Weekly Round-up | Updates
1. INDIA
1.1. RBI releases Master Circular- Prudential Norms on Capital Adequacy - Primary (Urban) Co-operative Banks (UCBs)
Reserve Bank of India (RBI) issued the Master Circular on Prudential Norms on Capital Adequacy - Primary (Urban) Cooperative Banks (UCBs) consolidating and updating all the instructions/guidelines on the subject issued up to April 19, 2023. Please refer to the Master Circular DOR.CAP.REC.2/09.18.201/2022-23 dated April 1, 2022, on the captioned subject.[1]
RBI has, by an order dated April 11, 2023, imposed a monetary penalty of ₹23.23 lakh (Rupees Twenty-Three Lakh and Twenty-Three Thousand only) on the Karnataka State Co-operative Apex Bank Ltd. (the bank), for non-compliance with RBI (Know Your Customer (KYC)) Directions, 2016 as well as directions issued by RBI on ‘Membership of Credit Information Companies (CICs)’. This penalty has been imposed in exercise of powers conferred on RBI under Section 47A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949 and Section 25(1)(iii) read with Section 23(4) of the Credit Information Companies (Regulation) Act, 2005.[2]
RBI vide directive CO.DOS.DSD.No.S2469/12-07-005/2022- 23 dated July 15, 2022, had placed Raigad Sahakari Bank Limited, Mumbai, Maharashtra under Directions from the close of business on July 18th, 2022. The validity of the directions was extended from time-to-time, the last being up to April 18th, 2023. RBI has notified that in the exercise of powers vested in it under sub-section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949, RBI hereby directs that the aforesaid Directions shall continue to apply to the bank till July 18th, 2023, as per the directive DOR.MON.D-09/12.22.210/2022-23 dated April 17th, 2023, subject to review.[3]
RBI placed on its website a Working Paper titled, “Reading Consumers’ Minds: An Analysis of Inflation Expectations” under the Reserve Bank of India Working Paper Series 1. The paper is authored by Purnima Shaw.
The heterogeneity in the consumption baskets of households is often deemed responsible for the deviation of households’ inflation expectations from the headline inflation number. A novel approach is proposed in this paper to verify this by simulating heterogeneous population consumption baskets and estimating the mean inflation by sampling the baskets. The estimated mean inflation using a random approach fails to display closeness with the survey numbers. Therefore, the paper proposes alternative logical methods for designing basket compositions and identifies the most suited method using which the estimated expectations are found to be close to and well-correlated with the survey numbers.[4]
RBI issued Directions to Nashik Zilla Girna Sahakari Bank Limited, Nashik, Maharashtra under Section 35A read with Section 56 of the Banking Regulation Act, 1949 (AACS) vide Directive CO.DoS.DSD.No.S2470/12-07-005/2022- 2023 dated July 15, 2022 for a period of six months up to January 18, 2023, the validity of which was extended up to April 18, 2023 vide Directive DOR.MON.D59/12.22.412/2022-23 dated January 18, 2023. RBI is satisfied that in the public interest, it is necessary to extend the period of operation of the Directive CO.DoS.DSD.No.S2470/12-07- 005/2022-2023 dated July 15, 2022, issued to Nashik Zilla Girna Sahakari Bank Limited, Nashik as modified vide Directive DOR.MON/D-59/12.22.412/2022-23 dated January 18, 2023. Accordingly, the Reserve Bank of India, in exercise of powers vested in it under sub-section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949, hereby directs that the Directive CO.DoS.DSD.No.S2470/12- 07-005/2022-2023 dated July 15, 2022, issued to Nashik Zilla Girna Sahakari Bank Limited, Nashik, the validity of which was last extended up to April 18, 2023 vide Directive DOR.MON/D-59/12.22.412/2022-23 dated January 18, 2023 shall continue to apply to the bank for a further period of three months from April 19, 2023 to July 18, 2023, subject to review.[5]
