Rbi

Representative image The Reserve Bank of India on September 9 imposed a monetary penalty on Indiabulls Commercial Credit, Industrial Bank of Korea and Woori Bank for not complying with norms. The banking regulator has imposed a penalty of Rs 12.35 lakh on Indiabulls Commercial Credit for non-compliance with certain provisions pertaining to Know Your Customer (KYC), the RBI said in a press release. An inspection report of the RBI revealed the company’s failure to allot Unique Customer Identification Code (UCIC) to its individual customers and carry out categorisation of customers based on its assessment and risk perception, it said. Additionally, the RBI has also penalised Industrial Bank of Korea with Rs 36 lakh for failing to put in place a system of periodic review of risk categorisation of accounts, the central bank said in another release. The regulator has also imposed a monetary penalty of Rs 59.10 lakh on Woori Bank, as it did not report information on the Central … [Read more...] about RBI penalises Indiabulls Commercial Credit, 2 foreign banks for rule violation

The introduction of data minimisation norms will go a long way in boosting customer confidence and trust in digital lending platforms. Recently, the Reserve Bank of India (RBI) issued the ‘ Guidelines on Digital Lending ’ to banks and non- banking financial companies (NBFCs), which disburse loans through digital lending platforms. This follows the press release issued by the RBI on the implementation of the recommendations of the working group set up by the RBI last year to study the market practices followed in the digital lending industry. Fintech companies, which operated digital lending platforms offered unique credit products which were tailor-made to the requirements of a specific user base. These platforms gained popularity in a short span of time, especially in the aftermath of the COVID-19 lockdowns imposed by the government. Such platforms used alternative data for credit assessment and devised completely digital customer onboarding and loan disbursement processes. … [Read more...] about RBI Guidelines | A new age for digital lending in India

The Reserve Bank of India (RBI) on August 29 announced that it is considering setting up a database of websites, phone numbers and various other instruments used for digital fraud. However, it has not been clarified by when the registry will be launched. 1 What is the purpose of the fraud registry? It is aimed at ensuring that fraudulent activities in the banking sector are minimised by blacklisting identified websites or phone numbers, RBI executive director Anil Kumar Sharma said on September 12. Payments system participants will be provided access to this registry for near-real-time fraud monitoring. The aggregated fraud data will be published to educate customers on emerging risks. “Protection of customer and business data has always been a crucial enabler to the smooth functioning of the online ecosystem. This is especially true in light of the evolving trends in cybercrime. As we accelerate towards a digital economy, data breaches have also increased manifold, … [Read more...] about MC Explains| What is RBI’s fraud registry? 5 key questions answered

Representative image The Reserve Bank of India (RBI) on September 12 imposed a monetary penalty of Rs 25 lakh on Mumbai-based G S Mahanagar Co-operative Bank for violating norms pertaining to maintenance of deposit accounts. An assessment report of the RBI revealed that the bank had levied penal charges for non-maintenance of minimum balance in savings bank accounts without notice to the customers and without providing one-month time for restoration of the minimum balance in the accounts, the banking regulator said in a statement. Further, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed for contravention of the RBI directions, said the central bank. After considering the bank’s reply to the notice, the additional submissions made by it and the oral submissions made during the personal hearing, the RBI came to the conclusion that the charge of non-compliance was substantiated and warranted imposition of monetary penalty, … [Read more...] about RBI penalises G S Mahanagar Co-operative Bank for rule violation

Economists expect a 50 basis points (bps) rate hike in the upcoming policy meeting of the Reserve Bank of India (RBI) with August CPI inflation rising to 7 per cent year-on-year (YoY) from 6.7 per cent YoY in July. The expected rate hikes and inflation crossing 7 per cent indicate that economic activity might remain upbeat but there will be some challenges in the economic recovery in the coming months, say economists. “Notwithstanding the undershooting in the GDP growth relative to the MPC’s projections for Q1 FY2023, and the expectation of a slightly lower-than-projected CPI inflation print for Q2 FY2023, we now foresee a higher likelihood that the MPC will stick to the new normal rate hike of 50 bps in its September 2022 meeting, with the headline inflation having reversed to 7 per cent in August 2022," said Aditi Nayar, Chief Economist, ICRA. Rate hike and Indian economy Some aspects of economic activities like investment demand and borrowing cost are likely to get … [Read more...] about Another round of rate hike by RBI may threaten economic recovery, say economists

