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RBI bars Paytm Payments Bank from onboarding new customers

Mumbai (Maharashtra) [India]: The Reserve Bank of India (RBI) on Friday said it has banned Paytm Payments Bank from onboarding new customers with immediate effect.

“Reserve Bank of India has today, in the exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers,” the RBI said in a statement.
The RBI has also directed Paytm Payments Bank to appoint an IT audit firm to conduct a comprehensive system audit of its IT system.

“The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors,” the statement said.

“This action is based on certain material supervisory concerns observed in the bank,” the central bank added. (ANI)

 

NRIs, OCIs don’t require prior approval to buy immovable property in India: RBI

Mumbai [India]: Non-Resident Indians (NRIs) and Overseas Citizen of India (OCIs) do not require prior approval of the Reserve Bank of India (RBI) for buying or selling immovable properties like houses in India, the central bank said on Wednesday.
“At present, NRIs/OCIs are governed by provisions of FEMA 1999 and do not require prior approval of RBI for acquisition and transfer of immovable property in India, other than agricultural land/ farm house/ plantation property, as per the terms and conditions laid down in Chapter IX of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, dated October 17, 2019 (as amended from time to time), issued under Section 46 of FEMA 1999,” the RBI said in a statement. The RBI issued a clarification on acquisition/transfer of immovable property in India by Overseas Citizen of India (OCIs). “A large number of queries have been received at various Offices of the Reserve Bank, based on newspaper reports on a Supreme Court Judgement, on whether prior approval of RBI is required for acquisition/transfer of immovable property in India by as Overseas Citizen of India OCIs,” the central bank said.
“It is hereby clarified that the concerned Supreme Court Judgement dated February 26, 2021 in Civil Appeal 9546 of 2010 was related to provisions of FERA, 1973, which has been repealed under Section 49 of FEMA, 1999,” the RBI added.

RBI imposes Rs.1.8 crore penalty on PNB

Mumbai (India): The Reserve Bank of India (RBI) on Wednesday imposed Rs.1.8 crore monetary penalty on Punjab National Bank (PNB) for ‘deficiencies in regulatory compliance’.
“The Reserve Bank of India (RBI) has, by an order dated December 15, 2021, imposed a monetary penalty of Rs.1.80 crore on Punjab National Bank (the bank) for contravention of sub-section (2) of section 19 of the Banking Regulation Act, 1949 (the Act), the RBI said in a statement. “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,” it added.
The Statutory Inspection for Supervisory Evaluation (ISE) of Punjab National Bank was conducted by RBI with reference to its financial position as on March 31, 2019 and the examination of the Risk Assessment Report, the Annual Review of implementation of Exposure Management Measures for Financial Year 2019-20 carried out by RBI during July 2020 and all related correspondence pertaining to the same, revealed, inter-alia, contravention of sub-section (2) of section 19 of the Act to the extent the bank held shares in borrower companies, as pledgee, of an amount exceeding thirty per cent of paid-up share capital of those companies.
In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of the aforesaid provisions of the Act, 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 contravention of the aforesaid provisions of the Act was substantiated and warranted imposition of monetary penalty on the bank, to the extent of contravention of the aforesaid provisions of the Act, the central bank said.

