• Final monthly WPI will be used as reference WPI for 1st day of the calendar month. The reference WPI for intermittent days, i.e. dates between 1st days of the two consecutive months will be computed through interpolation.

• For interpolation, two months final WPI should be available throughout the month. As final WPI is available with a lag of about two and half months (e.g. final WPI February 2013 will be released in mid-May 2013), two months final WPI could be available only with a lag of four months.

• In view of above, the four months lag has been chosen for final WPI to be considered as reference WPI for 1st day of the calendar month. For example, December 2012 final WPI will be taken as reference WPI for 1st of May 2013 and January 2013 final WPI will be taken as reference WPI for 1st of June 2013.

Banks have been advised to put in place loan policies governing extension of credit facilities for the MSE sector duly approved by their Board of Directors (Refer circular RPCD.SME & NFS.BC.No.102/06.04.01/2008-09 dated May 4, 2009). Banks have, however, been advised to sanction limits after proper appraisal of the genuine working capital requirements of the borrowers keeping in mind their business cycle and short-term credit requirement. As per Nayak Committee Report, working capital limits to SSI units is computed on the basis of minimum 20% of their estimated turnover up to credit limit of ₹5 crore.

Ans. Along with the application in the prescribed format, the applicant may also furnish the details as per the Annexes- relating to Foreign Direct Investment, External Commercial Borrowings, Overseas Direct Investment and Branch Office / Liaison Office, as applicable, (annexes available in the FED Master Direction No. 18/2015-16 as mentioned in answer to Q. 4 above) along with an undertaking that they are not under investigation of any agency such as DoE, CBI, etc., duly filled ECS mandate form, a cancelled cheque copy, a copy of the Memorandum of Association and latest audited balance sheet while applying for compounding of contraventions under FEMA, 1999. Application submitted to the Reserve Bank must contain contact details i.e, name of the applicant / authorised official or representative of the applicant, telephone/ mobile number and email ID.

• On redemption, investors will get principal and compounded interest.

Answer: A person resident in India may maintain a foreign currency account outside India if he had opened it when he was resident outside India or inherited it from a person resident outside India.

Ans. Board-approved policies of REs should cover such operational aspects. One possible way could be to distribute the annualized repayment obligations over twelve months to estimate monthly outgo of the household towards debt repayment.

Answer: Any person resident outside India, having a business interest in India, can open a Special Non-Resident Rupee Account (SNRR account) with an authorised dealer for the purpose of putting through bona fide transactions in rupees which are in conformity with the provisions of the Act, rules and regulations made thereunder.

The differences between SNRR account and NRO account are:

Applicant companies should calculate their Net Owned Funds (NOF) of as per the following.

1. Owned Funds :- (Paid-up Equity Capital + Free reserves + Credit balance in Profit & Loss A/c) minus (Accumulated balance of loss, Deferred revenue expenditure and Other intangible assets)

2. Net Owned Funds :- Owned funds minus the amount of investments in shares of its subsidiaries, companies in the same group, all (other) non-banking financial companies as also the book value of debentures, bonds, outstanding loans and advances made to and deposits with its subsidiaries and companies in the same group in excess of 10 per cent of the Owned funds.

Ans. Foreign exchange for travel abroad can be purchased from an authorized person against rupee payment in cash below Rs.50,000/-. However, if the sale of foreign exchange is for the amount equivalent to Rs 50,000/- and above, the entire payment should be made by way of a crossed cheque/ banker’s cheque/ pay order/ demand draft/ debit card / credit card / prepaid card only.

Ans. All remittances are subject to payment of taxes as applicable in India – Authorised Dealers are to convince themselves on this aspect.

Ans: Individuals, firms and corporates maintaining accounts with any member bank, participating in the NEFT system, can electronically transfer funds to any individual, firm or corporate having an account with any other bank in the country participating in the NEFT system.