RBI issued Directions to Sri Mallikarjuna Pattana Sahakari Bank Niyamitha, Maski, Karnataka under Section 35 A read with Section 56 of the Banking Regulation Act, 1949 vide Directive BLR.DOS.SSMS.No.S558/13-03-225/2022- 23 dated July 15, 2022. RBI is satisfied that in the public interest, it is necessary to extend the period of operation of the Directive BLR.DOS.SSMS.No.S558/13-03- 225/2022-23 dated July 15, 2022 as modified from time to time, last being vide Directive DOR.MON/D-60/12.23.225/2022-23 dated January 18, 2023 issued to Sri Mallikarjuna Pattana Sahakari Bank Niyamitha, Maski, Karnataka. Accordingly, RBI, in exercise of powers vested in it under sub-section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949, hereby directs that the Directive BLR.DOS.SSMS.No.S558/13-03-225/2022-23 dated July 15, 2022, issued to Sri Mallikarjuna Pattana Sahakari Bank Niyamitha, Maski, Karnataka, shall continue to apply to the bank for a further period of three months from April 19, 2023 to July 18, 2023, subject to review.[6]
RBI has extended the directions issued to the National Urban Co-operative Bank Ltd., Bahraich (U.P.) for a period of three months from April 23, 2023, to July 22, 2023, subject to review. The bank has been under direction from the close of business of July 22, 2022 vide directive order CO.DOS.SED.No.S2575/12-07- 005/2022-2023 dated July 21, 2022, issued under section 35 A read with section 56 of the Banking Regulation Act, 1949 (AACS). The said direction was extended till April 22, 2023, vide directive ref. DOR.MON.D-61/12.28.075/2022-23 dated January 20, 2023.
The validity of the directive has been extended for a period of three (03) months from April 23, 2023, to July 22, 2023, vide directive order DOR.MON.D-11/12.28.075/2023-24 dated April 19, 2023 subject to review. A copy of the directive order dated April 19, 2023, is displayed at the bank’s premises for the perusal of the public.[7]
In terms of GOI Notification F. No. 4(25) - W&M/2017 dated October 06, 2017 (SGB 2017-18, Series IV - Issue date October 23, 2017) on Sovereign Gold Bond Scheme, premature redemption of Gold Bond may be permitted after fifth year from the date of issue of such Gold Bond on the date on which interest is payable. Accordingly, the next due date of premature redemption of the above tranche shall be April 21, 2023 (April 22 and April 23, 2023, being Saturday and Sunday respectively). Further, the redemption price of SGB shall be based on the simple average closing gold price of 999 purity of the previous three business days from the date of redemption as published by the India Bullion and Jewellers Association Ltd (IBJA). Accordingly, the redemption price for the premature redemption due on April 21, 2023 (April 22 and April 23, 2023, is Saturday and Sunday respectively) shall be ₹6038/- (Rupees Six thousand thirty-eight only) per unit of SGB based on the simple average of closing gold price for the last three days April 18, April 19 and April 20, 2023.[8]
RBI issued Directions to Saibaba Janata Sahakari Bank Limited, Latur, Maharashtra under Section 35 A read with Section 56 of the Banking Regulation Act, 1949 (AACS) vide Directive CO.DoS.SED.No.S2598/12-07-005/2022- 2023 dated July 21, 2022, for a period of six months up to January 22, 2023, the validity of which was extended up to April 22, 2023, vide Directive DOR.MON.D-62/12.22.705/2022- 23 dated January 20, 2023.