RBI keeps lending rates unchanged at 4% for ninth time

New Delhi [India] : The Reserve Bank of India (RBI) on Wednesday kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance in the backdrop of concerns over the emergence of the new coronavirus variant Omicron. Consequently, the reverse repo rate will continue to earn 3.35 per cent for banks for their deposits kept with RBI. “The Monetary Policy Committee (MPC) has decided to keep benchmark repurchase (repo) rate at 4 per cent,” Governor Shaktikanta Das said while announcing the bi-monthly monetary policy review. The decision to maintain status quo on the benchmark interest rate comes in the backdrop of global scare due to the new coronavirus variant Omicron. This is the ninth consecutive time since the rate remains unchanged. The central bank had last revised the policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low. Das, who heads the six-member MPC, said that the MPC voted unanimously for keeping interest rate unchanged and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target. RBI retained its growth projection at 9.5 per cent for the current fiscal despite concerns over Omicron. Das also said the headline inflation would peak in the fourth quarter of the current fiscal. The inflation projection has been retained at 5.3 per cent for the current financial year. Retail inflation rose to 4.48 per cent in October from 4.35 per cent in September, mainly due to higher fuel and edible oil prices. “Price stability remains a cardinal principle of RBI as it fosters growth, stability,” the Governor said. The MPC has been given the mandate to maintain annual inflation at 4 per cent until March 31, 2026, with an upper tolerance of 6 per cent and a lower tolerance of 2 per cent.

RBI imposes monetary penalty on State Bank of India

Mumbai (Maharashtra) [India]: The Reserve Bank of India (RBI) by an order dated November 16 has imposed a monetary penalty of Rs 1 crore on the State Bank of India for contravention of section 19 (2) of the Banking Regulation Act, 1949 (the Act), informed RBI.
“This action is based on 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,” reads the official release. As per the press note, the irregularities were identified after a Statutory Inspections for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial positions as on March 31, 2018, and March 31, 2019, and the examination of the Risk Assessment Reports, Inspection Report and all related correspondence pertaining to the same, revealed, inter-alia, contravention of section 19 of the Act.
Section 19 (2) of the Act says that “no banking company shall hold shares in any company, whether as pledgee, mortgagee or absolute owner, of an amount exceeding thirty per cent of the paid-up share capital of that company or thirty per cent of its own paid-up share capital and reserves, whichever is less.”
“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 contravention of the aforesaid provisions of the Act was substantiated and warranted imposition of monetary penalty on the bank, to the extent of contravention of the aforesaid provisions of the act,” read the press note.

India has potential to grow at reasonably high pace in post-pandemic scenario, says RBI Governor

Mumbai (Maharashtra) [India]: India has the potential to grow at a reasonably high pace in the post-pandemic scenario, said Reserve Bank of India (RBI) Governor Shaktikanta Das on Tuesday.
Addressing the SBI Banking and Economics Conclave 2021, the RBI Governor said that numerous high-frequency indicators suggest that economic recovery is now taking hold. “There are signs that consumption demand, triggered by the festive season, is making a strong comeback. This should encourage firms to expand capacity and boost employment and investment amidst congenial financial conditions,” said Das.
He noted that the recent cut in excise duty on petrol and diesel by the Central government and in value-added tax (VAT) by several state governments will augment the purchasing power of the people, which, in turn, he said, “will create space for additional consumption.”
“I firmly believe that India has the potential to grow at a reasonably high pace in the post-pandemic scenario,” said Das.
“Numerous high-frequency indicators suggest that economic recovery is now taking hold… While the economy is picking up, it is yet to cover a lot of ground before it gets broad-based and well-entrenched,” he said further.
The RBI governor added that with a scale of vaccination in India, “that is among the highest in the world,” the country is poised to lead the fight against COVID-19.

Central Board of RBI reviews current domestic, global economic situation

Mumbai (Maharashtra) [India] : The Central Board of Directors of Reserve Bank of India (RBI) in its 591st meeting reviewed the current domestic and global economic situation and challenges.
The 591st meeting was held under the Chairmanship of RBI Governor Shaktikanta Das in Mumbai. The Board deliberated on possible measures for addressing the emerging challenges. It also discussed the working of sub-committees of the Central Board and activities of a few Central Office Departments including the nationwide survey among bank customers regarding banks’ grievance redress system and the functioning of the Ombudsman schemes.
The Board also congratulated the Governor on his reappointment.
Deputy Governors Mahesh Kumar Jain, Dr Michael Debabrata Patra, M Rajeshwar Rao, T Rabi Sankar and other Directors of the Central Board like, N Chandrasekaran, Satish K Marathe, S Gurumurthy and Prof Sachin Chaturvedi attended the meeting.
Debasish Panda, Secretary, Department of Financial Services and Ajay Seth, Secretary, Department of Economic Affairs also attended the meeting. (

