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Regulatory Framework for Microfinance Loans

Q 11. Is there any specific reason for including a dedicated mechanism for redressal of recovery related grievances when there is already a customer grievance redress mechanism? +

Ans. The purpose of having a dedicated redress mechanism for recovery related grievances is that these grievances should be promptly addressed. Treating (clubbing) them as (with) other complaints (e.g., operational issues) may result in delayed action. However, this does not imply that a separate redress mechanism for recovery related grievances is being mandated. REs can restructure/ re-organise the existing customer grievance redress mechanism to identify and promptly address recovery related grievances.

Q 11: How will the exchange rate be determined?

Answer: Exchange rate between the currencies of the two trading partner countries will be market determined.

11. How will the FCNR (B) deposits mobilised in currencies other than US Dollars be taken into account for the purpose of entering into swap with RBI ? +

For FCNR (B) deposits mobilized in permissible foreign currencies other than US Dollar, banks may arrive at the equivalent dollar amount eligible to be swapped by converting the same at the prevailing market rates on the day of the swap deal. Banks may follow a consistent policy as far as conversion is concerned and should maintain a proper documentation (audit trails) of the procedure followed for such conversions.

11. What if someone needs more than ₹20,000/- cash for business or other purposes? +

Deposit into accounts can be made without restrictions. The ₹2000 banknotes can be deposited into bank accounts and cash requirements can be drawn thereafter, against these deposits.

Q.12. What will happen if credit is not afforded to the account of the beneficiary?

Ans: If a Destination Bank is not in a position to credit the beneficiary account due to any reason, the same would be returned to the ECS Centre to enable the ECS Centre to pass on the uncredited items to the User Institution through the Sponsor Bank. The User Institution can then initiate payment through alternate modes to the beneficiary.

In case of delayed credit by the destination bank, the destination bank would be liable to pay penal interest (at the prevailing RBI LAF Repo rate plus two percent) from the due date of credit till the date of actual credit. Such penal interest should be credited to the Destination Account Holder’s account even if no claim is lodged to the effect by the Destination Account Holder.

These FAQs are issued by the Reserve Bank of India for information and general guidance purposes only. The Bank will not be held responsible for actions taken and/or decisions made on the basis of the same. For clarifications or interpretations, if any, one may be guided by the relevant circulars and notifications issued from time to time by the Bank.

12. Is there any limit on the amount of compensation as specified in an Award ? +

The amount, if any, to be paid by the bank to the complainant by way of compensation for any loss suffered by the complainant is limited to the amount arising directly out of the act or omission of the bank or ₹ 20 lakhs (₹ Two Million), whichever is lower.

12. How will the bank or the PD bid on behalf of his non-competitive bidders ? +

Each bank or PD will, on the basis of firm orders, submit a single bid for the aggregate amount of non-competitive bids on the day of the auction. The bank or PD will furnish details of individual customers, viz., name, amount, etc. along with the application.

Q.12 Which are the schemes under which an Indian Company can set up a Joint Venture or Wholly Owned Subsidiary abroad ? +

Broadly there are two schemes under which one can set up a JV/WOS abroad, namely automatic route and normal route.

12. Can one pay by cash full rupee equivalent of foreign exchange being purchased for travel abroad ?

Foreign exchange for travel abroad can be purchased from banks against rupee payment in cash up to Rs.50,000/-. However, if the rupee equivalent exceeds Rs.50,000/-, the entire payment should be made by way of a crossed cheque/banker’s cheque/pay order/demand draft only.

Q.12 Which projects can IDF-NBFC invest in? +

Ans : IDF-NBFCs shall invest only in PPP and post COD infrastructure projects which have completed at least one year of satisfactory commercial operation and are a party to a Tripartite Agreement with the Concessionaire and the Project Authority for ensuring a compulsory buyout with termination payment.

12. What does one mean by BLA? +

A BLA or Bond Ledger Account means an account with RBI or an agency bank in which the Government securities are held in a dematerialized form to the credit of the holder. The investor in this case receives a Certificate of Holding or Certificate of Investment from RBI/Agency Banks.

12. What is the infrastructure requirement at the GAH end? +

All NDS OM-Web GAH users would need to use Digital Certificates issued by the designated Certifying Authority obtained by the respective PM, embedded into e-tokens (of the prescribed configuration) supplied to them by their PM. A safe, reliable, stable internet connection with suitable bandwidth is necessary for efficient operations. A modern PC with contemporary configuration, minimum 1 GB RAM, Operating System - Windows XP and above will be required. Only IE Browser - 7 and above can be used for accessing OM-Web.

12. Whether EEFC Account is permitted to be held jointly with a resident relative? +

Resident individuals are permitted to include resident relative(s) [as defined in section 2(77) of the Companies Act, 2013] as joint holder(s) in their EEFC account on ‘former or survivor’ basis.