RBI is satisfied that in the public interest, it is necessary to extend the period of operation of the Directive CO.DoS.SED.No.S2598/12-07-005/2022- 2023 dated July 21, 2022, issued to Saibaba Janata Sahakari Bank Limited, Latur, Maharashtra as modified vide Directive DOR.MON/D-62/12.22.705/2022-23 dated January 20, 2023. Accordingly, RBI, in the exercise of powers vested in it under sub-section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949, hereby directs that the Directive CO.DoS.SED.No.S2598/12-07-005/2022- 2023 dated July 21, 2022, issued to Saibaba Janata Sahakari Bank Limited, Latur, Maharashtra, the validity of which was last extended up to April 22, 2023, vide Directive DOR.MON/D-62/12.22.705/2022-23 dated January 20, 2023, shall continue to apply to the bank for a further period of three months from April 23, 2023, to July 22, 2023, subject to review.[9]
1.10. RBI launches 37th Round of Quarterly Services and Infrastructure Outlook Survey (SIOS) Q1:2023-24
RBI launched the 37th round of the quarterly Services and Infrastructure Outlook Survey (SIOS) for the reference period April-June 2023. The survey assesses the business situation for the current quarter (Q1:2023-24) from selected companies in the services and infrastructure sectors in India and their expectations for the ensuing quarter (Q2:2023-24) based on qualitative responses on a set of indicators pertaining to demand conditions, financial conditions, employment conditions and the price situation. An additional block has been included in this survey round for assessing the outlook on key parameters for the two subsequent quarters (Q3:2023-24 and Q4:2023-24). The results for the 36th round i.e., for Q4:2022-23 were released in the public domain on April 06, 2023.[10]
RBI has launched the 102nd round of the quarterly Industrial Outlook Survey (IOS) of the Indian manufacturing sector for the reference period April-June 2023. The survey assesses business sentiment for the current quarter (Q1:2023-24) and expectations for the ensuing quarter (Q2:2023-24), based on qualitative responses on a set of indicators pertaining to demand conditions, financial conditions, employment conditions and the price situation. The survey provides useful insight into the performance of the manufacturing sector. An additional block has been included in this survey round for assessing the outlook on key parameters for the two subsequent quarters (Q3:2023-24 and Q4:2023-24). The results of the 101st round i.e., for Q4:2022-23 were released in public domain on April 6, 2023.[11]
RBI released the April 2023 issue of its monthly Bulletin. The Bulletin includes Monetary Policy Statement April 3, 5 and 6, 2023, Monetary Policy Report April 2023, one speech, five articles and current statistics. The five articles are:
State of the Economy;
Recent Regime Reversal in Inflation: The Indian Experience;
Capital Outlay of Indian States: An Empirical Assessment of its Role and Determinants;
Industrial Relations Code and Labour Productivity: A Cross-Country Meta-Analysis; and
A Composite Indicator of Realty Sector Activity in India.[12]
RBI issued Directions under Section 35 A read with Section 56 of the Banking Regulation Act, 1949 to The Suri Friends' Union Co-operative Bank Limited, Suri (West Bengal) vide Directive No.CO.DOS.SED.No.S-2574/12-07-005/2O22- 23 dated July 21, 2022, for a period of six months up to January 22, 2023. RBI is satisfied that in the public interest, it is necessary to extend the period of operation of Directive No.CO.DOS.SED.No.S2574/12-07- 005/2022-23 dated July 21, 2022, issued to The Suri Friends' Union Co-operative Bank Limited, Suri (West Bengal), as modified vide Directive DOR.MON.D-63/12.29.046/2022- 23 dated January 20, 2023. Accordingly, RBI, in the exercise of the powers vested in it under sub-section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949, hereby directs that Directive No. CODOS.SED.No.S2574/12-07-O0512022-23 dated July 21, 2022, issued to The Suri Friends' Union Co-operative Bank Limited, Suri (West Bengal) shall continue to apply to the bank for a further period of three months from April 23, 2023, to July 22, 2023, subject to review.[13]
RBI has extended the directions issued to United India Co-operative Bank Limited, Nagina, Bijnor (U.P.) for a period of three (03) months from April 23, 2023, to July 22, 2023 subject to review. The bank has been under directions from the close of business of July 22, 2022, vide directive order CO.DOS.SED.No.S2573/12-07-005/2022-23 dated July 21, 2022, issued under section 35 A read with section 56 of the Banking Regulation Act, 1949 (AACS). The said directions were extended till April 22, 2023, vide directive ref. DOR.MON.No.D64/12.28.085/2022-23 dated January 20, 2023.[14]
2. Bangladesh
In accordance with the High-Value Department of Offsite Supervision’s Circular Letter No-11 dated 13th April 2023, the activities of BACH & BEFTN will be conducted on 19th, 20th and 21st April 2023 as public holidays.