121 Finance goes live on OCEN enabled GeM Sahay

Jaipur (Rajasthan) [India] : 121 Finance, an RBI registered NBFC, focused on Short Term Working Capital Finance, has become one of the first lenders on GeM SAHAY and hence one of the earliest adopters of OCEN (Open Credit Enablement Network). This Government e-Marketplace SAHAY initiative brings a complete financing solution for sole proprietors to avail instant, frictionless financing to help fulfil government orders. With this, 121 Finance joins ICICI Bank and UGRO capital on this platform.
121 Finance has built a proprietary technology stack that can provide end-to-end digital loans as low as Re.1. Passionate about Working Capital Management, Dr Ravi Modani founded 121 Finance, now present in 86 cities across the country. 121 Finance offers various innovative products ranging from Invoice Discounting to Factoring; Purchase Finance to Credit Coverage solutions like 121 Smart Credit as Channel Finance from Distributors to Dealers. GeM Sahay opens up a multibillion-dollar opportunity with almost 50 lakh products, a transaction value of Rs.147,000 crores, and 29 lakh registered suppliers. “Going live on GeM Sahay also opens a huge opportunity to act as co-lending partners and tech-enabled lending partners to various banks. Being able to disburse a loan in less than 10 minutes of the application being made is a showcase of the technical competence, agility, maturity, and disruption in Trade Finance with innovative, customised solutions. 121 Finance uses its own proprietary algorithm named RACE(™), which is based on machine learning to enhance the deliverables and also underwrite risk, without the involvement of human emotion.”, says Dr Ravi Modani, Founder & CEO, 121 Finance.
Prashant Kumar Singh, CEO Government eMarketplace, says, “It is great to have 121 Finance onboard to provide cash flow based loans. Purchase order financing will help MSMEs accept larger purchase orders and hence provide a boost to economic activity.”

Multi-Agency Group investigation on Pandora Papers begins

New Delhi [India] : The Multi-Agency Group (MAG) on Pandora Papers has begun its preliminary investigation of entities and persons named in Pandora Papers and held its first meeting last week. The meeting of MAG was chaired by the Central Board of Direct Taxes Chairman JB Mohapatra. Officials of Enforcement Director (ED), Reserve Bank of India (RBI) and Financial Intelligence Unit (FIU) attended the meeting.
Sources told ANI that MAG, in its meeting, discussed the information reported by the International Consortium of International Journalists (ICIJ) on October 3, 2021, where it was claimed to be a 2.94 terabyte (TB) data trove that exposes the offshore secrets of wealthy elites from more than 200 countries and territories.
According to the source present in the meeting, MAG discussed the leak of Pandora Papers reported by ICIJ. “Only a few of the 380 Indian names and entities have appeared in the media so far. MAG will fast track its investigation once the rest of the names of Indian entities are released by ICIJ,” said sources.
“It was decided in the meeting that the MAG will seek information from countries concerned on Indian entities named in Pandora Papers through Automatic Exchange of Information (AEOI). Through AEIO tax authorities match the incomes earned or account held abroad, with that declared in their tax returns so as to detect instances, if any, of tax evasion,” sources added.
India has activated the AEOI relationship for receiving information from 96 countries including the British Virgin Islands and the Bahamas where Indian entities have invested their wealth.
Sources further told that the MAG also have a platform of Organisation for Economic Co-operation and Development (OECD) where, through Spontaneous Exchange Information, India can ask for information from countries concerned.
“Tax authorities also have the provision of common reporting standard (CRS), where CRS requires financial institutions to identify the tax residency of all the customers, and in most cases report information on customers who are tax residents outside of the country/jurisdiction where they hold their accounts,” they said.
As per the ICIJ, as many as 380 Indians are on the list of the global elite who has been exposed for ring-fencing their wealth through the shadowy financial transaction and using offshore tax havens to hide assets worth millions of dollars.
The investigation is based on a leak of confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low or no-tax jurisdictions.
The sources said that MAG will take appropriate action as per law.
Earlier in a statement, CBDT had said that government will also proactively engage with foreign jurisdictions for obtaining information in respect of relevant taxpayers/entities.
The Government of India is also part of an Inter-Governmental Group that ensures collaboration and experience sharing to effectively address tax risks associated with such leaks.
It may be noted that following earlier similar leaks in the form of ICIJ, HSBC, Panama Papers and Paradise Papers, the government had already enacted the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 with an aim to curb black money, or undisclosed foreign assets and income by imposing suitable tax and penalty on such income.
Undisclosed credits of Rs 20,352 crore approximately (status as on 15.09.2021) have been detected in the investigations carried out in the Panama and Paradise Papers.

