AK & Partners
AKP Banking & Finance Digest- March 6, 2023
Updated: Mar 7
Weekly Round-Up | Updates
1.1RBI advises Regulated Entities about the Designation of 1 individual and 2 organisations under Section 35(1)(a) and 2(1) (m) of the Unlawful Activities (Prevention) Act, 1967
As per the Master Directions on Know Your Customer (KYC) and the Gazette notifications dated February 17, 2023 of the Ministry of Home Affairs (MHA) in respect of one individual and two organizations which have been declared as ‘Individual Terrorists’ and ‘Terrorist Organisations’ and have been listed in the Schedule IV and I of the UAPA 1967, under Section 35(1)(a) and 2(1)(m) of UAPA 1967. Reserve Bank of India (RBI) has advised Regulated Entities (REs) to take note of the aforementioned Gazette notifications issued by MHA for necessary compliance. REs shall also take note of any future amendments to Schedule I and IV of the UAPA, 1967, for immediate necessary compliance.
1.2 RBI imposes monetary penalty on the Rajkot Commercial Co-operative Bank Ltd., Rajkot (Gujarat)
RBI has, by an order dated February 21, 2023, imposed a monetary penalty of ₹4 lakh (Rupees Four Lakh only) on the Rajkot Commercial Co-operative Bank Ltd., Rajkot (Gujarat) (the bank) for contravention of directions issued by RBI on ‘Prudential Norms Income Recognition, Asset Classification, Provisioning and Other Related Matters’, ‘Placement of Deposits with Other Banks by Primary (Urban) Cooperative Banks (UCBs)’ and ‘Guidelines for Classification and Valuation of Investments by Banks’. This penalty has been imposed in the exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
1.3 RBI imposes monetary penalty on Vyaparik Audhyogik Sahakari Bank Limited, Indore, Madhya Pradesh
RBl has imposed, by an order dated February 20, 2023, a monetary penalty of ₹1 lakh (Rupees One lakh only) on Vyaparik Audhyogik Sahakari Bank Limited, Indore (Madhya Pradesh) (the bank) for contravention of/ nonadherence with the directions issued by RBI to Urban Co-operative Banks on Exposure Norms & Statutory/Other Restrictions-UCBs and investments by Primary (Urban) Cooperative Banks. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
1.4 RBI releases Compendium of Business Continuity Measures taken by the regulator during the COVID-19 Pandemic
A compendium on Business Continuity Measures undertaken by the RBI during the COVID-19 Pandemic was released on February 17, 2023, at the annual conference of the Corporate Strategy and Budget Department of RBI by Dr Michael Debabrata Patra, Deputy Governor. To tackle the challenges posed by the pandemic, RBI mobilised on an unprecedented scale and speed to put in place a cross-functional response to safeguard the lives and livelihood of the people; insulate the economy and the financial sector; ensure uninterrupted conduct of its crucial functions and maintaining business continuity; supporting its employees, service providers and other stakeholders. The compendium encapsulates the details of RBI’s fight against the COVID-19 pandemic.
1.5 RBI releases data on sectoral deployment of bank credit – January 2023
Data on sectoral deployment of bank credit for the month of January 2023 collected from 40 select scheduled commercial banks, accounting for about 93 per cent of the total non-food credit deployed by all scheduled commercial banks, are set out in Statements I and II. On a year-on-year (y-o-y) basis, non-food bank credit registered a growth of 16.7 per cent in January 2023 as compared with 8.3 per cent a year ago.
1.6 Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 - Harihareshwar Sahakari Bank Limited, Wai, Satara
RBI, vide directive CO.DOS.DSD.No.S1012/12-07-005/2022- 2023 dated May 31st, 2022, had placed Harihareshwar Sahakari Bank Limited, Wai, Satara under directions from the close of business on May 31, 2022. RBI has notified for the information of the public that, the Reserve Bank of India, 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 aforesaid directions shall continue to apply to the bank till May 31st, 2023 as per the directive DOR.MON.D79/12.07.464/2022-23 dated February 27th, 2023, subject to review.
1.7 RBI releases All-India House Price Index (HPI) for Q3: 2022-23
RBI released its quarterly House Price Index (HPI) for Q3: 2022-23, based on transaction-level data received from the registration authorities in ten major cities in India. Time series data on data on all India and city-wise HPIs are available at the Bank’s database on the Indian economy (DBIE) portal.
1.8 RBI launches the March 2023 round of Consumer Confidence Survey
RBI has been regularly conducting Consumer Confidence Survey (CCS). The March 2023 round of the survey is being launched. The survey seeks qualitative responses from households, regarding their sentiments on the general economic situation, employment scenario, price level, households income and spending. The survey is conducted regularly in 19 cities, viz., Ahmedabad, Bengaluru, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Jammu, Kolkata, Lucknow, Mumbai, Nagpur, Patna, Raipur, Ranchi and Thiruvananthapuram. The results of this survey provide useful inputs for monetary policy.
1.9 RBI launches the March 2023 round of the Inflation Expectations Survey of Households
RBI has been regularly conducting the Inflation Expectations Survey of Households (IESH). The March 2023 round of the survey is being launched. The survey aims at capturing subjective assessments of price movements and inflation, based on their individual consumption baskets, across 19 cities in India. The survey seeks qualitative responses from households on price changes (general prices as well as prices of specific product groups) in the three months ahead as well as in the one year ahead period and quantitative responses on current, three months ahead and one year ahead inflation rates. The results of this survey provide useful inputs for monetary policy.