BACH High-Value Clearing – Present Cut off Time 10:30 AM – Return Cut off Time 12:00 PM
Regular Value Clearing – Present Cut off Time 11:PM – Return Cut off time 1:30PM.[15]
As per the Statistics Department Circular No. 01/2006 dated 05 July 2006 and Source: DS, NBDCS-1(3)2015, dated 15 September 2015 regarding the abovementioned matter. According to the circular, non-bank financial institutions receiving deposits have been regularly submitting the sector-wise liability and asset information of the respective month to the department by the 20th of the following month through the NBDC statement on a monthly basis. A financial survey of Bangladesh is prepared on the basis of NBDC statements and information received from banks, which is used to transmit information to various international organisations including monetary policy formulation of the country. In view of the demand of the higher authority, the deadline for submission of the statement has been rescheduled to the 15th instead of the 20th in order to speed up the work of the financial survey. In this situation, the following instructions have been issued with the approval of the higher authorities for the regular submission of NBDC statements by the non-bank financial institutions to the Statistics Department of Bangladesh Bank:
The NBDC statement for the months after May 2023 must be submitted to this department through the existing Rationalized Input Template (RIT) by the 15th of the following month.
To facilitate the submission of correct and accurate details of financial institutions, the guidelines published by this department titled ‘Guidelines to Fill in the NBF1 Returns 1,2 & 3 should be followed.
As per Section 41(2) of the Financial Institutions Act 1993, the concerned department is within the prescribed period and accuracy.[16]
3. Sri Lanka
The Phase II subscription for ISINs LKA18223J205 and LKA36424D192 is now open until 3.30 pm of the business day prior to the settlement date (i.e., 20.04.2023) at the WAYRs determined for the said ISINs at the auction. The aggregate eligible amount for subscription from the said maturities would be 25% of the aggregate amount offered at the auction. In the event of oversubscription, allocation will be made based on aggregate successful participation by participants at the auction. Any bid for subscription is required to be forwarded via email to ‘fopdd@cbsl.lk’ within the stipulated time period through an Authorized Primary Dealer. The minimum bidding requirement for the primary auction remains applicable for Phase II. The date of settlement is 21 April 2023.[17]
Further to the T-bill auction held on 19 April 2023, Rs. 4,041 million was raised at phase II, from the Treasury bills bearing the International Securities Identification Numbers (ISINs) LKA18223J205 and LKA36424D192 at the Weighted Average Yield Rates of 24.97% and 22.96% respectively, determined at the auction. The date of settlement is 21 April 2023.[18]
[1] Notification: RBI/2023-24/17, April 20, 2023, Reserve Bank of India [2] Press Release: 2023-2024/72, April 17, 2023, Reserve Bank of India [3] Press Release: 2023-2024/75, April 18, 2023, Reserve Bank of India [4] Press Release: 2023-2024/78, April 18, 2023, Reserve Bank of India [5] Press Release: 2023-2024/79, April 18, 2023, Reserve Bank of India [6] Press Release: 2023-2024/80, April 19, 2023, Reserve Bank of India [7] Press Release: 2023-2024/91, April 20, 2023, Reserve Bank of India [8] Press Release: 2023-2024/92, April 20, 2023, Reserve Bank of India [9] Press Release: 2023-2024/97, April 21, 2023, Reserve Bank of India [10] Press Release: 2023-2024/98, April 21, 2023, Reserve Bank of India [11] Press Release: 2023-2024/99, April 21, 2023, Reserve Bank of India [12] Press Release: 2023-2024/106, April 21, 2023, Reserve Bank of India [13] Press Release: 2023-2024/109, April 21, 2023, Reserve Bank of India [14] Press Release: 2023-2024/110, April 21, 2023, Reserve Bank of India [15] PSD Circular Letter No. 03: April 17, 2023, Bangladesh Bank [16] SD Circular Letter No. 02: April 17, 2023, Bangladesh Bank [17] Public Debt Department, April 19, 2023, Central Bank of Sri Lanka [18] Public Debt Department, April 21, 2023, Central Bank of Sri Lanka
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