Ans: If it is not possible to afford credit to the account of the beneficiary for any reason, destination banks are required to return the transaction (to the originating branch) within two hours of completion of the batch in which the transaction was processed.

Ans : The ECS Debit User intending to collect receivables through ECS Debit has to submit details of the customers (like name, bank / branch / account number of the customer, MICR code of the destination bank branch, etc.), date on which the customer’s account is to be debited, etc., in a specified format (called the input file) through its sponsor bank to the ECS Centre.

The bank managing the ECS Centre then passes on the debits to the destination banks for onward debit to the customer’s account with the destination bank branch and credits the sponsor bank's account for onward credit to the User institution. Destination bank branches will treat the electronic instructions received from the ECS Centre on par with the physical cheques and accordingly debit the customer accounts maintained with them. All the unsuccessful debits are returned to the sponsor bank through the ECS Centre (for onward return to the User Institution) within the specified time frame.

For further details about the ECS Debit scheme, the ECS Debit Procedural Guidelines – available on the website of Reserve Bank of India at http://www.rbi.org.in/Scripts/ECSUserView.aspx?Id=25 may be referred to.

• Yes, these securities are eligible to be used as collateral for loans from banks, financial Institutions and Non Banking Financial Companies, (NBFC).

Ans. Yes

Answer: Yes, INR exposure can be hedged in terms of applicable guidelines depending upon underlying transactions.

EXAMPLE OF EMI CALCULATION (PURE FIXED LOAN)

Loan amount x rpm x  (1+pm)  
                                    (1+pm)

• rpm= interest per month (rate of interest per year/12)
• n= number of installments

NB: If you have a fixed budget towards EMI you can arrive at loan amount by changing the other variables such as by reducing the rate of interest or by increasing the tenure of loan. This can also be arrived at through EMI calculator by a trial-and-error approach.

Ans : The advantages of ECS Debit to customers are many and include,

• ECS Debit mandates will take care of automatic debit to customer accounts on the due dates without customers having to visit bank branches / collection centres of utility service providers etc.

• Customers need not keep track of due date for payments.

• The debits to customer accounts would be monitored by the ECS Users, and the customers alerted accordingly.

• Cost effective.

Response

Banks while opening the BSBDA should educate such customers about the ATM Debit Card, ATM PIN and risk associated with it. However, if customer chooses not to have ATM Debit Card banks need not force ATM debit cards on such customers. If, however, customer opts to have an ATM Debit Card, banks should provide the same to BSBDA holders through safe delivery channels by adopting the same procedure which they have been adopting for delivery of ATM Debit Card and PIN to their other customers.

Yes, banks provide following services to the MSE entrepreneurs:

(i) Rural Self Employment Training Institutes (RSETIs)

At the initiative of the Ministry of Rural Development (MoRD), Rural Self Employment Training Institutes (RSETIs) have been set up by various banks all over the country. These RSETIs are managed by banks with active co-operation from the Government of India and State Governments. RSETIs conduct various short duration (ranging preferably from 1 to 6 weeks) skill upgradation programmes to help the existing entrepreneurs compete in this ever-changing global market. RSETIs ensure that a list of candidates trained by them is sent to all bank branches of the area and co-ordinate with them for grant of financial assistance under any Govt. sponsored scheme or direct lending.

(ii) Financial Literacy and consultancy support:

Banks have been advised to either separately set up special cells at their branches, or vertically integrate this function in the Financial Literacy Centres (FLCs) set up by them, as per their comparative advantage. Through these FLCs, banks provide assistance to the MSE entrepreneurs in regard to financial literacy, operational skills, including accounting and finance, business planning etc. (Refer circular RPCD.MSME & NFS.BC.No.20/06.02.31/2012-13 dated August 1, 2012).

Also, Financial Literacy Centres operated by Scheduled commercial Banks (including RRBs) have been advised vide our circular FIDD.FLC.BC.No.22/12.01.018/2016-17 dated March 02, 2017 to conduct target specific financial literacy camps wherein one of the target groups identified is MSEs.

Ans: If the NEFT transaction is not credited or returned within two hours after batch settlement, then the bank is liable to pay penal interest to the affected customer at the current RBI LAF Repo Rate plus two percent for the period of delay / till the date of credit or refund, as the case may be, is afforded to the customers’ account without waiting for a specific claim to be lodged by the customer in this regard.

• As per extant RBI’s guidelines, banks will be free to decide interest rate on loans against these securities, subject to the condition that such interest rate is to be at base rate or above.

Answer: No.

• Like other G-Secs, coupon on IIBs would be paid on half yearly basis.

• Fixed coupon rate would be paid on the adjusted principal.

Ans. The credits to the account should represent the funds received from head office through normal banking channels for meeting the expenses of the office and/or the rupee amounts receivable if any, under the contract and no other amount should be credited without prior permission of the Reserve Bank. Similarly debits to this account could be raised only for meeting the local expenses of the office and intermittent remittances pending winding up / completion of the project.