RBI increases IMPS transaction limit to Rs 5 lakh per transaction

Mumbai (Maharashtra) [India]: The Reserve Bank of India (RBI) on Friday announced a revision in the transaction limit for the Immediate Payment Service (IMPS) of National Payments Corporation of India (NPCI), increasing it from Rs 2 lakh to Rs 5 lakh.
IMPS is an important payment system providing 24×7 instant domestic funds transfer facility and is accessible through various channels like internet banking, mobile banking apps, bank branches, ATMs, SMS and Interactive Voice Response System (IVRS). According to the RBI, the per-transaction limit in IMPS before today’s revision, effective from January 2014, was capped at Rs 2 lakh for channels other than SMS and IVRS, while the per-transaction limit for SMS and IVRS channels was Rs 5000.
With Real Time Gross Settlement (RTGS) now operational round the clock, there has been a corresponding increase in the settlement cycles of IMPS, thereby reducing the credit and settlement risks.
In view of the importance of the IMPS system in the processing of domestic payment transactions, it was proposed to increase the per-transaction limit from Rs 2 lakh to Rs 5 lakh for channels other than SMS and IVRS.
“This will lead to a further increase in digital payments and will provide an additional facility to the customers for making digital payments beyond Rs 2 lakh. Necessary instructions in this regard would be issued separately,” the RBI said.
Apart from this, the RBI has also introduced another cohort in its regulatory Sandbox. Reserve Bank’s Regulatory Sandbox (RS) has so far introduced three cohorts.
Six entities have successfully exited the First Cohort on ‘Retail Payments’ while under the Second Cohort on ‘Cross Border Payments’, eight entities are undertaking tests.
The application window for the Third Cohort of ‘MSME Lending’ is currently open.
With a view to prepare the fintech eco-system, it has been proposed that the topic for the Fourth Cohort would be ‘Prevention and Mitigation of Financial Frauds’. The focus would be on using technology to reduce the lag between the occurrence and the detection of frauds, strengthening the fraud governance structure and minimising response time to frauds. The application window for this cohort would be opened in due course.
The RBI Governor, Shaktikanta Das, today announced a new scheme on retail digital payments solutions in the offline mode.
“A scheme to test technologies that enable digital payments even in remote places where internet connectivity is either absent or barely available was announced in August 2020. Given the encouraging experience gained from the pilot tests, it is proposed to introduce a framework for retail digital payments in offline mode across the country. This will further expand the reach of digital payments and open up new opportunities for individuals and businesses,” he said.
In August last year, the Reserve Bank permitted small value offline transactions through cards and mobile devices for single payments of up to Rs 200 on a pilot basis.
Under the pilot scheme, Payment System Operators (PSO) banks and non-banks may offer digital payments offline (payments that do not require internet connectivity to take effect).

