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AKP Banking & Finance Digest- January 30, 2023

Weekly Round-Up | Updates


Reserve Bank of India released updated guidelines for the safe deposit locker/safe custody article facility in a circular dated August 18, 2021, which, among other things, requires banks to engage in revised agreements with the existing locker holders by January 1, 2023. However, many customers have yet to sign the revised agreement, which has come to RBI's attention. Many times, banks have not yet informed customers that they must take certain actions before the deadline (January 1, 2023). Considering this, it has been decided to extend the deadline by which banks must gradually complete the process of renewing their agreements for existing safe deposit boxes by December 31, 2023, with intermediate goals of 50% by June 30, 2023, and 75% by September 30, 2023.

Additionally, banks have been advised to undertake the necessary arrangements to make it easier for the revised agreements to be executed by ensuring that stamp papers and other materials are readily available. Also, operations in lockers that have been frozen due to the non-execution of an agreement by January 1, 2023, shall be immediately unfrozen.

The "Fully Accessible Route" (FAR) for investment by non-residents in Government Securities - Inclusion of Sovereign Green Bonds has been announced by the Reserve Bank of India (RBI). The notification was made on January 23, 2023, and it took effect right away. RBI announced the government securities (also known as "specified securities") that were eligible for investment under the FAR in a notification dated March 30, 2020, as well as on July 7, 2022.

The government has now decided to include all Sovereign Green Bonds (SGrbS) issued during the fiscal year 2022–2023 in the list of "specified securities" under the FAR. It's crucial to note that IRDAI has previously classified and categorized SGrbS in a notification.

By order dated January 17, 2023, the Reserve Bank of India (RBI) penalized Nutan Nagarik Sahakari Bank Ltd., Ahmedabad (the bank) 26 lakh (Rupees Twenty-six lakh only) for failing to follow its direction regarding the "Co-operative Bank-Interest rate on Deposits" and "Guidelines for Issue of ATM-cum-Debit Cards by UCBs." This penalty was levied in accordance with the authority granted to RBI by Sections 46(4)(i), 56, and 47A(1)(c) of the Banking Regulation Act of 1949.

This action is based on a lack of regulatory compliance and is not meant to invalidate any agreements or transactions made by the bank with its customers.[1]

By order dated January 16, 2023, the Reserve Bank of India (RBl) penalized Samarth Sahakari Bank Ltd., Solapur (Maharashtra) (the bank) 1.50 lakh (Rupees One lakh and Fifty Thousand only) for contravention of/non-compliance with the RBI's guidelines for urban cooperative banks on income recognition and asset classification (IRAC). This penalty has been imposed in retaliation for the bank's failure to follow the directions given by RBI under Section 47A (1)(c) read in conjunction with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered by the bank with its customers.[2]

RBI had suggested introducing a framework for securitizing stressed assets in addition to the ARC route as part of the Statement on Developmental and Regulatory Policies released on September 30, 2022. It was announced that a discussion paper outlining the pertinent details of the suggested framework would be released soon. Accordingly, RBI today published the Discussion Paper on SSAF and invited feedback from stakeholders.

The discussion paper gives an overview of nine major framework components, including the asset universe, asset eligibility, minimum risk retention, regulatory framework for special purpose entities and resolution managers, access to financing for resolution managers, capital treatment, due diligence, credit enhancement, and valuation. While trying to keep structural alignment with the framework for the securitization of standard assets, it draws on similar frameworks introduced in other jurisdictions.[3]

For a period of three (03) months, from January 29, 2023, to April 28, 2023, the Reserve Bank of India (RBI) has extended the directions given to the Lucknow Urban Co-operative Bank Ltd., Lucknow (U.P.), subject to review. According to directive order LKO.DOS.SED.No. S256/10-03-556/2022-23 dated July 27, 2022, issued under Section 35A read with Section 56 of the Banking Regulation Act, 1949, the bank has been under direction as of the close of business on July 28, 2022. (AACS).

The validity of the directive, issued up to January 28, 2023 has been extended for three (03) months from January 29, 2023, to April 28, 2023, vide directive order DOR.MON. No. D-66/12.28.009/2022-23 dated January 25, 2023 subject to review. A copy of the directive order dated January 25, 2023, is displayed at the bank’s premises for the perusal of the public.[4]


The Central Bank of Bangladesh vides its DOS Circular Letter No.3 dated 24.01.2023 has given directions to all banks requiring them to submit half-yearly CRMRs and other documents. Banks are now advised to submit the required data in the excel-based data input template on a half-yearly basis (i.e., end of June and December) to the DOS of the Central Bank of Bangladesh in addition to documents listed in the aforementioned circular.

In this regard, the submission time frame for the required documents will be replaced as follows:

S.I No.

Document Types

Submission Deadline


Half-yearly excel-based data input template

Within 31st July and 31st January respectively


CRMR prepared for June & December

​Within 10th August & 10th February respectively


Half-yearly Stress Test Report

Along with half-yearly CRMR


Monthly Risk Management Report (MRMR)

Within next month of the reporting period


Monthly ERMC meeting minutes

Within 7 days of the meeting held


BRMC meeting minutes

Within 7 days of the meeting held


Yearly Board approved Risk Appetite Statement (RAS)

Within the first 2 months of the year


Board approved review report of risk management policies and effectiveness of risk management functions

Within first 2 months of the year

The Central Bank of Bangladesh vides it DMD Circular letter No.2 dated 26.01.2023 has approved the appointment of Rupali Bank Limited as primary dealer of government securities for one year with a view to activating the secondary market for the issue and post-issue purchase and sale of the Government of Bangladesh Treasury Bills and Bonds.


The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 24 January 2023, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 14.50 per cent and 15.50 per cent, respectively. The Board, having noted the recent and expected developments and projections on the domestic and global macroeconomic fronts, was of the view that the maintenance of the prevailing tight monetary policy stance is imperative to ensure that monetary conditions remain sufficiently tight to rein in inflationary pressures. Such tight monetary conditions, together with the tight fiscal policy, are expected to adjust inflation expectations downward, enabling the Central Bank to bring inflation rates towards the desired levels by end 2023, thereby restoring economic and price stability over the medium term.

[1] Press Release: 2022-2023/1596, January 23 2023, Reserve Bank of India [2] Press Release: 2022-2023/1595, January 23 2023, Reserve Bank of India [3] Press Release: 2022-2023/1614, January 25 2023, Reserve Bank of India [4] Press Release: 2022-2023/1622, January 27 2023, Reserve Bank of India

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.

* Image credits: RBI

For further queries or details, you may contact:

Mr Anuroop Omkar,

Partner, AK & Partners


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