For the intermittent remittances, the AD bank should be satisfied with the bonafides of the transaction and ensure submission of the following documents:

a. An Auditors’ / Chartered Accountants’ Certificate to the effect that sufficient provisions have been made to meet the liabilities in India including Income Tax, etc.

b. An undertaking from the PO that the remittance will not, in any way, affect the completion of the project in India and that any shortfall of funds for meeting any liability in India will be met by inward remittance from abroad.

Ans : User institutions enjoy many benefits from the ECS Debit Scheme like,

• Savings on administrative machinery and costs of collecting the cheques from customers, presenting in clearing, monitoring their realisation and reconciliation.

• Better cash management because of realisation / recovery of dues on due dates promptly and efficiently.

• Avoids chances of loss / theft of instruments in transit, likelihood of fraudulent access to the paper instruments and encashment thereof.

• Realisation of payments on a uniform date instead of fragmented receipts spread over many days.

• Cost effective.

होय. बीएसबीडीए धारकांना 4 ऑक्टोबर 2006 रोजीचे परिपत्रक DBOD. क्र. Leg. BC.32 /09.07.005 /2006-07. मधील आमच्या सूचनांच्या अनुसार बीएसबीडीए धारकांना पासबुक सुविधा विनाशुल्क द्यायला हवी.

Ans. You may approach RTGS Help Desk / Contact point of the RBI at rtgsmumbai@rbi.org.in.

Ans: The credit is given to the account number written / given by remitter in his / her application / instruction. Credit to beneficiary account is released solely based on account number. It is the responsibility of remitting customer to write correct account number. The originator / sender should exercise due care in providing the correct account number of the beneficiary, in the NEFT remittance instruction / application.

• As indicated in the press release issued by Reserve Bank of India on May 15, 2013, IIBs would be launched on June 4, 2013 and the same would be issued on the last Tuesday of each month during 2013-14. This would also include the last Tuesday of June 2013.

• Existing taxation applicable to Government of India securities issued as part of the market borrowing will be applicable to these securities.

Ans. Yes

Answer: The AD bank in India shall be responsible for the reporting of transactions taking place in the Special Rupee Vostro Account of the correspondent bank of the trading partner country.

Response

Yes. BSBDA holders should be offered passbook facility free of charge in line with our instructions contained in circulars RPCD.CO.RF.BC.28/07.40.06/2006-07 dated October 11, 2006 and RPCD.CO.RRB.BC.No.29/03.05.28-A/2006-07 dated October 13, 2006.

Yes, guidelines on ‘Streamlining flow of credit to Micro and Small Enterprises (MSEs) for facilitating timely and adequate credit flow during their ‘Life Cycle’ were issued to Scheduled Commercial Banks (SCBs) vide our circular FIDD.MSME & NFS.BC.No.60/06.02.31/2015-16 dated August 27, 2015.

Ans : The banking system has many benefits from ECS Debit such as –

• Freedom from paper handling and the resultant disadvantages of handling, receiving and monitoring paper instruments presented in clearing.

• Ease of processing and return for the destination bank branches. Destination bank branches can debit the customers’ accounts after matching the account number of the customer in their database and due verification of existence of valid mandate and its particulars. With core banking systems in place and straight-through-processing, this process can be completed with minimal manual intervention.

• Smooth process of reconciliation for the sponsor banks.

• Cost effective.

As per the Public Notice (https://www.bankpng.gov.pg/wp-content/uploads/2014/08/Full-page_-potrait_Paper-Bank-Notes2.pdf) issued by Bank of Papua New Guinea on their website www.bankpng.gov.pg Papua New Guinea paper banknotes ceased to be legal tender on June 30, 2012 and only polymer banknotes are legal tender in Papua New Guinea. Further, Bank of Papua New Guinea has also shared the following range of serial numbers of banknotes which were never issued (and were sold to a recycler in Europe) and are therefore, not legal tender in Papua New Guinea:

(Published on receipt of request from Bank of Papua New Guinea)

Ans. You may approach grievance redressal cell of your bank with details of the disputed transaction. In case your grievance is not resolved within 30 days, you may make a complaint under “The Reserve Bank-Integrated Ombudsman Scheme (RB-IOS 2021)”. The RB-IOS 2021 provides a single reference point for customers to file complaints against the RBI regulated entities specified therein. The RB-IOS, 2021 is available at the following path on the RBI website: https://rbidocs.rbi.org.in/rdocs/content/pdfs/RBIOS2021_121121.pdf.

Answer: As the transactions will be settled in INR, it will reduce the exchange rate risk for the Indian exporters and importers.

Ans: You may approach grievance redressal cell of your bank with details of the disputed transaction. In case your grievance is not resolved within 30 days, you may make a complaint under “The Reserve Bank-Integrated Ombudsman Scheme (RB-IOS 2021)”. The RB-IOS 2021 provides a single reference point for customers to file complaints against the RBI regulated entities specified therein. The RB-IOS, 2021 is available at the following path on the RBI website: /documents/87730/39016390/RBIOS2021_121121.pdf.

Queries about the scheme shall be forwarded to e-mail.

