RBI raises minimum capital requirement for ARCs, widens scope of their activity

Dec 09, 2022

The Reserve Bank of India has raised the minimum capital requirement for asset reconstruction companies (ARC) and widened the scope of their activities by allowing them to act as resolution applicants under the bankruptcy law backpedaling from its previous defiance on the matter.

These are crucial parts in the revised set of rules for ARCs that the regulator unveiled Tuesday with an aim to improve their regulatory framework and strengthen their governance standard

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RBI issues consolidated guidelines on unhedged foreign currency exposure

Dec 09, 2022 

The Reserve Bank on Tuesday modified and consolidated guidelines for banks on unhedged foreign currency exposures of any entity to prevent losses due to heightened volatility in the forex market.The RBI has, from time to time, issued several guidelines, instructions and directives to the banks on Unhedged Foreign Currency Exposure (UFCE) of the entities, which have borrowed from banks.

In the wake of a bank seeking clarification on various aspects related to UFCE, the RBI said a comprehensive review of the extant guidelines has been undertaken and all the existing instructions on the subject have been consolidated.These instructions shall come into force from January 1, 2023, it said in a circular.

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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 consolidated guidelines on unhedged foreign currency exposure

Dec 09, 2022 

The Reserve Bank on Tuesday modified and consolidated guidelines for banks on unhedged foreign currency exposures of any entity to prevent losses due to heightened volatility in the forex market.The RBI has, from time to time, issued several guidelines, instructions and directives to the banks on Unhedged Foreign Currency Exposure (UFCE) of the entities, which have borrowed from banks.

In the wake of a bank seeking clarification on various aspects related to UFCE, the RBI said a comprehensive review of the extant guidelines has been undertaken and all the existing instructions on the subject have been consolidated.These instructions shall come into force from January 1, 2023, it said in a circular.

Corporate Laws

RBI issues consolidated guidelines on unhedged foreign currency exposure

Dec 09, 2022 

The Reserve Bank on Tuesday modified and consolidated guidelines for banks on unhedged foreign currency exposures of any entity to prevent losses due to heightened volatility in the forex market.The RBI has, from time to time, issued several guidelines, instructions and directives to the banks on Unhedged Foreign Currency Exposure (UFCE) of the entities, which have borrowed from banks.

In the wake of a bank seeking clarification on various aspects related to UFCE, the RBI said a comprehensive review of the extant guidelines has been undertaken and all the existing instructions on the subject have been consolidated.These instructions shall come into force from January 1, 2023, it said in a circular.

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