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Reserve Bank of India – Notifications

Notifications

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RBI/2021-2022/62
DOR.CRE(DIR).REC.26/21.04.103/2021-22

June 25, 2021

The Chief Executive Officer
All Primary (Urban) Co-operative Banks

Madam/ Dear Sir,

Appointment of Chief Risk Officer in Primary (Urban) Co-operative Banks

With increasing size and scope of business, Primary (Urban) Co-operative Banks (UCBs) are gradually getting exposed to greater degree of risks. It is, therefore, necessary that every UCB focuses its attention on putting in place appropriate risk management mechanism commensurate with its business profile and strategic objectives. In this connection, it has been decided that all UCBs having asset size1 of ₹5000 crore or above, shall appoint a Chief Risk Officer (CRO). The Board2 must clearly define the CRO’s role and responsibilities and ensure that he/she functions independently.

2. UCBs shall strictly adhere to the following instructions in this regard:

  1. The CRO shall be a senior official in the bank’s hierarchy and shall have adequate professional qualification / experience in the area of risk management.

  2. The CRO shall be appointed for a fixed tenure with the approval of the Board. The CRO can be transferred / removed from the post before completion of the tenure only with the approval of the Board and such premature transfer / removal shall be reported to the concerned Regional Office3 of Department of Supervision, Reserve Bank of India.

  3. The Board shall put in place adequate policies to safeguard the independence of the CRO. The CRO shall have direct reporting lines to MD/CEO or Board or Risk Management Committee of Board (RMC). In case the CRO reports to the MD/CEO, the Board or the RMC shall meet the CRO, without the presence of the MD & CEO, at least on a quarterly basis.

  4. The CRO shall not have any reporting relationship with the business verticals and shall not be given any business targets. Further, there shall not be any ‘dual hatting’ i.e. the CRO shall not be given any other responsibility such as CEO, COO, CFO, Chief of the Internal Audit, etc.

  5. In UCBs that follow committee approach in credit sanction process for high value proposals, if the CRO is one of the decision makers in the credit sanction process, he shall have voting power and all members who are part of the credit sanction process, shall individually and severally be liable for all the aspects, including risk perspective related to the credit proposal. If the CRO is not a part of the credit sanction process, his role will be limited to that of an adviser.

  6. In UCBs which do not follow committee approach for sanction of high value credits, the CRO can only be an adviser in the sanction process and shall not have any sanctioning power.

  7. All credit products shall be vetted by the CRO from the angle of inherent and control risks.

3. The CRO shall support the Board in establishing an integrated risk management system, capable of identifying, measuring and monitoring all types of risks on an ongoing basis. This will include developing the organisational risk appetite and a framework that will translate the Board’s strategy into clearly laid down monitorable risk limits at the aggregate and at granular levels. The CRO shall also be involved in actual monitoring and mitigation of risks.

4. It is emphasized that the primary responsibility of risk management lies with the Board. In order to focus the required level of attention on various aspects of risk management, UCBs meeting the eligibility criteria specified in para 1 above are advised to set up a Risk Management Committee (of the Board) by March 31, 2022. The Board shall decide the membership, scope of work and frequency of meeting of the Risk Management Committee.

5. UCBs meeting the prescribed criteria as on March 31, 2021 shall appoint / designate a CRO by March 31, 2022. UCBs which may fulfill the criteria at the end of the current or subsequent financial years shall appoint / designate a CRO within a period of six months from the end of the financial year concerned.

6. A copy of this circular should be placed before the Board of Directors of the bank at its next meeting.

Yours faithfully,

(Manoranjan Mishra)
Chief General Manager

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Reserve Bank of India – Notifications

Notifications

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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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Reserve Bank of India – Press Releases

Press Releases

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Reserve Bank of India announces the auction of Government of India Treasury Bills as per the following details:

Sr. No Treasury Bill Notified Amount
(in ₹ crore)		 Auction Date Settlement date
1 91 Days 15,000 June 30, 2021
(Wednesday)		 July 01, 2021
(Thursday)
2 182 Days 15,000
3 364 Days 6,000
  Total 36,000    

The sale will be subject to the terms and conditions specified in the General Notification F.No.4(2)-W&M/2018 dated March 27, 2018 along with the Amendment Notification No.F.4(2)-W&M/2018 dated April 05, 2018, issued by Government of India, as amended from time to time. State Governments, eligible Provident Funds in India, designated Foreign Central Banks and any person or institution specified by the Bank in this regard, can participate on non-competitive basis, the allocation for which will be outside the notified amount. Individuals can also participate on non-competitive basis as retail investors. For retail investors, the allocation will be restricted to a maximum of 5 percent of the notified amount.

