Acceptance of coins

Reserve Bank continues to receive complaints about non-acceptance of coins by bank branches. Therefore, it has mandated all banks to direct all branches to accept coins of all denominations tendered at their counters either for exchange or for deposit in accounts.

It is further advised that coins, particularly, in the denominations of ₹ 1 and 2, can be accepted by weighing. However, accepting coins packed in polythene sachets of 100 each could also be preferred. Such sachets may be made available to the customers. A notice to this effect is to be displayed inside as well as outside the branch premises.

Coins may be remitted to the currency chests as per the existing procedure. This stock should be utilised for the purpose of re-circulation. In case the stocks of reach beyond the holding capacity of the currency chest, the Issue Department of the Circle may be approached for remittance of coins.

The Controlling Offices of the bank should pay surprise visits to the branches and report the position of compliance to the Head Office. The reports should be reviewed at the Head Office and prompt remedial action taken, wherever necessary.

Any non-compliance in this regard shall be viewed as violation of instructions issued by the Reserve Bank of India and action including penal measures may be initiated.

Based on RBI circular dated 15^th Feb 2018. For any further clarification in the matter, please visit www.rbi.org.in ............... Poppy

Levy of Penal Interest – Delayed Reporting

Presently, penal interest is levied for all cases where the bank has enjoyed “ineligible” credit in its current account with the RBI on account of wrong, delayed or non-reporting of transactions.

However, instances of delayed reporting where the currency chest had “net deposit”, are being dealt with differently by Issue offices due to absence of clear instructions on the subject.

It has now been decided that, penal interest for delayed reporting where the currency chest had reported “net deposit” may not be charged.

However, a flat penalty of ₹ 50,000 may be levied for delayed reporting as in the case of wrong reporting of soiled note remittances to RBI or diversions shown as “Withdrawal”.

The revised instructions would come into effect from 9^th Feb 2018.

Based on RBI circular dated 9^th Feb 2018. For any further clarification please refer www.rbi.org.in

Basel III Framework on Liquidity Standards - Amendment

Existing

Level 1 assets will include the following and can be included in the stock of liquid assets without any limit or haircut: i. Cash including cash reserves in excess of required CRR. ii. Government securities in excess of the required SLR. iii. Within the SLR requirement, Government securities to the extent allowed by RBI, under MSF. Marketable securities issued or guaranteed by foreign sovereigns satisfying all the following conditions: (a) assigned a 0% risk weight under the Basel II standardized approach for credit risk; (b) Traded in large, deep and active repo or cash markets, characterised by a low level of concentration; and proven record as a reliable source of liquidity in the markets (repo or sale) even during stressed market conditions. (c) Not issued by a bank/financial institution/ NBFC or any of its affiliated entities.

Amended

Level 1 assets of banks would include the following and can be included in the stock of liquid assets without any limit or haircut: i. Cash including cash reserves in excess of required CRR.    For banks incorporated in India,          Reserves held with foreign Central Banks in excess of the reserve requirement, where the country has been assigned a 0% risk weight as per rating by an international rating agency.           Such reserves, to the extent these balances cover the bank’s stressed net cash outflows in that currency, where a country has not been assigned a 0% risk weight, but a 0% risk weight has been assigned at national discretion under Basel II Framework. ii. Government securities in excess of the required SLR. iii. Within the mandatory SLR requirement, Government securities to the extent allowed by RBI, under MSF. iv. Marketable securities issued or guaranteed by foreign sovereigns satisfying all the following conditions: (a) assigned a 0% risk weight under the Basel II standardized approach for credit risk; (b) Traded in large, deep and active repo or cash markets characterised by a low level of concentration; and proven record as a reliable source of liquidity in the markets (repo or sale) even during stressed market conditions. (c) Not issued by a bank/financial institution/NBFC or any of its affiliated entities.

Based on RBI circular dated 2/08/17. For further clarification please refer www.rbi.org.in ..............Poppy