Realty sector welcomes RBI’s decision to keep repo rate unchanged, says it will encourage buyers’ confidence

New Delhi [India]: Real estate experts have welcomed the Reserve Bank of India’s decision to keep the repo rate unchanged for the eighth time.
Aditya Kushwaha, CEO and Director of Axis Ecorp said that RBI’s move to maintain the status quo on repo-rate and reverse repo-rate for the eighth consecutive time will provide stability to markets and give much-needed liquidity. Kushwaha also remarked that the real estate sector will continue to benefit from the low rate of interest.
“The sector is experiencing good momentum and this decision would further boost demand and sales during the festive season. Another positive takeaway from today’s announcement is that RBI has retained the GDP forecast for the current financial year at 9.5 per cent which will also act as a sentiment booster,” he added.
Vinit Dungarwal, the Director at AMs Project Consultants Pvt. Ltd said, the RBI has been doing the heavy lifting to bring back the economy on track since the start of the pandemic.
“In line with the expectations, the RBI has kept its monetary stance accommodative, keeping rates unchanged in its monetary policy announcement. Add to it we have had a good monsoon season and robust production. The Inflation too has remained lower than the anticipated numbers. All these are positive indicators for our economy. We are hopeful that this accommodative move by RBI will foster the demand for affordable and mid-segment housing in this festive quarter and enable demand creation,” he said.
Surendra Hiranandani, the Chairman and Managing Director of House of Hiranandani also welcomed the move saying that it will induce optimism, encourage buyers’ confidence and propel pent-up housing demand.
“The pandemic has reinstated the importance of homeownership. Low-interest rates amidst the festive season, positive market sentiment and receding Covid-19 cases, together create a favourable condition for home-buying. To benefit from one of the best home-buying periods, homebuyers must immediately translate their plans into action and avoid prolonging them further,” he added.
The Reserve Bank of India (RBI) on Friday kept the repo rate unchanged for the eighth time straight and continued with an accommodative stance. The repo rate — the central bank’s lending rate — remains unchanged at 4 per cent and the reverse repo rate — borrowing rate — at 3.35 per cent.

RBI’s monetary policy pause to help foster housing demand during the festive season

The Reserve Bank of India’s (RBI) decision to pause the monetary policy would help foster the housing demand during festival season, a real estate expert said on Friday.

New Delhi [India], October 8 : Welcoming RBI’s decision, the chairman of ANAROCK group, Anuj Puri said, “RBI maintained the monetary policy pause; in short, for homebuyers, the low home loan interest rates regime will continue in the market and help foster housing demand during the ongoing festive season.” “Notably, this is a period when housing sales usually surge on the back of attractive offers by developers and lending banks,” he added.
Puri said research by the ANAROCK group indicated that at least 10-15 per cent growth may be seen in the ongoing festive period (October-December) across the top seven cities against the preceding quarter.
“In quarter three of 2021, the top seven cities saw total housing sales of nearly 62,800 units – already the best quarterly sales since the pandemic,” Puri added.
If ANAROCK’s predictions are accurate, the ongoing festive quarter will see at least a 35-40 per cent yearly rise in overall housing sales across the top seven cities as against the same period in 2020.
“In quarter four of 2020, the top seven cities saw total housing sales of nearly 50,900 units,” he informed.
Notably, the repo rate has remained unchanged for the eighth time and has continued with an accommodative policy stance for ‘as long as necessary to revive and sustain growth on a durable basis’.
The policy decision has been taken to mitigate the impact of COVID-19 on the economy while ensuring inflation remains within the target, RBI Governor Shaktikanta Das said.
“The MPC has been given the mandate to maintain annual inflation at 4 per cent until March 31, 2026, with an upper tolerance of 6 per cent and a lower tolerance of 2 per cent,” he said.
RBI had last revised its policy repo rate, the central bank’s lending rate, on May 22, 2020, in an off-policy cycle to perk up the demand by cutting interest rate to a historic low.
The repo rate — the central bank’s lending rate — remains unchanged at 4 per cent and the reverse repo rate — borrowing rate — at 3.35 per cent.
“The worst of the second wave is behind us, and substantial pickup in COVID-19 vaccination, giving greater confidence to open up and normalize economic activity,” he added.