The auction will be Price based using multiple price method. Bids for the auction should be submitted in electronic format on the Reserve Bank of India’s Core Banking Solution (E-Kuber) system on Wednesday, June 30, 2021, during the below given timings:

Category Timing
Competitive bids 10:30 am – 11:30 am
Non-Competitive bids 10:30 am – 11:00 am

Results will be announced on the day of the auction.

Payment by successful bidders to be made on Thursday, July 01, 2021.

Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends. In case of technical difficulties, Core Banking Operations Team should be contacted (email; Phone no: 022-27595666, 022-27595415, 022-27523516). For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125).

Ajit Prasad
Director   

Press Release: 2021-2022/431

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Reserve Bank of India – Press Releases

Press Releases

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Punjab and Maharashtra Cooperative (PMC) Bank Limited, Mumbai, Maharashtra, a Multi-State Urban Cooperative Bank was placed under All-Inclusive Directions under Sub-section (1) of Section 35-A read with Section 56 of the Banking Regulation Act, 1949 with effect from close of business on September 23, 2019 vide Directive DCBS.CO.BSD-I/D-1/12.22.183/2019-20 dated September 23, 2019, in the interest of depositor protection. The directions were last extended vide Directive dated March 26, 2021 up to June 30, 2021.

In response to the Expression of Interest (EOI) dated November 3, 2020 floated by PMC Bank for its reconstruction, certain proposals were received. After careful consideration, the proposal from Centrum Financial Services Ltd. (CFSL) along with Resilient Innovation Pvt. Ltd. has been found to be prima facie feasible. Accordingly, in specific pursuance to their offer dated February 1, 2021 in response to the EOI, RBI has, on June 18, 2021, granted “in-principle” approval, valid for 120 days, to CFSL to set up a small finance bank (SFB) under the general Guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector dated December 5, 2019.

Taking into account the time required for completion of various activities involved in the process, it is considered necessary to extend the aforesaid Directions. Accordingly, it is hereby notified for the information of the public that the validity of the aforesaid Directive dated September 23, 2019, as modified from time to time, has been extended for a further period from July 1, 2021 to December 31, 2021, subject to review.

All other terms and conditions of the Directives under reference shall remain unchanged.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/430

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Reserve Bank of India – Press Releases

Press Releases

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1. Reserve Bank of India – Liabilities and Assets*
(₹ Crore)
Item 2020 2021 Variation
Jun. 19 Jun. 11 Jun. 18 Week Year
1 2 3 4 5
4 Loans and Advances          
4.1 Central Government – – – – –
4.2 State Governments 4663 10380 11799 1419 7136
* Data are provisional.

2. Foreign Exchange Reserves
Item As on June 18, 2021 Variation over
Week End-March 2021 Year
₹ Cr. US$ Mn. ₹ Cr. US$ Mn. ₹ Cr. US$ Mn. ₹ Cr. US$ Mn.
1 2 3 4 5 6 7 8
1 Total Reserves 4464016 603933 21932 -4148 245064 26950 611995 98368
1.1 Foreign Currency Assets 4150552 561540 34418 -1918 226384 24846 592087 94501
1.2 Gold 265576 35931 -12754 -2170 17853 2050 15548 3115
1.3 SDRs 11078 1499 30 -14 215 13 52 52
1.4 Reserve Position in the IMF 36809 4965 237 -46 611 40 4308 700
*Difference, if any, is due to rounding off

4. Scheduled Commercial Banks – Business in India
(₹ Crore)
Item Outstanding as on Jun. 4, 2021 Variation over
Fortnight Financial year so far Year-on-year
2020-21 2021-22 2020 2021
1 2 3 4 5 6
2 Liabilities to Others            
2.1 Aggregate Deposits 15313124 145961 388031 199611 1415263 1357601
2.1a Growth (Per cent)   1.0 2.9 1.3 11.3 9.7
2.1.1 Demand 1730240 35181 -141154 -130952 182323 254391
2.1.2 Time 13582883 110780 529184 330564 1232940 1103210
2.2 Borrowings 242490 -2207 -22171 -1535 -62292 -44778
2.3 Other Demand and Time Liabilities 600722 29951 -64398 -55885 10399 61445
7 Bank Credit 10843448 12226 -116291 -106061 602667 588878
7.1a Growth (Per cent)   0.1 –1.1 –1.0 6.2 5.7
7a.1 Food Credit 89976 -687 33919 28722 8079 4293
7a.2 Non-food credit 10753472 12913 -150210 -134783 594588 584585

