Highlights of RBI in the Month of January 2022

RBI approved Fino Payments Bank for commencing international remittance business under the Money Transfer Service Scheme (MTSS).

• Remittances are an important source of family and national income and also are one of the largest sources of external financing. Beneficiaries in India can receive cross-border inward remittances through banking and postal channels. The International Financial System (IFS) platform of Universal Post Union (UPU) is generally used for the postal channel.
•  Besides, there are two more channels for receiving inward remittances, viz. Rupee Drawing Arrangement (RDA) and Money Transfer Service Scheme (MTSS) which are the most common arrangements under which the remittances are received into the country.
• Money Transfer Service Scheme (MTSS) is a way of transferring personal remittances from abroad to beneficiaries in India

2. RBI issued a framework for facilitating small-value digital payments in offline mode to push digital transactions in rural and semi-urban areas with total limit of offline payment transaction Rs 2,000 at any point in time and upper limit is at Rs 200. 

• • An offline digital payment means a transaction which does not require internet or telecom connectivity. 
  • Under this new framework, such payments can be carried out face-to-face (proximity mode) using any channel or instrument like cards, wallets, mobile devices, etc. Such transactions would not require an Additional Factor of Authentication (AFA). Since the transactions are offline, alerts (by way of SMS and / or e-mail) will be received by the customer after a time lag

3. RBI granted second schedule payment bank status to Airtel Payments Bank under RBI Act, 1934 and became the 4th Payment Bank to receive this status.

• • Other payments banks that have been added to the Second Schedule include Fino Payments Bank, Paytm payments bank and India Post Payments Bank.
  • It helps bank to expand its financial services operations as this makes it eligible to partner in government-run financial inclusion schemes.

4. RBI introduced the market-making scheme to promote retail participation in Government Securities (G-Secs) by providing prices/quotes to Retail Direct Gilt Account Holders (RDGAHs) enabling them to buy/sell securities under the RBI Retail Direct (RBI-RD) Scheme.

• • Retail Direct scheme is a one-stop solution to facilitate investment in Government Securities by Individual Investors. Under this scheme Individual Retail investors can open Gilt Securities Account – “Retail Direct Gilt (RDG)” Account with the RBI. It was launched on November 12, 2021

5. RBI announced that State Bank of India (SBI), Industrial Credit and Investment Corporation of India(ICICI) and Housing Development Finance Corporation Limited(HDFC) banks will continue to be identified as Domestic Systemically Important Banks (D-SIBs). 

• • The Reserve Bank had announced SBI and ICICI Bank as D-SIBs in 2015 and 2016. HDFC Bank was also classified as a D-SIB in 2017. The d-sib framework came in 2014. Sbi is bucket 3 D-Sib, HDFC and ICICI As bucket 1 d-sib.

6. RBI released the eligibility criteria for entities to be categorised as ‘Specified User’ of Credit Information Companies (CICs) under Regulation 3(j) of the CICs (Amendment) Regulations, 2021. 

• The company should be incorporated in India or a Statutory Corporation constituted in India
• a company’s net worth must be at least two crore rupees as of the most recent audited balance sheet, and it must meet the criterion on a continuous basis.
• The corporation must have at least three (3) years of experience in the business/activity of processing information for the assistance or benefit of credit institutions, as well as a clean track record

7. RBI increased the threshold limit for Banks to maintain the Liquidity Coverage Ratio (LCR) on deposits and other ‘extension of funds’ received from non-financial small business customers from Rs 5 crore to Rs 7.5 crore. 

• • all commercial banks (other than regional rural banks, local area banks and payments banks) 
  • LCR promotes short-term resilience of banks to potential liquidity disruptions by ensuring that they have sufficient high quality liquid assets (HQLAs) to survive an acute stress scenario lasting for 30 days.

8. RBI sets up a separate internal department for fintech (Financial technology) by subsuming the fintech division of DPSS (department of payment and settlement systems), Central Office (CO). to facilitate innovation headed by Ajay Kumar Choudhary. 

9. RBI released the Annual Report of the Ombudsman Schemes for 2020-21(July 1, 2020, to March 31, 2021), stated that the volume of complaints received under all the 3 Ombudsman Schemes increased by 22.27% on an annualized basis and stood at 3,03,107. 

• • • The Annual Report covers the activities under the Banking Ombudsman Scheme, 2006 (BOS), the Ombudsman Scheme for Non-Banking Financial Companies, 2018 (OSNBFC) and the Ombudsman Scheme for Digital Transactions, 2019 (OSDT)

10. RBI released the RBI – Digital Payments Index (RBI-DPI) for September 2021 and it states that the digital payments increased by 39.64 percent to 304.06 as against 217.74 in September 2020.

• • • The RBI-DPI comprises of 5 broad parameters that enable the measurement of the deepening and penetration of digital payments in the country over different time periods. These parameters are – (i) Payment Enablers (weight 25%), (ii) Payment Infrastructure – Demand-side factors (10%), (iii) Payment Infrastructure – Supply-side factors (15%), (iv) Payment Performance (45%) and (v) Consumer Centricity (5%).

11. RBI) permits all existing non-deposit taking Non-Banking Finance Company-Investment and Credit Companies (NBFC-ICCs) with asset size of Rs 1,000 crore and above to undertake factoring business. 

• • • Factoring is a transaction in which an entity (usually MSME or small business) can sell its receivables (dues from customers) to another entity—a factor—such as an NBFC to fulfil immediate working capital or cash flow requirements that otherwise gets hampered due to payment delays.

12. RBI conducted an Overnight variable rate reverse repo (VRRR) auction for Rs 50,000 crore on January 20, 2022 and on 24th January 2022, RBI offered overnight liquidity to the banking system of India with Rs 75,000 crore against banks bid of around Rs 1.37 lakh crore through variable rate repo (VRR) auction under liquidity Adjustment Facility (LAF). 

13. Other notification:

•  RBI on considering the present liquidity position of Deccan Urban Cooperative Bank Ltd., has imposed a withdrawal cap of Rs 1,000 on the customers of the bank

• • RBI extended the validity of its directions by 4 months for Sri Guru Raghavendra Sahakara Bank Niyamitha, Bengaluru (Karnataka) i.e. till May 10, 2022. 
  • RBI imposed several restrictions on Indian Mercantile Cooperative Bank Limited, Lucknow, Uttar Pradesh including a cap of Rs 1 lakh on withdrawals.

• RBI announced the Government of India’s approval for the amalgamation of the Punjab and Maharashtra Co-operative Bank (PMC Bank) with Unity Small Finance Bank Limited (USFBL), the 12th small finance bank (SFB) of India

Highlights of RBI in the Month of January 2022 in Hindi