The list of bank-wise branches participating in NEFT is available on the website of RBI at /en/web/rbi/-/list-of-neft-enabled-bank-branches-bank-wise-indian-financial-system-code-updated-as-on-june-30-2023-2009-1.

Ans. Non-banks increasingly and actively offer financial services and direct access to CPS can enable them to leverage technology and offer more choices to their consumers.

Apart from managing settlement risk in payments landscape, expanding access and participation of non-banks is a progressive move and leads to diversity and resiliency of the payments ecosystem.

Ans. Yes, the AD bank should ensure compliance to the extant instructions issued by the Department of Banking Regulation.

Answer: The AD bank approaching RBI for seeking approval for opening of Special Rupee Vostro Account must submit the following information along with their proposal/request:

1. The details of the arrangement between AD bank and correspondent bank from the trading partner country along with the funds flow.

2. A brief write-up on the foreign banks seeking correspondent relationship for Special Rupee Vostro Account.

3. Copy of the request letter of the correspondent bank to AD bank.

4. Confirmation from AD bank that the due diligence has been carried out by AD bank which establishes correspondent banking relationship as per our extant guidelines {Master Direction - Know Your Customer (KYC) Direction, 2016 dated Feb 25, 2016) (As amended from time to time)}.

5. Confirmation from AD bank stating that the correspondent bank is not from a country or jurisdiction in the updated FATF Public Statement on High Risk & Non-Co-operative jurisdictions on which FATF has called for counter measures.

6. Confirmation from AD bank that they shall ensure that all the transactions taking place in the Special Rupee Vostro Account of the correspondent bank are strictly in adherence to the instructions given in the A.P. (DIR Series) Circular No. 10 dated July 11, 2022.

7. Financial parameters pertaining to the correspondent bank as required for the proposal may be obtained beforehand by email to fedcotrade@rbi.org.in and the same may be furnished by AD bank along with the proposal.

Ans: No.

The accredited banks are paid remuneration by RBI for conduct of State/Central Government transactions. Such remuneration is called Agency Commission. The rates of agency commission applicable at present (from July 1, 2019) are as under:

Ans: The location and addresses of NSBL and Prabhu Money Transfer are available in the Procedural Guidelines for Indo-Nepal Remittance Facility Scheme as also with the NEFT-enabled branches in India. The Procedural Guidelines for Indo-Nepal Remittance Facility Scheme are available on the website of RBI at /documents/87730/39016390/84489.pdf.

Answer: A resident nominee of an account held outside India has to close the account and bring back the proceeds to India through banking channels

Amendments to the Principal Regulations

1. Notification No. FEMA 10 (R)/(1)/2016-RB dated June 1, 2016

Reserve Bank of India (RBI) has authorised various types of payment systems to enable transfer of funds. You may refer to the following link on RBI website to get overview of various payment systems available in India:

/en/web/rbi/payment-and-settlements

Ans : Yes NBFCs and NBFC-IFCs need to take prior approval from the Reserve Bank for sponsoring IDFs.

Ans. i) Inward remittance through normal banking channels, other than remittances received on account of foreign currency loan or investment received from abroad or received for meeting specific obligations by the account holder;

ii) Payments received in foreign exchange by a 100 per cent Export Oriented Unit or a unit in (a) Export Processing Zone or (b) Software Technology Park or (c) Electronic Hardware Technology Park for supply of goods to similar such units or to a unit in Domestic Tariff Area;

iii) Payments received in foreign exchange by a unit in the Domestic Tariff Area for supply of goods to a unit in the Special Economic Zone (SEZ);

iv) Payment received by an exporter from an account maintained with an authorised dealer for the purpose of counter trade. (Counter trade is an arrangement involving adjustment of value of goods imported into India against value of goods exported from India in terms of the Reserve Bank guidelines);

v) Advance remittance received by an exporter towards export of goods or services;

vi) Payment received for export of goods and services from India, out of funds representing repayment of State Credit in U.S. Dollar held in the account of Bank for Foreign Economic Affairs, Moscow, with an authorised dealer in India;