6. Money Stock: Components and Sources
(₹ Crore)
Item Outstanding as on Variation over
2021 Fortnight Financial Year so far Year-on-Year
2020-21 2021-22 2020 2021
Mar. 31 Jun. 4 Amount % Amount % Amount % Amount % Amount %
1 2 3 4 5 6 7 8 9 10 11 12
M3 18768268 19096038 162254 0.9 579354 3.4 327769 1.7 1901141 12.3 1716720 9.9
1 Components (1.1.+1.2+1.3+1.4)                        
1.1 Currency with the Public 2752971 2878270 15798 0.6 194741 8.3 125300 4.6 412274 19.3 333781 13.1
1.2 Demand Deposits with Banks 1984261 1854844 35367 1.9 -142219 -8.2 -129417 –6.5 187279 13.3 259371 16.3
1.3 Time Deposits with Banks 13983686 14313042 109659 0.8 518397 4.1 329356 2.4 1284292 10.8 1120630 8.5
1.4 ‘Other’ Deposits with Reserve Bank 47351 49881 1430 3.0 8436 21.9 2530 5.3 17295 58.3 2938 6.3
2 Sources (2.1+2.2+2.3+2.4-2.5)                        
2.1 Net Bank Credit to Government 5810192 5985157 162004 2.8 607353 12.2 174965 3.0 865017 18.4 417442 7.5
2.1.1 Reserve Bank 1099686 1108321 83122   191353   8636   177549   -75224  
2.1.2 Other Banks 4710506 4876836 78881 1.6 416000 10.5 166329 3.5 687468 18.6 492666 11.2
2.2 Bank Credit to Commercial Sector 11610235 11494044 9721 0.1 -140775 -1.3 -116191 –1.0 636481 6.2 596175 5.5
2.2.1 Reserve Bank 8709 1964 529   -6370   -6745   -2002   -4832  
2.2.2 Other Banks 11601526 11492081 9192 0.1 -134405 -1.2 -109445 –0.9 638483 6.2 601008 5.5

8. Liquidity Operations by RBI
(₹ Crore)
Date Liquidity Adjustment Facility MSF* Standing Liquidity Facilities Market Stabi lisation Scheme OMO (Outright) Long Term Repo Opera tions& Targeted Long Term Repo Opera tions# Special Long-Term Repo Operations for Small Finance Banks Special Reverse Repo£ Net Injection (+)/ Absorption (-) (1+3+5+ 6+9+10+ 11+12-2- 4-7-8-13)
Repo Reverse Repo* Variable Rate Repo Variable Rate Reverse Repo Sale Purchase
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Jun. 14, 2021 – 361592 – – 0 – – – – – 320 – – -361272
Jun. 15, 2021 – 374505 – – 0 3916 – – – – – 490 – -370099
Jun. 16, 2021 – 313654 – – 0 – – – – – – – – -313654
Jun. 17, 2021 – 317491 – – 29 – – – 390 – – – – -317072
Jun. 18, 2021 – 304546 – 200009 59 – – – 40160 – – – 1000 -465336
Jun. 19, 2021 – 44220 – – 2 – – – – – – – – -44218
Jun. 20, 2021 – 2438 – – 104 – – – – – – – – -2334
* Includes additional Reverse Repo and additional MSF operations (for the period December 16, 2019 to February 13, 2020)
# Includes Targeted Long Term Repo Operations (TLTRO) and Targeted Long Term Repo Operations 2.0 (TLTRO 2.0) and On Tap Targeted Long Term Repo Operations. Negative (-) sign indicates repayments done by Banks.
& Negative (-) sign indicates repayments done by Banks.
£ As per Press Release No. 2021-2022/177 dated May 07, 2021. From June 18, 2021, the data also includes the amount absorbed as per the Press Release No. 2021-2022/323 dated June 04, 2021.

The above information can be accessed on Internet at https://wss.rbi.org.in/

The concepts and methodologies for WSS are available in Handbook on WSS (https://rbi.org.in/scripts/PublicationsView.aspx?id=15762).

