• AK & Partners

AKP Banking & Finance Digest- August 22, 2022

Updated: Sep 22


1.1. RBI releases paper on charges in payment systems


The Reserve Bank of India (“RBI”) has released a discussion paper on charges in payment systems as announced in the Statement on Developmental and Regulatory Policies. The paper has sought feedback from the public which has to be submitted by October 3, 2022. The objective behind the paper is to ease friction that may arise from systemic, procedural or revenue related issues. The publication highlights different aspects relating to charges in payment systems like NEFT, UPI, RTGS, payment instruments, etc. The paper has been divided into two parts of which one is payment system and charges, and the other contains product wise discussion on charges and related aspects. It aims to ensure balance in the payment systems by highlighting different dimensions and seek stakeholder feedback on the subject[1].


1.2. RBI releases minutes of the MPC meeting held on 3-5 August 2022.


The Reserve Bank of India (“RBI”) has released the minutes of the proceedings of the Monetary Policy Committee held on August 3 to 5, 2022 as required under Section 45ZL of the Reserve Bank of India Act, 1934. The MPC in its meeting made a resolution to increase the repo rate by 50 basis points to 5.40%, adjusted the standing deposit facility (SDF) rate to 5.15 per cent, the marginal standing facility (MSF) rate and the Bank Rate to 5.65 per cent. The MPC has also decided to focus on withdrawal of accommodation stance to ensure that inflation remains within the target going forward[2].


1.3. RBI penalizes Obopay Mobile Technology Pvt. Ltd.


The Reserve Bank of India has imposed monetary penalty on Obopay Mobile Technology India Private Limited [“entity”] of INR 5,93,000 (Indian Rupees five lakh ninety-three thousand only) because of non-compliance with certain provisions of the Master Directions on Prepaid Payment Instruments (PPIs) dated August 27, 2021 (as updated from time to time) and the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016[3].


1.4. RBI cancels the license of Deccan Urban Co-operative Bank Ltd., Vijayapura, Karnataka


RBI has cancelled the license of “Deccan Urban Co-operative Bank Ltd., Vijayapura, Karnataka” [“Bank”] because the bank does not have adequate capital and earning prospects and with its present financial position, it would be unable to pay its present depositors in full. Hence, the RBI has reached to a conclusion that the continuance of the bank shall be prejudicial to the interests of its depositors and interest of the public shall be adversely affected if the bank is allowed to carry on its banking business any further[4].


1.5. RBI Issued directions to Padmashri Dr. Vithalrao Vikhe Patil Co-op. Bank Ltd., Nashik, Maharashtra.


​S.No

Name of the Cooperative Bank

Sanctions imposed

1.

Padmashri Dr. Vithalrao Vikhe Patil Co-op. Bank Ltd., Nashik, Maharashtra[5]

​The Directions stipulate certain restrictions and/or ceiling on withdrawal/acceptance of deposits.

These directions shall continue to apply to the bank for a further period of three months till November 17, 2022.


1.6. RBI penalizes The Akola Urban Co-operative Bank Ltd., Akola, Maharashtra

Name of the Entity

Penalty Imposed (in INR)

Reason

The Akola Urban Co-operative Bank Ltd., Akola, Maharashtra[6]

​Rs. 15,00,000 (Indian Rupees Fifteen lakh only)

Non-compliance with RBI directions on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters- UCBs’ (IRAC norms).



[1] Press Release: 2022-2023/719, Reserve Bank of India, August 17, 2022. [2] Press Release: 2022-2023/737, Reserve Bank of India, August 19, 2022. [3] Press Release: 2022-2023/727, Reserve Bank of India, August 18, 2022. [4] Press Release: 2022-2023/728, Reserve Bank of India, August 18, 2022. [5] Press Release: 2022-2023/720, Reserve Bank of India, August 17, 2022. [6] Press Release: 2022-2023/718, Reserve Bank of India, August 17, 2022.



Disclaimer

The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.

For further queries or details you may contact:

Mr. Anuroop Omkar,

Partner, AK & Partners

anuroop@akandpartners.in

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