1. In the case of term deposit standing in the name/s of a deceased individual depositor, or two or more joint depositors, where one of the depositor has died, the criterion for payment of interest on matured deposits in the event of death of the depositor in the above cases has been left to the discretion of individual banks subject to their Board laying down a transparent policy in this regard.

2. In the case of balances lying in current account standing in the name of a deceased individual depositor/ sole proprietorship concern, interest should be paid only from May 1, 1983 or from the date of death of the depositor, whichever is later, till the date of repayment to the claimant/s at the rate of interest applicable to savings deposit as on the date of payment. However, in the case of NRE deposit, if the claimants are residents, the deposit on maturity is treated as domestic rupee and interest is paid for the subsequent period at a rate applicable to the domestic deposit of similar maturity.

Ans.: If the responding entity does not have any portfolio investment asset during the reference period, then that entity is required to submit NIL survey schedule to the generic email ID of the Reserve Bank as per the instruction in the survey schedule.

Yes, it is possible to have two or more banknotes with the same serial number, but they would either have a different Inset Letter or year of printing or signature of a different Governor of RBI. An Inset Letter is an alphabet printed on the Number Panel of the banknote. There can be notes without any inset letter also.

Ans: Banks can submit their request for exercising the repayment option till October 28, 2020. On repayment of funds availed under TLTRO/ TLTRO 2.0, the associated securities shall be shifted out of the HTM category. The shifting of the TLTRO/ TLTRO 2.0 investments out of HTM shall be in addition to the shifting of investments permitted at the beginning of the accounting year and subject to adherence to the guidelines contained in the Master Circular – Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks dated July 1, 2015. These investments under TLTRO/ TLTRO 2.0 against which funds are being repaid will not be exempted from reckoning under the large exposure framework (LEF) and computation of adjusted non-food bank credit (ANBC) for the purpose of determining priority sector targets/sub-targets.

Ans: Yes, CICs presently registered with the Bank but fulfilling the criteria for exemption under Notification No 220 dated January 05, 2010 can seek voluntary deregistration. Both audited balance sheet and auditors certificate are required to be submitted for the purpose.

All the Rated Companies have been allowed 3 years’ time to regularise their excess deposits by repayment or otherwise. During this period, while a company can accept fresh deposits and renew such maturing deposits subject to reducing the excess holding of public deposits by one-third at the end of every calendar year beginning December 1998. However in such a case, the company should not exceed the level of public deposits outstanding as at the close of business on January 1, 1998. The unrated and underrated NBFCs are not entitled to accept fresh deposits.

Ans: Shares issued by reporting entities to non-resident on non-repatriable basis should not be considered as foreign investment; therefore, entities which have issued the shares to non-resident only on non-repatriable basis, is not required to submit the FLA return.

All aspects concerning renewal of overdue deposits may be decided by individual banks subject to their Board laying down a transparent policy in this regard and the customers being notified of the terms and conditions of renewal including interest rate, at the time of acceptance of deposit. The policy should be non-discretionary and non-discriminatory.

Ans.: If the entity’s accounts are not audited before the due date of submission, then they should report in the survey based on unaudited (provisional) account.

With a view to enhancing operational efficiency and cost effectiveness in banknote printing, non-sequential numbering was introduced in 2011 consistent with international best practices. Packets of banknotes with non-sequential numbering contain 100 notes which are not sequentially numbered.

Ans: Banks can use either of the alternatives. However, the request of the bank will be subject to availability of funds as on date of application i.e., funds cannot be guaranteed in case the total amount of ₹1,00,000 crore is already availed.

A. A company not complying with prudential norms cannot accept public deposits.

Ans: No, balance sheet or profit and loss (P&L) accounts are not required to be submitted along with the FLA return.

Banks have freedom to fix the rate of interest chargeable on loans and advances against FCNR(B) deposits to the depositors without reference to their Benchmark Prime Lending Rate (BPLR) irrespective of whether repayment is made in Rupees or Foreign Currency.

Ans: CICs having asset size of below Rs 100 crore are exempted from registration and regulation from the Reserve Bank, except if they wish to make overseas investments in the financial sector.