Time series data are available at https://dbie.rbi.org.in

Ajit Prasad
Director   

Press Release: 2021-2022/429

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Reserve Bank of India – Press Releases

Press Releases

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The results of the auctions of 4.26% Government Stock 2023 (Re-Issue), 5.85% Government Stock 2030 (Re-Issue), 6.76% Government Stock 2061 (Re-Issue) held on June 25, 2021 are:

Auction Results 4.26% GS 2023 5.85% GS 2030 6.76% GS 2061*
I. Notified Amount ₹3000 Crore ₹14000 Crore ₹9000 Crore
II. Underwriting Notified Amount ₹3000 Crore ₹14000 Crore ₹9000 Crore
III. Competitive Bids Received      
(i) Number 66 99 155
(ii) Amount ₹6765 Crore ₹18782 Crore ₹21290 Crore
IV. Cut-off price / Yield 99.98 0 95.55
(YTM: 4.2689%) (YTM: 0%) (YTM: 7.0961%)
V. Competitive Bids Accepted      
(i) Number 1 0 69
(ii) Amount ₹100 Crore ₹0 Crore ₹9045 Crore
VI. Partial Allotment Percentage of Competitive Bids 0%
(0 Bids)		 0%
(0 Bids)		 0%
(0 Bids)
VII. Weighted Average Price/Yield 99.98 0 95.74
(WAY: 4.2689%) (WAY: 0.0000%) (WAY: 7.0811%)
VIII. Non-Competitive Bids Received      
(i) Number 2 6 4
(ii) Amount ₹0.174 Crore ₹6.679 Crore ₹3.454 Crore
IX. Non-Competitive Bids Accepted      
(i) Number 2 0 4
(ii) Amount ₹0.174 Crore ₹0 Crore ₹3.454 Crore
(iii) Partial Allotment Percentage 100% (0 Bids) 100% (0 Bids) 100% (0 Bids)
X. Amount of Underwriting accepted from primary dealers ₹3000 Crore ₹14000 Crore ₹9000 Crore
XI. Devolvement on Primary Dealers ₹2899.826 Crore 0 0
* Green shoe amount of ₹48.454 crore has been accepted

Ajit Prasad
Director   

Press Release: 2021-2022/428

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RBI’s short-term paper devolves; 10-year G-Sec unsubscribed

Banking & Finance

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Government securities (G-Sec) prices dropped on Friday as the weekly G-Sec auction saw the short-term paper devolve on primary dealers (PDs) and the 10-year paper going unsubscribed.

Price of the benchmark 2030 G-Sec (coupon rate: 5.85 per cent) declined about 12 paise over the previous close, with its yield going up about 2 basis points. This paper was last traded at ₹98.725 (yield: 6.0285 per cent).

Bond yields and price are inversely related and move in opposite directions.

At the auction of the 2023 G-Sec (4.26 per cent), almost 97 per cent of the notified amount of ₹3,000 crore devolved on PDs. PDs are financial intermediaries which support the Government’s market borrowing programme and improve the secondary market liquidity in G-Secs.

Though the RBI received 99 bids aggregating ₹18,782 crore against the notified amount of ₹14,000 crore at the auction of the 10-year G-Sec, it neither accepted any bids nor did it devolve the paper on PDs.

The only paper that got fully subscribed was the 2061 G-Sec (6.76 per cent). In fact, green shoe amount of ₹48.454 crore was accepted over and above the notified amount of ₹9,000 crore.

Hardening yields

Marzban Irani, CIO-Fixed Income, LIC Mutual Fund, said: “In last few days, yields have been hardening at short end. With inflation inching upwards, Brent crude up…there are fewer bidders for short papers. Probably due to this the paper got devolved.”

Irani observed that volumes in the existing 10- year benchmark are dropping on expectations of a new benchmark being issued. Probably, the bids were at uncomfortable levels, resulting in RBI not accepting any bids at the auction of this paper.

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LIC, SBI Life, Canara Bank pick up stakes in Indian Bank under QIP

Banking & Finance

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Life Insurance Corporation (LIC), SBI Life and Canara Bank were among the top investors picking up stakes in Indian Bank under a QIP, according to a regulatory filing.

The country’s largest and the only state-owned life insurer, LIC, picked up 17.80 per cent of the shares issued under the qualified institutional placement (QIP), which closed on Thursday.

It was followed by SBI Life Insurance (11.87 per cent), SBI Mutual Fund and its various schemes (11.87 per cent), Societe Generale and its various schemes (9.74 per cent) and Canara Bank subscribing to 5.93 per cent of the shares offered in the issue, according to the regulatory filing by Indian Bank.

Indian Bank raised a total of ₹1,650 crore in its QIP of shares, which were issued at ₹142.15 apiece.

The state-owned lender said it allotted 11,60,74,569 new equity shares to the eligible qualified institutional buyers (QIBs) in the issue that opened on June 21 and closed on June 24.

In March this year, its board’s committee on capital raising had given approval for raising equity capital aggregating up to ₹4,000 crore through QIP in one or more tranches.

Indian Bank’s shares closed at ₹148.35 apiece on the BSE, up 0.64 per cent from the previous close.

