Oversight of Government Business in Agency Banks

It has since been decided to put in place a new system of oversight of government business:

(a)       In addition to various branches and CPPCs, the scope of the inspection will now also cover the Head Offices of agency banks.

(b)      No reports will be issued at the end of the review/inspection. However, the offices/branches will be advised of action points.

(c)       Comments in respect of action points marked as “Major” may be submitted to the Regional Offices of the Reserve Bank.

(d)      Regarding other action points, necessary rectification may be ensured by the bank itself. This may be examined and commented upon by internal audit.

As a part of the new arrangements, it has been decided to introduce offsite monitoring of government business.

It has also been decided to have periodical interactions with senior executives dealing with government business. The agenda for discussion would broadly depend on the bank’s size and nature of government business being handled by it. The discussions would, at a minimum, include the following:

(a)  Developments since last inspection;

(b) Sustenance of compliance with the inspection report findings;

(c)  Progress in case of large frauds relating to government business;

(d) Position of  complaints;

(e)  Pension related issues;

(f)  Issues raised by Government Departments such as delays and penalties;

(g) Issues raised by the Office of C&AG and other government agencies regarding the conduct of government business by the agency bank; and

(h) Other related issues.

Based on RBI circular dated 7/4/16. For further details please refer www.rbi.org.in”.................... Poppy Sharma

Import of Rough, Cut and Polished Diamonds- Modification

AD Category - I banks are permitted to approve Clean Credit i.e. credit given by a foreign supplier to its Indian customer, without any LC/LU/FD, for import of Rough, Cut and Polished Diamonds, for a period not exceeding 180 days from the date of shipment.

It has now been decided to delegate the powers for permitting such clean credit exceeding 180 days to the AD banks, subject to:

i)          The genuineness of the transaction and no payment of interest for the additional period

ii)              The reasons for such extension are due to financial difficulties or quality disputes.

iii)            The importer requesting for such extension is not under investigation.

iv)            The importer seeking extension is not a frequent offender.

v)              AD banks may allow such extension up to 180 days, beyond which they may refer the cases to respective Regional Office of the Reserve Bank.

AD Category - I banks should ensure that due diligence is undertaken and KYC Norms and AML Standards are adhered to while undertaking import transactions. Any large or abnormal increase in the volume of business should be closely examined. All other instructions shall continue.

Based on RBI Circular dt 31/03/16. Please visit www.rbi.org.in for any further clarification if required….. Poppy

FDI in Insurance sector

It has been decided to enhance the limit of foreign investment in insurance sector from 26 to 49 percent under the automatic route

For related terms and conditions please visit https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10315&Mode=0

Based on RBI Circular dt 31/03/16. Please visit www.rbi.org.in for any further clarification if required….. Poppy

Gold Monetisation Scheme, 2015- Modification

In case of MLTGD, the redemption of principal at maturity, shall be either in the rupee equivalent of the value of deposited gold at the time of redemption, or in gold. The option will be with the depositor.

Where the redemption is in gold, an administrative charge @ 0.2% of the notional redemption amount shall be charged. However, the interest accrued shall be calculated with reference to the value of gold at the time of deposit and will be paid only in cash.

Based on RBI Circular dt 31/03/16. Please visit www.rbi.org.in for any further clarification if required….. Poppy