Tag Archives: Reserve Bank India

RBI imposes penalty on The Financial Cooperative Bank Ltd., Surat (Gujarat)

 

The Reserve Bank of India has imposed a monetary penalty of Rs 1.00 lakh (Rupees one lakh only) on The Financial Cooperative Bank Ltd., Surat (Gujarat).

The penalty was imposed by RBI, in exercise of the powers vested in it under the provisions of Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies),

The monetary penalty was for violation of the RBI instructions by exceeding the ceiling prescribed for inter-bank deposit exposure limit.

The current RBI rules for Inter-bank Exposure Limit of co-operative banks is as under

Prudential Inter-bank (Gross) Exposure Limit

2.4.1 The total amount of deposits placed by an UCB with other banks (inter-bank) for all purposes including call money / notice money, and deposits, if any, placed for availing clearing facility, CSGL facility, currency chest facility, remittance facility and non-fund based facilities like Bank Guarantee (BG), Letter of Credit (LC), etc shall not exceed 20% of its total deposit liabilities as on March 31 of the previous year.

The balances held in deposit accounts with commercial banks and in permitted scheduled UCBs and investments in Certificate of Deposits issued by commercial banks, being inter bank exposures, will be included in this 20% limit.

Prudential Inter-bank Counter Party Limit

2.4.2  Within the prudential inter-bank (gross) exposure limit, deposits with any single bank should not exceed 5% of the depositing bank’s total deposit liabilities as on March 31 of the previous year.

Unsecured Exposure Norms for UCBs – RBI’s revised guidelines

Vide RBI our circular No. UBD.BPD.(PCB) Cir No.21/13.05.000/2010-11 dated November 15, 2010 on ‘Maximum Limit on Unsecured Loans and Advances’  RBI had prescribed that that the total unsecured loans and advances granted by a UCB to its members should not exceed 10 per cent of its total assets.

To boost lending to priority sector and also to speedup the financial inclusion goal, UCBs fulfilling certain conditions laid down by RBI may, with the prior approval of the Reserve Bank, grant unsecured loans (with or without surety) upto 25% of their total assets:

The following are the pre-conditions, before the UCBs can apply to RBI.

  • The entire loan portfolio of the bank should be covered under priority sector.
  • All the loans should be sanctioned as small value loans ie upto `20,000/- in a single account.
  • The UCB should have assessed CRAR of 9%.
  • The assessed gross NPAs of the UCB should be less than 10 per cent of gross advances.
  • Financial parameters for the above purposes, may be considered as on March 31 of the previous year.
  • Assessed CRAR and gross NPAs would be as assessed by the latest inspection carried out by the Reserve Bank of India.

UCBs fulfilling the above conditions and desirous of being part of the financial inclusion drive, can approach the RBI Regional Office of UBD for permission.

 

UCBs are broadly classified into Tier I or Tier II

Tier I UCBs were defined as UCBs with:

  • Deposit base below Rs1 billion operating in a single district.
  • Deposit base below Rs1 billion operating in more than one district provided the branches were in contiguous districts, and deposits and advances of branches in one district separately constituted at least 95 per cent of the total deposits and advances, respectively, of the bank.
  • Deposit base below `1 billion, whose branches were originally in a single district but subsequently became multi-district due to re-organisation of the district.

 

All other UCBs were defined as Tier II UCBs.

RBI – Discontinuation of CFMS. Launch of eKuber.

 

Member Banks of RBI CFMS are aware that the funds transfer through Centralized Funds Management System (CFMS) has been discontinued with effect from January 1, 2013. Hence, the need for continuation of CFMS is not required any more.

This has led to RBI informing CFMS member banks with effect from April 1,2013, the facility of CFMS Helpdesk services and access to CFMS information/data will not be available.

Readers might be interested to know that the Centralized Funds Management System (CFMS), was  a system set up, operated and maintained by the Reserve Bank of India  to enable operations on current accounts maintained at various offices of the Bank, through standard message formats in a secure manner.

The following types of facilities were available through CFMS:

a) Enquiries relating to the operation of its current account/s maintained with any of the DADs

b) Funds Transfers between accounts of the same account holder at different DADs.

 

The chief reason for discontinuation of CFMS is the launch by RBI of its Core Banking Solution i.e  (E-Kuber) system. With CBS in place, it is very easy for RBI DAD account holders to operate their banking accounts with RBI. A CBS solution is also necessary for Cheque Truncation System (CTS) to succeed.

ePayment networks-RTGS and NEFT to be open on March 29, 2013 and March 31, 2013

 

Reserve Bank of India, DPSS vide Notification No Date: Mar 21, 2013, RBI/2012-13/454 DPSS.CO.CHD.No./1674/ 03.01.03/2012-2013 dt.21/03/2013, has informed Indian Banking customers that RTGS and NEFT will function on 29/03/2013 and 31/03/2013.

Yes, you are reading it right. 29/03/2013 is Good Friday, and Banks in major parts of India are closed. 31/03/2013 is Sunday. In the larger public interest, RTGS and NEFT will be open on Sunday.

This will be first occasion since the launch of RTGS that RTGS system will be open on a Sunday.

The exact working timings will be known in the next couple of days. Bank’s IT Teams will be scrambling around to ensure that their IT Applications are tuned to handle RTGS and NEFT on 29th march as well as 31st march. It will be a major challenge not only for Bank staff but also for bank customers to make full use of working window.

 

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Member banks are also advised to be in readiness to participate in the Centralised Payment Systems (RTGS and NEFT) on March 29, 2013 and March 31, 2013. A separate broadcast message in this regard will be issued through the respective system.

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Cheers to RTGS/NEFT. As it is IMPS too will be open.