Response

While opening the BSBDA customers’ consent in writing be obtained that his existing non-BSBDA Savings Banks accounts will be closed after 30 days of opening BSBDA and banks are free to close such accounts after 30 days.

• As is the case with fixed rate conventional bonds, IIBs would be issued through yield based auction and subsequent reissues will be through price based auction.

• Investors would be required to bid for real yield in case of IIBs as against nominal yield in case of fixed rate G-Sec.

In terms of the captioned guidelines, banks have been advised to review and tune their existing lending policies to the MSE sector by incorporating therein the following provisions so as to facilitate timely and adequate availability of credit to viable MSE borrowers especially during the need of funds in unforeseen circumstances:

(i) To extend standby credit facility in case of term loans

(ii) Additional working capital to meet with emergent needs of MSE units

(iii) Mid-term review of the regular working capital limits, where banks are convinced that changes in the demand pattern of MSE borrowers require increasing the existing credit limits of the MSEs, every year based on the actual sales of the previous year.

(iv) Timelines for Credit Decisions.

• Existing taxation applicable to Government of India securities will be applicable to these securities.

• Sub-section (iv) of the Section 193 of the Income Tax Act, 1961 stipulates that no tax shall be deducted from any interest payable on any security of the Central Government or a State Government, provided that nothing contained in this clause shall apply to the interest exceeding rupees ten thousand payable on 8% Savings (Taxable) Bonds, 2003 during the financial year.

• As per the above Section, TDS shall not be deducted from any interest payable on IINSS-C, until and unless notified by the Government of India otherwise.

Ans. Wherever the BO or PO is required to remit funds outside India, within the applicable guidelines under FEMA, they may do so not necessarily through the designated AD Category I bank but through any AD Category I bank of its choice subject to obtaining no objection certificate (NOC) from the designated AD Category I bank. The remittances have to be for transactions settling on Cash / Tom / Spot basis only. The remittance has to be through banking channel in either of the two methods:

(1) The designated AD category I bank will transfer equivalent INR amount to the transaction handling bank. The transaction handling bank can remit the amount to the overseas parent office of BO / PO through SWIFT. However, the transaction handling bank will have to ensure KYC compliance and the necessary documentation. It will also be required to share the SWIFT message along with the details like UIN No, beneficiary and remittance details with the designated AD category I bank.

(2) The designated AD category I bank will transfer equivalent INR amount to the transaction handling bank. The transaction handling bank will then credit the NOSTRO account of the designated AD Category I bank which in turn will remit the amount to the final beneficiary.

Ans : Yes. In case of any need to withdraw or stop a mandate the customer can do so by approaching the user institution to withdraw the mandate. The account holder / customer can also withdraw the mandate / debit instruction directly from his / her banker without involvement of the User institution. The withdrawal instructions of a customer in such cases would be treated equivalent to a ‘stop payment’ instruction in cheque clearing system. However, as a matter of best practice, the customer may also provide prior notice or intimation of mandate withdrawal to the ECS user institution well in time, so as to ensure that the input files submitted by the user institution does not include the ECS Debit details in respect of the withdrawn / stopped mandates, leading to avoidable returns/rejections etc.

With the issuance and launch of the New Generation banknotes, Central Bank of Kenya has advised that in terms of Gazette Notice No. 4849 dated May 31, 2019 from Central Bank of Kenya available at: (http://kenyalaw.org/kenya_gazette/gazette/volume/MTk2Mg--/Vol.CXXI-No.69), and the Press Release dated June 6, 2019 available at: (https://www.centralbank.go.ke/uploads/press_releases/696932423_Press%20Release%20-%20New%20Generation%20Banknotes.pdf), all the currency notes of denomination ‘1000 shillings (Ksh)’ shall cease to be legal tender, and shall no longer be exchanged, with effect from October 1, 2019.

(Published on receipt of request from Central Bank of Kenya)

बीएसबीडीएमध्ये , बँकांनी एटीएम आणि अन्य माध्यमांमधून किमान चार वेळा विनाशुल्क पैसे काढण्याची सुविधा पुरवायला हवी. त्या चार वेळांनंतर पैसे काढताना त्या अतिरिक्त पैसे काढण्यासाठी शुल्क आकारावे की आकारू नये हे बॅंकांच्या विवेकावर सोडण्यात आले आहे. तथापि, बँकांनी ह्यासाठीची मूल्य संरचना रास्त, निष्पक्षपाती आणि पारदर्शक पद्धतीने तयार करायला हवी.

Ans. Complaints can be filed online on https://cms.rbi.org.in, or through the dedicated e-mail or sent in physical mode to the ‘Centralised Receipt and Processing Centre’ set up at RBI, 4th Floor, Sector 17, Chandigarh – 160 017 in the format given at the following path - https://rbidocs.rbi.org.in/rdocs/content/pdfs/RBIOS2021_121121_A.pdf. A toll-free number – 14448 (9:30 am to 5:15 pm) – is also available for customers to seek assistance in filing complaints and information on grievance redressal, with multi-lingual support.