12. ಕನಿಷ್ಠ ವಿವರ ಪಿಪಿಐನಲ್ಲಿ ಪಡೆಯಬೇಕಾದ ಕನಿಷ್ಠವಿವರಗಳಲ್ಲಿ ಏನನ್ನು ಒಳಗೊಂಡಿದೆ? +

ಉತ್ತರ. ಕನಿಷ್ಠ ವಿವರಗಳು ಒನ್ ಟೈಮ್ ಪಿನ್[ಒಟಿಪಿ]ಯೊಂದಿಗೆ ಪರಿಶೀಲಿಸಿದ ಮೊಬೈಲ್ ನಂಬರ್ ಹಾಗೂ ಪಿಎಮ್ಎಲ್ ರೂಲ್ಸ್, 2005ರ ರೂಲ್ 2[ಡಿ] ಅಡಿಯಲ್ಲಿ ವ್ಯಾಖ್ಯಾನಿಸಲಾದ ಯಾವುದೇ ‘ಆಫಿಶಿಯಲಿ ವ್ಯಾಲಿಡ್ ಡಾಕ್ಯೂಮೆಂಟ್ [ಒವಿಡಿ]’ಯ ಹೆಸರಿನ ಸ್ವಯಂ ಘೋಷಣೆ ಹಾಗೂ ವಿಶಿಷ್ಟ ಗುರುತಿನ ಸಂಖ್ಯೆಯನ್ನು ಅಥವಾ ಪಿಎಮ್ಎಲ್ ರೂಲ್ಸ್, 2005ರ ಅಡಿಯಲ್ಲಿ, ಅನ್ವಯವಾಗುವಂತೆ, ಯಾವುದೇ ಕಡ್ಡಾಯ ಕಾಗದಪತ್ರಗಳನ್ನು ಒಳಗೊಂಡಿರುತ್ತದೆ.

12. 'ಬೇಸಿಕ್ ಸೇವಿಂಗ್ಸ್ ಬ್ಯಾಂಕ್ ಡಿಪೋಸಿಟ್ ಅಕೌಂಟ್ ’ನಲ್ಲಿ ಯಾವ್ಯಾವ ಸೇವೆಗಳು ಉಚಿತವಾಗಿ ದೊರೆಯುತ್ತವೆ' ? +

'ಬೇಸಿಕ್ ಸೇವಿಂಗ್ಸ್ ಬ್ಯಾಂಕ್ ಡಿಪೋಸಿಟ್ ಅಕೌಂಟ್'ನಲ್ಲಿ ಉಚಿತವಾಗಿ ದೊರೆಯುವ ಸೇವೆಗಳೆಂದರೆ, ನಗದು ಡಿಪೋಸಿಟ್ ಮತ್ತು ವಿಥ್ಡ್ರಾವಲ್, ಎಲೆಕ್ಟ್ರಾನಿಕ್ ಪೇಮೆಂಟ್ಸ್ ಚನೆಲ್ಸ್ ಅಥವಾ ಡಿಪೋಸಿಟ್ ಮೂಲಕ ಹಣ ಸ್ವೀಕರಿಸುವುದು/ಕ್ರೆಡಿಟ್ ಪಡೆಯುವುದು, ಬ್ಯಾಂಕು ಶಾಖೆಗಳಲ್ಲಿ ಅಥವಾ ಎಟಿಮ್ಗಳಲ್ಲಿ ಚೆಕ್ ಸಂಗ್ರಹಿಸಿಸುವುದು.

12. ಎಟಿಎಮ್‌ಗಳಲ್ಲಿ ಬ್ಯಾಂಕ್‌ ಹೆಚ್ಚಿನ ಸಂಖ್ಯೆಯ ಉಚಿತ ವಹಿವಾಟುಗಳನ್ನು ನೀಡಬಹುದೇ? +

ಉತ್ತರ. ಎಟಿಎಮ್‌ಗಳಲ್ಲಿ ಕನಿಷ್ಠ ಸಂಖ್ಯೆಯ ಉಚಿತ ವಹಿವಾಟುಗಳನ್ನು ಆರ್‌ಬಿಐ ಕಡ್ಡಾಯಗೊಳಿಸಿದೆ. ಬ್ಯಾಂಕುಗಳು ತಮ್ಮ ಗ್ರಾಹಕರಿಗೆ ಹೆಚ್ಚಿನ ಸಂಖ್ಯೆಯ ವಹಿವಾಟುಗಳನ್ನು ಉಚಿತವಾಗಿ ನೀಡಬಹುದು.

12. In RTGS, why is credit to the beneficiary given solely based on account number? +

Ans. Transactions in RTGS happen in real time and it is not possible to match name and account number before affording credit to the beneficiary. Since name in the Indian context is spelt differently and would not really match with that available with the beneficiary bank, the process of affording credit solely based on the account number of the beneficiary has been enabled.

Our Circular Ref. No. DPSS (CO) EPPD No. / 863 / 04.03.01 / 2010-11 dated October 14, 2010 on ‘Electronic payment products – Processing inward transactions based solely on account number information’ (available at https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6043&Mode=0) may be referred to for further details.

12. Is there any minimum cut off with respect to aggregate outstanding exposure with banking system for mandatorily signing ICA under the Resolution Framework? Also, whether the ICA norms are applicable to loans availed by individuals for business purpose from two or more banks? +

If there are multiple lending institutions with exposure to a borrower whose resolution is undertaken in terms of Part B of the Annex to the Resolution Framework, all lending institutions having exposure to such borrower are required to enter into ICA.

12. Can compensation be claimed for mental agony and harassment ? +

The NBFC Ombudsman may award compensation not exceeding rupees 0.1 million to the complainant for causing mental agony and harassment. The NBFC Ombudsman, while passing such award, will take into account the loss of the complainant's time, expenses incurred by the complainant, harassment and mental anguish suffered by the complainant.