vii) Professional earnings including directors’ fee, consultancy fee, lecture fee, honorarium and similar other earnings received by a professional by rendering services in his individual capacity;

viii) Re-credit of unutilised foreign currency earlier withdrawn from the account;

ix) Amount representing repayment by the account holder's importer customer in respect of trade related loan/advances granted by the exporter (subject to compliance with the extant guidelines) holding EEFC account; and

x) The disinvestment proceeds received by the resident account holder on conversion of shares held by him to ADRs/GDRs under the Sponsored ADR/GDR Scheme approved by the Foreign Investment Promotion Board of the Government of India.

Ans: In terms of MD-TLE dated September 24, 2021, Primary (Urban) Co-operative Banks (PUCBs), State Co-operative Banks (StCBs) and Central Co-operative Banks (CCBs) have been recognised as eligible transferors of stressed loans. The relevant provisions of circular “Guidelines on Sale of Financial Assets to Securitisation Company/Reconstruction Company (SC/RC) by Multi State Urban Cooperative Banks’ dated March 28, 2014, in terms of which only multistate cooperative banks could sell stressed assets to ARCs have been repealed. Accordingly, all cooperative banks are permitted to transfer stressed assets to ARCs in compliance with the provisions of the MD-TLE and other extant regulatory instructions.

ના, બૅન્કોને સલાહ આપવામાં આવે છે કે તેઓ વ્યક્તિઓના સંદર્ભમાં બીએસબીડીએ ખોલવા માટે ઉંમર અને આવકના માપદંડ જેવા પ્રતિબંધ ન મૂકે.

One can file a complaint with the NBFC Ombudsman by writing on a plain paper and sending it to the concerned office of the NBFC Ombudsman by post/fax/hand delivery. One can also file it by email to the NBFC Ombudsman.

A complaint form along with the scheme is also available on RBI's website, though, it is not mandatory to use this format.

The application form will be provided by the issuing banks/SHCIL offices/designated Post Offices/agents. It can also be downloaded from the RBI’s website. Banks may also provide online application facility.

Ans. A Factoring Unit (FU) is a standard nomenclature used in TReDS for invoice(s) or bill(s) of exchange. Each FU represents a confirmed obligation of the corporates or other buyers, including Government Departments and PSUs.

Ans. Yes. The merchant is required to provide a printed receipt generated by the PoS terminal. In case the facility is availed along with the purchase of merchandise, the receipt generated shall separately indicate the amount of cash withdrawn.

Response: Banks and the CPTCs/GMCTAs may put in place a mutually acceptable procedure in this regard and notify that to the relevant CPTCs/GMCTAs.

Ans: In cases of accounts with ASCL above the cut-off where S4A is implemented, both the sustainable and unsustainable debt (Parts A & B) should be counted towards calculating ASCL.

Restructured accounts where cut-off ASCL is achieved/likely to be achieved due to additional finance under the restructuring package under JLF and other RBI frameworks, should not be subjected to disincentive mechanism for the incremental exposure.

Response

No. Banks are advised not to impose restrictions like age and income criteria of the individual for opening BSBDA.

• For calculating the index ratio for a specific date, daily reference WPI values would be linearly interpolated using ‘Ref WPI’ for the first day of the calendar month and the first day of the following calendar month.

• The formula for computing the reference WPI for a particular day is as under:

  

  [Ref WPI_M = Ref WPI for the first day of the calendar month in which Date falls, Ref WPI_M+1 = Ref WPI for the first day of the calendar month following the settlement date, D = Number of days in month (e.g. 31 days in August), and t= settlement date (e.g. August 6)]

• An example of daily reference WPI computed through interpolation is furnished below.

