Ratings devoid of lenders detail should be treated as unrated exposure: RBI

·         Dec 14, 2022 

In a move that may put pressure on the capital adequacy of banks, the Reserve Bank of India (RBI) on Monday said loan ratings without information about lenders’ details should be treated as unrated exposure.
Capital should be set aside using risk weightings applicable for unrated exposure to companies and non-banking finance

companies.
The RBI said these instructions would be effective on March 31, 2023. Thus, any burden on account of higher capital charges will be in the current financial year (FY23).
The press releases (PRs) issued by external credit assessment institutions (ECAI) on ratings often do not have lenders’ details.

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India Inc expects another 35-50 basis points policy rate hike by RBI

Sep 23, 2022

India Inc is bracing itself for yet another policy rate hike by the RBI Monetary Policy Committee in the range of 35-50 basis points as the move seems unavoidable in the wake of the global monetary tightening to limit the impact of inflation, ASSOCHAM has said. The chamber has sought a balanced and smooth transition to the new trajectory for borrowing costs.

Seeking several measures for ensuring that adequate liquidity is maintained within the system, the ASSOCHAM has said '' 35-50 bps rate hike seems imminent and inevitable while the MPC may leave the CRR and SLR rates unchanged''.

ASSOCHAM president Mr Sumant Sinha said while 35-50 bps increase in the benchmark rates seems unavoidable at this point of time given the continuous monetary tightening by the US Federal Reserve and other central banks. He however noted that economic activity is at robust levels. “India is in a sweet spot with growth coming from all quarters and inflation is relatively in control. Softening of crude prices will augur well for the economy and we should start the interest rate cut cycle from early part of FY24.”

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RBI may establish fraud registry to check bank frauds

  Aug 30, 2022

The Reserve Bank of India is looking forward to establishing a fraud registry to compile a database of dubious websites, phones, and other digital fraud methods as part of its attempts to increase client safety.

According to RBI executive director Anil Kumar Sharma, such a database will assist to stop these fraudsters from committing the same fraud because the websites or phone numbers will be blacklisted.
"There is no definite timeline for setting up of the fraud registry. At present, we are talking to different stakeholders including different departments like payments and settlement and supervision of RBI," Sharma revealed.

Users in the payment system will have access to this registry for almost real-time fraud monitoring. To inform clients about new hazards, the aggregated fraud data will be made public.

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Aug 12, 2022

RBI Digital Lending Rules: The Reserve Bank of India (RBI) has issued strict guidelines for digital lending in the country. Borrowers are set to benefit from the new RBI guidelines directed at curbing rampant malpractices in the digital lending ecosystem.

The RBI has issued the guidelines based on recommendations of a working group for digital lending which submitted its report in November 2021. You can read more details of the guidelines issued by the RBI here. In this article, we take a look at what the borrowers should know before going for a loan in view of the new lending norms issued by the RBI.

Legal experts say that borrowers should know the safeguards assured by the RBI’s new regulatory framework for digital lending.

“These norms were required to protect the interest of the borrowers and to ensure that the money cycle is taking place through legitimate apps with proper KYC structure and audit mechanism as a lot number of fake applications are being reported and the end user incur losses.

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RBI issues two circulars: Transition to CoF, payment aggregator norms to be eased

Jul 29, 2022

The Reserve Bank of India (RBI) on Thursday released guidelines to ease the transition to new norms on card-on-file (CoF) tokenisation and licensing of payment aggregators (PAs) in two separate notifications.

While reiterating that with effect from October 1, no entity in the card transaction chain, other than card issuers and card networks, shall store CoF data, the central bank notified two interim measures. Other than the card issuer and the card network, the merchant or its PA involved in settlement can save the CoF data for a maximum period of four days after the transaction date or till the settlement date, whichever is earlier. This data shall be used only for settlement of such transactions, and must be purged thereafter, the RBI said.

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Digital lending entities should only carry out activities for which they have licenses: Shaktikanta Das

Jul 23, 2022

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said digital lending players should only carry out activities for which they have licenses and violations are not acceptable.

Last month, RBI had asked non-bank Prepaid Payment Instrument (PPI) issuers not to load their wallets and cards from credit lines or preset borrowing limits.
“The (digital lending) firms should operate under the licenses granted to them. If they are doing anything beyond that then they should seek our permission.

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Reserve Bank implementing central digital currency in phases: RBI executive director Ajay Kumar Choudhary

Jul 21, 2022

The Reserve Bank of India is in the process of implementing the Central Bank Digital Currency (CBDC) in a phased manner for the wholesale and retail segments, said its executive director. The CBDC will be a sovereign-backed digital currency.

Passage of the Finance Bill 2022 has enabled RBI to conduct a pilot and subsequent issuance of CBDC, Choudhary while delivering a keynote address at 'PICUP Fintech Conference & Awards' by industry association FICCI on Wednesday.

Choudhary said RBI has fostered innovation and it is keeping a close eye on the benefits and risks associated with innovative products and services offered by fintechs. "The challenge for policymakers is to maximise the benefits of fintech while minimising the potential risk," he said.

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RBI says products of 4 entities viable for cross border payments under regulatory sandbox

Jul 20, 2022

Products offered by four entities for ‘cross border payments’ have been found viable by the Reserve Bank of India (RBI) after they completed the test phase under the regulatory sandbox scheme.

Regulatory sandbox usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain relaxations for the limited purpose of the testing.

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