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RBI’s heavy lifting helping govt borrow at lower cost

Banking & Finance

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The Reserve Bank of India (RBI) had clearly saved the day for the government in helping it borrow money at lower cost during the January-March 2021 quarter, despite spike in its borrowings, the latest quarterly public debt management report showed.

The government announced additional borrowing of ₹80,000 crore for FY21 in the Budget on February 1 this year, which led to a situation where the market found it difficult to absorb the supply. The yields also reacted negatively due to high fiscal deficit proposed in FY22 and higher-than-projected fiscal deficits for coming year.

Besides, rising crude prices and the gross borrowing amount of ₹12.06 lakh crore — more than market expectations — contributed to the hardening of the yields.

However, it is the RBI’s Monetary Policy Committee which gave comfort to the market by keeping Repo rate unchanged at 4 per cent at its meeting on February 5 and also announced the continuing with accommodative stance as long as necessary — atleast during the current financial year (2020-21) and into the next financial year (2021-22), the report highlighted.

OMO, G-Sec and Yield

The continuous announcement of Open Market Operations (OMO) by RBI, the US Federal Open Market Committee’s to keep interest rates near zero through 2023, lower demand by the real sector, cancellation of G-sec auction in the last week of March supported the yield, the quarterly public debt management report released by the Finance Ministry on Friday highlighted.

Commenting on the finance ministry’s report, Madan Sabnavis, Chief Economist, CARE Ratings, told BusinessLine: “Public debt management report of the government released today shows that the RBI played a critical role in managing the yield curve in FY 21 and hence facilitated a large government borrowing programme. While the room to lower repo rate below 4 per cent was limited large purchase of around ₹3 lakh crore of OMOs as well as operation twist (where different maturities are bought and sold) combined with TLTROs helped to stabilise the yields at a time when there was too much paper in the market”.

He highlighted that the same scene continues this year too with the RBI overtly stating that one of the objectives of the monetary policy is to manage the yield curve.

Liquidity woes

Meanwhile, a report from CARE Ratings on Friday highlighted that ₹26,000-crore government paper auctioned by the RBI on Friday saw a mixed response. Once again, the response to the 5.85 per cent 2030 paper was negative and it went unsubscribed. There have been two earlier occasions when the ten-year paper devolved on the primary dealers.

The market is still demanding more from the government given the large borrowing programme as well as the rising inflation trend, according to CARE Ratings. Since the beginning of the pandemic last year, the RBI has had to face the challenge of providing enough liquidity to finance the increased government borrowing without allowing interest rates and bond yields to rise. The central bank continues to face the same challenge in the current fiscal too, say economists.

The other major concern is that despite adequate liquidity infusion and reduction in interest rates, the growth of credit has remained at a low pace.

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RBI extends restrictions on PMC Bank further till Dec 31

Banking & Finance

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The Reserve Bank of India (RBI) has extended the validity of its Directions to the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank for a further period from July 1 to December 31, 2021, subject to review.

RBI extended the validity of its directions by six months, taking into account the time required for completion of various activities involved in the process of rescuing the bank.

The central bank, in a statement, said certain proposals were received in response to the expression of interest (EOI) floated in November 2020 by PMC Bank for its reconstruction.

“After careful consideration, the proposal from Centrum Financial Services Ltd. (CFSL) along with Resilient Innovation Pvt. Ltd. (BharatPe) has been found to be prima facie feasible.

SFB proposal

“Accordingly, in specific pursuance to their offer dated February 1, 2021, in response to the EOI, RBI has, on June 18, 2021, granted “in-principle” approval, valid for 120 days, to CFSL to set up a small finance bank (SFB)…,”RBI said in a statement.

Once the SFB is floated, PMC Bank would be merged into it.

Jaspal Bindra, Executive Chairman, Centrum Group, said that CFSL and BharatPe, equal partners in the proposed SFB, will together commit ₹900 crore to their joint venture in the first year.

As and when required, the partners will commit ₹900 crore more. The minimum paid-up net worth requirement for starting an SFB is only ₹200 crore.

Chander Purswani, President, PMC Depositors Forum, emphasised that the central bank must ensure that retail depositors get all their savings back.

Currently, withdrawals from PMC Bank are capped at ₹1 lakh per depositor for the entire duration that it is under RBI Directions. The bank has been under Directions with effect from the close of business on September 23, 2019.

The bank got into trouble due to fraud/ financial irregularities associated with huge exposure, which according to reports was at 73 per cent of its total advances, to a real estate group and manipulation of its books of accounts.

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