A composite loan limit of ₹1 crore can be sanctioned by banks to enable the MSME entrepreneurs to avail of their working capital and term loan requirement through Single Window in terms of our Master Direction on Lending to the MSME sector dated July 24, 2017. All scheduled commercial banks were advised vide our circular RPCD.SME&NFS. BC.No.102/06.04.01/2008-09 dated May 4, 2009 that the banks which have sanctioned term loan singly or jointly must also sanction working capital (WC) limit singly (or jointly, in the ratio of term loan) to avoid delay in commencement of commercial production thereby ensuring that there are no cases where term loan has been sanctioned and working capital facilities are yet to be sanctioned.

Ans. Kindly refer to paragraphs 3 and 4 of ‘Master Direction- Compounding of Contraventions under FEMA, 1999’ dated January 01, 2016 (updated as on January 4, 2021). The above Master Direction can be downloaded from the Reserve Bank’s website by clicking on the link /en/web/rbi/-/notifications/master-direction-compounding-of-contraventions-under-fema-1999-updated-as-on-may-24-2022-10190

Answer: The following accounts are permitted:

1. Foreign diplomatic missions and diplomatic personnel and their family members in India may open rupee deposits with an AD Bank.

2. Diplomatic missions and diplomatic personnel can open special rupee accounts namely Diplomatic Bond Stores Account to facilitate purchases of bonded stocks from firms and companies who have been granted special facilities by customs authorities for import of stores into bond, subject to conditions. The funds in the account may be repatriated outside India without the approval of Reserve Bank.

3. Diplomatic missions, diplomatic personnel and non-diplomatic staff, who are the nationals of the concerned foreign countries and hold official passport of foreign embassies in India can open foreign currency accounts in India. The account may be held in the form of current or term deposit account, and in the case of diplomatic personnel and non-diplomatic staff, may also be held in the form of savings account Such accounts can be credited by way of inward remittances and transfers (which are collected in India as visa fees) from the rupee account of the diplomatic mission in India. Funds held in such account if converted in rupees shall not be converted back into foreign currency. The funds in the account may be repatriated outside India without the approval of Reserve Bank.

Ans: No, there is no limit imposed by the RBI for funds transfer through NEFT system. However, a member bank may place amount limits based on its own risk perception with the approval of its Board.

Ans. On return from a foreign trip, travellers are required to surrender unspent foreign exchange held in the form of currency notes and travellers cheques within 180 days of return. However, they are free to retain foreign exchange up to USD 2,000, in the form of foreign currency notes or TCs for future use or credit to their Resident Foreign Currency (Domestic) [RFC (Domestic)] Accounts.

Ans. Direct access to CPS for non-banks will be enabled in a phased manner. In the first phase, the following authorised non-bank PSPs will be provided access –

i. Prepaid Payment Instrument (PPI) Issuers,

ii. Card Networks and

iii. White Label ATM Operators.

Ans. No

Answer: Yes, provided Indian branch of foreign bank is an AD bank. This is subject to approval of Reserve Bank as in the case of other such accounts.

Ans. No.

Ans : Yes, in addition to the consent of the beneficiaries, the mandate also provides important information related to bank account details etc. which are useful for the user institution to transfer funds to the right accounts . A model mandate form has been prescribed for the purpose and is available in the ECS Credit Procedural Guidelines.

There are three images of each cheque that are taken in CTS – front Gray Scale, front Black and White and back Black and White. Customers should use image friendly coloured ink to write cheques to facilitate clear image of written information. Further, customer should use permanent ink to prevent fraudulent alternation of contents later. However, Reserve Bank of India (RBI) has not prescribed specific ink colors to be used to writing cheques.

Customer should also be aware that cheques with alteration / modification are not accepted under CTS. No changes / corrections can be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), fresh cheque leaves should be used by customers. This would help banks in identifying and controlling fraudulent alterations.

One can file a complaint with the Banking Ombudsman simply by writing on a plain paper. One can also file it online at (“click here to lodge a complaint”) or by sending an email to the Banking Ombudsman. There is a form along with details of the scheme in our website. However, it is not mandatory to use this format.