1.10 Financial Action Task Force (FATF) calls for action on high-risk and other monitored jurisdictions – February 24, 2023
The Financial Action Task Force (FATF), vide public document ‘High-Risk Jurisdictions subject to Call for Action’ – February 24, 2023, has called on its members and other jurisdictions to refer to the statement on Democratic People’s Republic of Korea (DPRK) and Iran adopted in February 2020 which remains in effect. Further, Myanmar was added to the list of High-Risk Jurisdictions subject to a Call for Action in the October 2022 FATF plenary. FATF has called on its members and other jurisdictions to refer to the statement on Myanmar adopted in October 2022 which remains in effect.
1.11 RBI cancels Certificate of Registration of M/s Rhino Finance Private Limited
RBI in the exercise of the powers conferred under Section 45-IA (6) of the Reserve Bank of India Act, 1934, RBI has cancelled the Certificate of Registration (CoR) of M/s Rhino Finance Private Limited due to irregular lending practices.
1.12 RBI imposes monetary penalty on Amazon Pay (India) Private Limited
RBI has imposed a monetary penalty of ₹3,06,66,000/- (Rupees Three crore six lakh sixty-six thousand only) on Amazon Pay (India) Private Limited (the entity) for 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 (as updated from time to time). The penalty has been imposed in the exercise of powers vested in RBI under Section 30 of the Payment and Settlement Systems Act, 2007. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the entity with its customers.
2.1Exemption from the provision of section 26B(1) of the Bank Company Act, 1991 regarding general credit limit to electricity-producing companies
By virtue of Section 121 of the Banking Companies Act, 1991, the Bangladesh Bank has informed for the information of all concerned that in order to maintain uninterrupted supply of money necessary for power generation, any single person, organisation or power producer for the import of fuel oil and other raw materials in the said sector. The prohibition stated in the conditions of Section 26B(1) of the Bank Companies Act, 1991 in relation to granting approval from Bangladesh Bank for providing loans to the group by any bank will not be effective until 31st December 2023. However, Bangladesh Bank will determine the upper limit up to 31st December 2023 instead of the 25% upper limit mentioned in the conditions of Section 26B (1) of the Bank Companies Act, 1991.
2.2 Bangladesh Bank issues notifications for the submission of up-to-date information on its web portal
In order to confirm the reporting in Integrated Supervision System (ISS), the required information must be submitted within 5 (five) days after uploading the monthly ISS report on the designated web portal of Bangladesh Bank.
On 8 February, the Bangladesh Bank issued a notification stating in order to enhance the skills, competence and capability of bank officers, a two-phase banking diploma has been made mandatory in the eligibility list for promotion to a senior officer or equivalent posts. The Bangladesh Bank (BB) has upheld its decision to make a banking diploma mandatory for bankers to get promoted to senior officers or equivalent posts on 22nd February 2023.
3. SRI LANKA
3.1. Issuance of Treasury Bond held on 27th February 2023
Further to the Treasury bond auction held on 27 February 2023, Rs. 4,000 million, being the maximum amount offered, was raised out of the total market subscription of Rs. 11,255 million via the Direct Issuance Window (DIW) from the Treasury bond bearing the International Securities Identification Number (ISIN) LKB00527I150, at the Weighted Average Yield Rate of 29.37% determined at the auction. The date of settlement of the above issuance is 01 March 2023.
3.2. Issuance of Treasury Bill held on 01st March 2023
Further to the T-bill auction held on 01 March 2023, Rs. 21,250 million being the maximum aggregate amount offered at phase II, was raised from the Treasury bills bearing the International Securities Identification Numbers (ISINs) LKA09123F024, LKA18223I017 and LKA36424C012 at the Weighted Average Yield Rates of 29.59%, 28.64% and 27.64% determined at the auction, out of the total market subscription of Rs. 66,684 million. The date of settlement is 03 March 2023.
 Notification: RBI/2022-23/183, February 28, 2023, Reserve Bank of India  Press Release: 2022-2023/1793, February 27, 2023, Reserve Bank of India  Press Release: 2022-2023/1795, February 27, 2023, Reserve Bank of India  Press Release: 2022-2023/1796, February 27, 2023, Reserve Bank of India  Press Release: 2022-2023/1801, February 28, 2023, Reserve Bank of India  Press Release: 2022-2023/1802, February 28, 2023, Reserve Bank of India  Press Release: 2022-2023/1806, February 28, 2023, Reserve Bank of India  Press Release: 2022-2023/1810, March 01, 2023, Reserve Bank of India  Press Release: 2022-2023/1811, March 01, 2023, Reserve Bank of India  Press Release: 2022-2023/1814, March 01, 2023, Reserve Bank of India  Press Release: 2022-2023/1819, March 02, 2023, Reserve Bank of India  Press Release: 2022-2023/1824, March 03, 2023, Reserve Bank of India  BRPD Circular Letter No. 06: March 02, 2023, Bangladesh Bank  ISMD Circular No. 01: March 05, 2023, Bangladesh Bank  DFIM Circular No. 01: 22nd February, 2023, Bangladesh Bank  Public Debt Department, March 01, 2023, Central Bank of Sri Lanka  Public Debt Department, March 03, 2023, Central Bank of Sri Lanka
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