RBI board reviews economic situation amid challenges

Mumbai (Maharashtra) [India], Aug 13 : The 590th meeting of central board of directors at Reserve Bank of India (RBI) was held on Friday under the chairmanship of Governor Shaktikanta Das through video conferencing.
The board reviewed current economic situation, global and domestic challenges and various areas of operations of the bank besides recent policy measures taken by the central bank to mitigate the adverse impact of Covid-19 on economy. The board also reviewed functioning of local boards.
Deputy Governors Mahesh Kumar Jain, Michael Debabrata Patra, M Rajeshwar Rao, T Rabi Sankar and other directors of the central board Satish K. Marathe, S Gurumurthy, Revathy Iyer and Prof Sachin Chaturvedi also attended the meeting.
Debasish Panda, Secretary at the Department of Financial Services, and Ajay Seth, Secretary at the Department of Economic Affairs, also attended the meeting.

RBI keeps interest rates untouched, accommodative stance continues

              

Mumbai (Maharashtra) [India]: The Reserve Bank of India (RBI) on Friday kept repo rate unchanged for seventh time straight and continued with an accommodative stance, citing the need to support ongoing growth recovery amid continued uncertainty and global financial market volatility.

The announcement came after a three-day meeting of its Monetary Policy Committee (MPC). The central bank has cut policy rates by 115 basis points since February 2020.
The repo rate — the central bank’s lending rate — remains unchanged at 4 per cent and reverse repo rate — borrowing rate — at 3.35 per cent.

The second Covid wave has raised uncertainty around economic outlook and pushed potential policy normalisation further into the future.

While the economy is slowly coming back on track, economists say the RBI does not want to derail the pace of growth by tweaking the rates or stance.

Economic growth has to be sustainable before the rates are raised at a time when inflation is visibly sticky. The price build-up in global commodities, especially for those whose prices are a pass through into domestic market, has put significant pressure on both retail and wholesale inflation since January.

RBI cautions public

New Delhi [India], August 4 : The Reserve Bank of India (RBI) on Wednesday cautioned the public to not fall prey to fictitious offers of buying or selling of old banknotes and coins.
This advisory comes in the wake of RBI coming across certain elements fraudulently using its name or logo and seeking charges or commission or tax from the public, in transactions related to buying and selling of old banknotes and coins through various online or offline platforms. The central bank further clarified that it does not deal in such matters and never seeks charges or commissions of any sort.
“Reserve Bank of India has also not authorised any institution or firm or person etc. to collect charges or commission on its behalf in such transactions,” it said.
RBI further advises members of the public to remain cautious and not to fall prey to elements using the name of RBI to extract money through such fictitious or fraudulent offers.

IndusInd Bank gets empanelled as agency bank to RBI

Mumbai (Maharashtra) [India], August 3 : Private sector lender IndusInd Bank said on Tuesday it has been empanelled by the Reserve Bank of India (RBI) as an agency bank to facilitate transactions related to government businesses.
The announcement comes close on the heels of a recent RBI guideline that authorises scheduled private sector banks as agency banks of the regulator for conduct of government business. With this, IndusInd Bank joins ranks with few other private banks of the country to carry out general banking business on behalf of the Central and state governments while also offering customers the convenience of undertaking routine financial transactions through its banking platform.
“We are confident of being a ‘partner of choice’ for the government, its enterprises as well as all other stakeholders in fulfilling their financial aspirations in the most seamless manner,” said Soumitra Sen, Head of Consumer Bank at IndusInd Bank.
As an empanelled agency bank, the lender can now be authorised to handle transactions pertaining to:
revenue receipts under CBDT, CBIC & GST on behalf of the state/Central government; pension payments on behalf of state/ Central government; work related to small savings schemes; collection of stamp duty charges; collection of stamp duty from citizens for franking of documents; collection of state taxes such as professional tax, VAT and state excise on behalf of various state governments.
The private sector lendor has 2,015 branches and banking outlet besides 2,872 ATMs spread across the country. It also has representative offices in London, Dubai and Abu Dhabi.

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