(Representative Image) In a big push for India’s lending ecosystem, the market regulator Securities Exchange Board of India (SEBI) said in a circular that it has joined the Reserve Bank of India’s (RBI’s) Account Aggregator framework by allowing depositories, asset management companies (AMCs) and mutual fund houses to become financial information providers or FIPs. “The FIPs in the securities market will provide the Financial Information, as specified in Clause 3(ix) of the RBI Master Directions, to the customers and financial information users who furnish the consent artifact through any of the Account Aggregators registered with RBI,” SEBI said in a circular dated August 19. Touted as the UPI moment for lending, the AA framework ensures quick data sharing with the consent of the user and eliminates the need for physical documents. AAs are licensed by the RBI to enable the flow of data between Financial Information Providers (FIPs) and Financial Information Users … [Read more...] about Sebi joins RBI’s Account Aggregator framework to ease access to financial information

All good things, as they say, must come to an end. For close to four years, including the last two COVID-19-hit years since March 2020, when home loan rates touched 15-year-low s , borrowers have enjoyed a benign interest rate regime. But now they have to make peace with the rising interest rate cycle. On May 4, the Reserve Bank of India (RBI) started withdrawing the accommodative measures introduced during the pandemic with a 40-basis point (bp), unscheduled repo rate hike (one basis point = 0.01 percentage point). On Monday, RBI Governor Shaktikanta Das announced another steep increase of 50 bps , to take the repo rate to 4.9 percent. Home loan borrowers will start feeling the pinch of the latest hike once their banks reset their repo-rate-linked lending rates (RLLR). So, if your current home loan rate is 7.05 percent—up from 6.65 percent before the May rate hike took effect—it will go up to 7.55 percent. All retail floating-rate loans sanctioned after October … [Read more...] about RBI raises rate: Part-prepayment, higher EMI to keep your home loan interest outgo in check

Individual borrowers are set to feel the heat of higher interest rates, with Reserve Bank of India (RBI) governor Shaktikanta Das announcing a massive 50-basis point hike in repo rate on August 5. This is the third repo rate hike in this financial year, starting with the unscheduled revision of 40 bps (one basis point is 0.01 percentage point) in May 2022. With the latest move, which aims to curb inflation, the cumulative repo rate hike between May and August now amounts to 140 basis points. All floating-rate retail loans sanctioned by banks after October 1, 2019 are linked to an external benchmark, which is the repo rate in most cases. The latest round of hike will be fully passed on to retail borrowers in the days to come. The effect of the repo rate hike would be felt across all categories of loans, both secured and unsecured. Also read: RBI hikes repo rate by another 50 bps, so what's next? Home loan borrowers worst hit Close Home loan borrowers … [Read more...] about RBI hikes repo rate by 50 bps: EMIs to shoot up for borrowers, interests to rise for depositors

RBI Governor Shaktikanta Das. (File photo) There were no surprises on Friday. Every single economist and his neighbour had predicted a rate hike. And, Reserve Bank of India (RBI) Governor Shaktikanta Das just confirmed it. A 50 basis point (bp) hike in repo rate shows the singular focus on inflation of the monetary policy committee (MPC). One bp is one hundredth of a percentage point. With this, the MPC has hiked the repo rate - at which the RBI lends short term funds to banks - by a total of 140 bps in the current rate hike cycle. The obvious question first: Why did the MPC go for a third consecutive rate hike today? Answer is simple; both the government and the monetary policy makers are puzzled by such high retail inflation that is hurting all walks of life. And that's unlikely to change in the foreseeable future. The key takeaway from Das's speech today is that high inflation could destablise the economy. Also, don't miss the emphasis on the withdrawal of … [Read more...] about RBI Monetary Policy | Another 50 basis point hike done. So, what comes next?

Representative image. Recently, the Reserve Bank of India (RBI) issued new guidelines for the use of the Pre-Paid Instruments (PPI) . Essentially, it prohibited lenders from linking these instruments to a credit line issued by them to a customer. With these regulations, the RBI has effectively put an end to the so-called Buy Now Pay Later (BNPL) schemes offered by some non-banking lenders linked to customer purchases on electronic retail platforms. This is a welcome step, and the RBI has proactively intervened to stop a potentially dangerous unsecured credit bubble from building up in the financial system. The PPIs are essentially payment instruments that are meant to facilitate easy electronic payments, especially for customers who do not have access to other more commonly used modes of payments — credit and debit cards. The PPIs were never intended to be nor regulated as a ‘store of value’ like a bank deposit. Customers could preload these instruments from their bank accounts … [Read more...] about Buy Now Pay Later | RBI’s timely move will check explosive growth of unsecured credit