Ans: Equity consists of all instruments and records that acknowledge claims on the residual value of a corporation or quasi-corporation, after the claims of all creditors have been met. Equity may be split into listed shares, unlisted shares, and other equity. Both listed and unlisted shares are equity securities. Equity securities are commonly called shares or stocks. Other equity is equity that is not in the form of securities.

Ans: CICs are prohibited from contributing capital to any partnership firm or to be partners in partnership firms including Limited Liability Partnerships (LLPs) or any association of person similar in nature to partnership firms.

Fresh banknotes issued by Reserve Bank of India till August 2006 were serially numbered. Each of these banknote bears a distinctive serial number along with a prefix consisting of numerals and letter/s. The banknotes are issued in packets containing 100 pieces.

The Bank adopted the "STAR series" numbering system for replacement of defectively printed banknote in a packet of 100 pieces of serially numbered banknotes. The Star series banknotes are exactly similar to the other banknotes, but have an additional character viz., a *(star) in the number panel in the space between the prefix.

The objective of exempting the intercorporate deposits from the purview of Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 is that the corporate bodies whether a shareholder or a non-shareholder should be able to appraise the loan proposals and ensure the safety of the funds lent. Hence, such loans will be treated as ICDs.

Ans: Entities can submit the FLA return through the online web-based portal Foreign Liabilities and Assets Information Reporting (FLAIR) system, having address https://flair.rbi.org.in/fla/faces/pages/login.xhtml.

• To access the URL https://flair.rbi.org.in/fla/faces/pages/login.xhtml, any of the browsers viz, Internet Explorer, Google chrome, Firefox etc. can be used, as all of these would support this application.

• The entity has to register on the portal by clicking Registration for New Entity Users.

• The entity has to fill the details in the FLA user registration form, upload the documents mentioned (Verification Letter and Authority Letter) and click submit to complete the registration.

• After successful registration, user id and default password will be sent to the authorized person’s mail id. Using this user id and password, entities can login to the FLAIR portal and file the FLA Return.

• Please note: The excel-based format and email-based reporting system has been replaced by the web-based format for submission of annual FLA return from June 2019.

No. Banks cannot accept recurring deposits under FCNR(B) Scheme.

Ans: The following are included under equity securities:

• Ordinary shares.

• Stocks.

• Participating preference shares.

• Shares/units in mutual funds and investment trusts

• Depository receipts (e.g., American Depository Receipts) denoting ownership of equity securities issued by non-residents.

• Securities sold under repos or “lent” under securities lending arrangements.

• Securities acquired under reverse repos or securities borrowing arrangements and subsequently sold to a third party should be reported as a negative holding.

Ans: The term used in the CIC circulars is block sale and not block deal which has been defined by SEBI. In the context of the circular, a block sale would be a long term or strategic sale made for purposes of disinvestment or investment and not for short term trading. Unlike a block deal, there is no minimum number/value defined for the purpose.

In terms of Section 25 of the RBI Act, the design, form and material of bank notes shall be such as may be approved by the Central Government after consideration of the recommendations made by Central Board.

The scheme of reverse mortgage has been introduced recently for the benefit of senior citizens owning a house but having inadequate income to meet their needs. Some important features of reverse mortgage are:

• A homeowner who is above 60 years of age is eligible for reverse mortgage loan. It allows him to turn the equity in his home into one lump sum or periodic payments mutually agreed by the borrower and the banker.
  
  
• The property should be clear from encumbrances and should have clear title of the borrower.
  
  
• NO REPAYMENT is required as long as the borrower lives, Borrower should pay all taxes relating to the house and maintain the property as his primary residence.
  
  
• The amount of loan is based on several factors: borrower’s age, value of the property, current interest rates and the specific plan chosen. Generally speaking, the higher the age, higher the value of the home, the more money is available.
  
  
• The valuation of the residential property is done at periodic intervals and it shall be clearly specified to the borrowers upfront. The banks shall have the option to revise the periodic / lump sum amount at such frequency or intervals based on revaluation of property.
  
  
• Married couples will be eligible as joint borrowers for financial assistance. In such a case, the age criteria for the couple would be at the discretion of the lending institution, subject to at least one of them being above 60 years of age.
  
