹56-lakh penalty on Nainital Bank

Banking & Finance

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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹56 lakh on The Nainital Bank Ltd (NBL), Uttarakhand, for non-compliance with its directions relating to divergence in non-performing asset (NPA) accounts as well as asset classification and provisioning, and classification and reporting of frauds.

Bank of Baroda holds 98.57 per cent stake in the nearly century old bank.

“This penalty has been imposed in exercise of powers vested in RBI under the provisions of…the Banking Regulation Act, 1949,” the central bank said in a statement.

Regulatory non-compliance

It emphasised that this action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

RBI had conducted the statutory Inspection for Supervisory Evaluation (ISE) of the bank with reference to its financial position as on March 31, 2019.

Also see: RBI imposed a monetary penalty of ₹1 crore on Paytm Payments

The examination of the risk assessment report, inspection report and all related correspondence pertaining to the inspection, revealed, inter alia, non-compliance with the above-mentioned directions to the extent of (i) divergence between bank’s reported NPAs and NPAs assessed by the inspection on account of failure to classify certain borrower accounts as NPA, and (ii) failure to disclose material divergences relating to asset classification and provisioning identified by RBI, despite exceeding the defined threshold, in the notes to accounts, the central bank said.

Further, the report found failure to report frauds as per RBI directions.

Also see: RBI slaps penalty on SBI, StanChart

In furtherance to the same, RBI said a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with its directions, as stated therein.

“After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by the bank, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank, to the extent of non-compliance with the aforesaid directions,” per the statement.

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Stocks To Issue Bonus Shares In November 2021

Personal Finance

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1. Shree Ganesh Remedies:

The company previously informed that it has fixed the Record Date as 02/11/2021 for the purpose Issue of Bonus Equity Shares in the Ratio 1:5. The ex-bonus date shall be November 1, 2021 , implying investors’ should be having the company’s shares as on this date to be considered for the eligibility which is fixed on the record date.

Shree Ganesh Remedies Limited’s core activities chiefly consist of manufacturing & export of Pharmaceutical Drug Intermediates & Fine Chemicals and Research. From toll manufacturing to custom chemistry collaborations the company is amongst the leading CMO and CDMO based in India. The stock today closed at a price of Rs. 429.85. The one-year return of the stock has been a whopping 255%. The company’s standalone net sales for the September quarter have gone up by over 40 percent YoY.

2. Universal Auto Foundry:

2. Universal Auto Foundry:

The bonus issue proposed is in the ratio of 1:4. The purpose of ascertaining the eligibility of shareholders entitled for issuance of Bonus Equity Shares of the Cornpany in proportion of 1:4 i.e. only one share shall be issued for every 4 equity share of nominal value of Rs. 10.

The company is engaged in the manufacturing of Iron Castings. We manufacture castings components in Grey Iron and S.G. (Ductile) Iron, primarily for automotive sector. Castings are supplied in Machined, Semi Machined and as cast condition with surface treatment as per customer’s need. Suspension Brackets, Differential housing, Hubs, Brake drum, Flywheels, Adjuster Nuts, Pulleys, Dampers, etc. are some of the items that find application in the commercial vehicle and engineering industry.

The company’s stock price closed at Rs. 78.75 per share on October 29, 2021.

So , as we have listed the above stocks for which the companies’ will be deciding on the shareholders eligibility in November month on the pre-decided dates. Here is also given when these bonus shares get credited to shareholders’ account.

How long does it takes for the bonus share issuance credit?

How long does it takes for the bonus share issuance credit?

It is to be noted that usually the dividends as well as the bonus shares get credited to customers account within one month after the record date. First to be eligible for the respective bonus or dividend, you should be holding the shares as on ex-date or might have sold the same on the ex-date. Nonetheless, the role of RTA is crucial here and as and shares get credited to your account, you will receive an SMS.

Process of bonus share issuance credit

Process of bonus share issuance credit

After the company has determined shareholders who are eligible for the bonus, there is taken the next step wherein there is decided allotment of ISINs or International Securities Identification Numbers to the bonus shares. After the same is done in respect of all the share, the company credits bonus issue shares to its eligible shareholders account within 15 days time. Now the process is even faster owing to dematerialized and electronic share transfer mode.

Disclaimer:

Disclaimer:

Notably, the stocks listed are just to given an idea on the likely companies’ that will be issuing bonus shares in the near future and is not a recommendation to buy in these shares listed.

GoodReturns.in



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