RBI Assignment

Monetary Policy Update (May 2020)
As per the Monetary Policy Statement 2020-21 dated May 22, 2020, the Bank Rate is revised
downwards by 40 basis points from 4.65% to 4.25%. It also reduced the repo rate by 40 basis
points from 4.40% to 4.00%. Consequently, the Marginal Standing Facility rate is adjusted
from 4.65% to 4.25%.
Investment by Foreign Portfolio Investors (FPI) in Debt (January 2020)

According to the previous regulations, short-term investments by an FPI shall not exceed
20% of the total investment of that FPI in either Central Government Securities (including
Treasury Bills) or State Development Loans or corporate bonds. This short-term investment
limit is now increased from 20% to 30%.
Enhancing Security of Card Transactions (January 2020)

To improve user convenience and increase the security of card transactions, it has been
decided as under:
1. At the time of issue / re-issue, all cards (physical and virtual) shall be enabled for use
only at contact-based points of usage [viz. ATMs and Point of Sale (PoS) devices]
within India. Issuers shall provide cardholders a facility for enabling card not present
(domestic and international) transactions, card present (international) transactions and
contactless transactions, as per the process outlined in para 1 (c).
2. For existing cards, issuers may take a decision, based on their risk perception,
whether to disable the card not present (domestic and international) transactions, card
present (international) transactions and contactless transaction rights. Existing cards
which have never been used for online (card not present) / international / contactless
transactions shall be mandatorily disabled for this purpose.
Expanding and Deepening of Digital Payments Ecosystem (October 2019)
With a view to expanding and deepening the digital payments ecosystem, RBI has been
decided that all State/ UT Level Bankers Committees (SLBCs/ UTLBCs) shall identify one
district in their respective States/ UTs on a pilot basis in consultation with banks and
stakeholders. The identified district shall be allotted to a bank having significant footprint
which will endeavour to make the district 100% digitally enabled within one year, in order to
enable every individual in the district to make/ receive payments digitally in a safe, secure,
quick, affordable and convenient manner. This would, inter alia, include providing the
necessary infrastructure and literacy to handle such transactions.
Large Exposures Framework (LEF) (April 2019)
1. For the purpose of reckoning exposure limits under LEF, an Indian branch of a
foreign G-SIB will be considered as any other Indian bank and can accordingly take
exposure upto 25% of its Tier I capital on another non-GSIB in India.
2. The interbank exposure limit of an Indian branch of a foreign G-SIB with its Head
Office will be 20% of its Tier I capital in India.
3. The eligible capital base for the purpose of LEF will be the effective amount of Tier 1
capital.
Update on Gold Monetisation Scheme (January 2019)
According to the new update. persons eligible to make a deposit are Resident Indians
[Individuals, HUFs, Proprietorship & Partnership firms, Trusts including Mutual
Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations,
Companies, charitable institutions, Central Government, State Government or any other
entity owned by Central Government or State Government]. Joint deposits of two or more
eligible depositors are also allowed under the scheme and the deposit in such case shall be
credited to the joint deposit account opened in the name of such depositors.
Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR),
FALLCR against credit disbursed to NBFCs and HFCs (December 2018)
The banks have been permitted to reckon government securities as Level 1 HQLA under
FALLCR within the mandatory SLR requirement up to 0.5% of the bank’s NDTL in respect
of their incremental lending to NBFCs and HFCs after October 19, 2018. This facility is
available up to December 31, 2018. Further, the single borrower limit for NBFCs has been
increased from 10 per cent to 15 per cent of capital funds till December 31, 2018.
Priority Sector Lending – Targets and Classification (June 2018)
According to the latest RBI circular update, loans to individuals up to ₹ 28 lakh in
metropolitan centres (with population of ten lakh and above) and ₹ 20 lakh in other centres,
are eligible to be classified under priority sector, provided that the cost of dwelling unit does
not exceed ₹ 35 lakh and ₹ 25 lakh, respectively. With a view to bringing convergence of the
Priority Sector Lending guidelines for housing loans with the Affordable Housing Scheme,
and to give a fillip to low-cost housing for the Economically Weaker Sections and Low
Income Groups, the housing loan limits for eligibility under priority sector lending will be
revised to ₹ 35 lakh in metropolitan centres (with population of ten lakh and above), and ₹
25 lakh in other centres, provided the overall cost of the dwelling unit in the metropolitan
centre and at other centres does not exceed ₹ 45 lakh and ₹ 30 lakh, respectively.
Furthermore, the existing family income limit of ₹ 2 lakh per annum, prescribed under Para
10.4 of the above Master Direction, for loans to housing projects exclusively for the purpose
of construction of houses for Economically Weaker Sections (EWS) and Low Income Groups
(LIG), is revised to ₹ 3 lakh per annum for EWS and ₹ 6 lakh per annum for LIG, in
alignment with the income criteria specified under the Pradhan Mantri Awas Yojana.
Interest Rate Options in India (June 2018)
RBI has decided to to permit Interest Rate Swaptions in Rupees so as to enable better timing
flexibility for the market participants seeking to hedge their interest rate risk.
Discontinuance of Letters of Undertaking (LoUs) and Letters of Comfort (LoCs) for
Trade Credits (March 2018)
It has been decided to discontinue the practice of issuance of LoUs/ LoCs for Trade Credits
for imports into India by AD Category –I banks with immediate effect. Letters of Credit and
Bank Guarantees for Trade Credits for imports into India may continue to be issued subject to
compliance with the provisions contained in Department of Banking Regulation Master
Circular No. DBR. No. Dir. BC.11/13.03.00/2015-16 dated July 1, 2015 on “Guarantees and
Co-acceptances”

RBI Assignment

Uploaded by

Copyright:

Available Formats

RBI Assignment

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

RBI Assignment

Uploaded by

Copyright:

Available Formats

Monetary Policy Update (May 2020)

Investment by Foreign Portfolio Investors (FPI) in Debt (January 2020)

Enhancing Security of Card Transactions (January 2020)

You might also like