  
• The loan shall become due and payable only when the last surviving borrower dies or would like to sell the home, or permanently moves out.
  
  
• On death of the home owner, the legal heirs have the choice of keeping or selling the house. If they decide to sell the house, the proceeds of the sale would be used to repay the mortgage, with the remainder going to the heirs.
  
  
• As per the scheme formulated by National Housing Bank (NHB), the maximum period of the loan period is 15 years. The residual life of the property should be at least 20 years. Where the borrower lives longer than 15 years, periodic payments will not be made by lender. However, the borrower can continue to occupy.
  
  
• From FY 2008-09, the lump sum amount or periodic payments received on reverse mortgage loan will not attract income tax or capital gains tax.

Note- Reverse mortgage is a fixed interest discounted product in reverse. It does not take into account the changes in interest rates as yet.

Important – This part is fine printed to help you practice reading the fine print. The loan agreement documentation runs into nearly 50 pages and its language is complex. If you thought everyone signs the same agreements with the bank, where is the need to read? You are not taking an informed decision. If you thought somebody would have pointed this to me if there was any problem, then maybe they did but you could not read or listen to it. Think again! Borrowers' and lenders' rights may not be expressed clearly in a transparent manner in all the loan agreements. The home loan agreement may not be provided to you in advance so that this could be read and understood before you sign the agreement. Every method may be used to delay handing over a copy to the borrower in sufficient time. Some areas you may focus are a) check the “reset clause” incorporated by some banks in their home loan agreements that allows them to change the interest rate in the future, even on fixed rate loans. Banks may set their reset clauses for 3 or 2 year intervals.  They say a lender cannot have an agreement that a fixed rate is set for the entire tenure of 15 to 20 years as this will cause an asset-liability mismatch. Talk to your bank. b) Please seek clarifications on the term “exceptional circumstances” (if stated in the loan agreement) under which loan rates can be unilaterally changed by your bank. c) A common person thinks that default ideally means non-payment of one or more loan installments. In some loan documentation it can include divorce and death (in individual case) and even involvement in civil litigation or criminal offence. d) Does the loan agreement say that disbursement of the loan may be made directly to the builder or developer and in the case of a ready-built property to the vendor thereof and/or in such other manner as may be decided solely by bank? It is the borrower whose original property papers are retained with the bank, so why disburse to the builder. Possession of property has been  delayed in some cases when the cheque was issued in the name of the builder and the builder refused to pay delay penalty to the borrower e) Does the agreement enable assignment of your loan to a third party?  You take into account reputation and credibility of the bank before entering into a loan agreement with it. Are you comfortable with third party takes over or should you also be allowed to move your home loan from one bank to another in that case? Look for ambiguous clauses and discuss with the banker. Some agreements say changes in employment etc. have to be informed well in advance without quantifying the term “well in advance”. f) In one case the loan documentation says “issuance of pre-approval letter should not be construed as a commitment by the bank to grant the housing loan and processing fees is not re-fundable even if the home loan is not processed”. This is never ending it seems. The above are only indicative instances of what has been observed / reported/ indicated by various sources. However, our main objective was to get you into the habit of reading the fine print. If you have read this, you would have understood the importance of reading fine print in any document and we have achieved our objective. I only wish I could have made the print smaller as in the real cases.

Yes. Under the new NBFC Directions, an NBFC can accept ICDs without any ceiling subject, however, to the limit set by Capital Adequacy Norms applicable to it.

Ans: You will receive the system-generated acknowledgement of FLA data submitted by you at the time of final submission itself. No separate mail will be sent in this regard.

Board of Directors of banks have been empowered to authorize the Asset-Liability Management Committee to fix interest rates on deposits within the ceiling prescribed by RBI.

Ans: The following are not included under equity securities:

• Equity securities issued by a nonresident enterprise that is related to the resident owner of those securities should be excluded from this survey.

• Non-participating preference shares.

• Securities acquired under reverse repos.

• Securities acquired under borrowing arrangements.

Ans: No, CICs/ CICs-ND-SI cannot accept deposits. That is one of the eligibility criteria.