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  • Writer's pictureAK & Partners

AKP Banking & Finance Digest- October 10, 2022

  1. INDIA

The Reserve Bank of India (“RBI”) has launched a new SupTech initiative named “दक्ष (DAKSH) - Reserve Bank’s Advanced Supervisory Monitoring System”, which is expected to make the Supervisory processes more robust.).

‘दक्ष (DAKSH)’ is a web-based end-to-end workflow application through which RBI shall monitor compliance requirements in a more focused manner with the objective of further improving the compliance culture in Supervised Entities (SEs) like Banks, NBFCs, etc. The application will also enable seamless communication, inspection planning and execution, cyber incident reporting and analysis, provision of various MIS reports etc., through a Platform which enables anytime-anywhere secure access.[1]

RBI has directed all Credit Information Companies (“CICs”) which are holding a Certificate of Registration under Section 5(2) of the Credit Information Companies (Regulation) Act, 2005, to appoint an Internal Ombudsman (“IO”) at the apex of their internal grievance redress mechanism by April 1, 2023. In this regard, RBI has issued a direction titled ‘Appointment of Internal Ombudsman by the Credit Information Companies[2]’ which covers, the appointment/tenure, role and responsibilities, procedural guidelines, and oversight mechanism for the IO. Under the mechanism, all complaints that are partly or wholly rejected by CICs will be reviewed by the IO before the final decision of the CIC is conveyed to the complainant. The IO will not entertain any complaints directly from the members of the public.[3]

RBI has released a Concept Note on Central Bank Digital Currency (“CBDC”) for India.

The purpose behind the issue of this Concept Note is to create awareness about CBDCs in general and the planned features of the Digital Rupee (e₹). The note discusses key considerations such as technology and design choices, possible uses of the Digital Rupee, issuance mechanisms, etc and examines the implications of the introduction of CBDC on the banking system, monetary policy, and financial stability, and analyses privacy issues.[4]

RBI has imposed a monetary penalty of INR 20,00,000 (Indian Rupees Twenty Lakh only) on Vasai Vikas Sahakari Bank Ltd., Vasai, Maharashtra for non-compliance with RBI directions on ‘Frauds monitoring and reporting mechanism’ because the bank had reported fraud with delay.[5]

RBI has imposed a monetary penalty of INR 28,00,000 (Indian Rupees Twenty-Eight Lakhs only) on Rajarambapu Sahakari Bank Ltd. Peth, Sangli for non-compliance with RBI directions on ‘Customer Protection - Limiting Liability of Customers of Co-operative Banks in Unauthorized Electronic Banking Transactions’ and on ‘Interest Rate on Deposits’.

The bank had (i) not provided a direct link for its customers to lodge complaints, with a specific option to report unauthorized electronic banking transactions, on the home page of its website and (ii) not paid applicable interest on balance amounts lying in current accounts of deceased individual depositors/ sole proprietorship concerns while making repayments to the claimants.[6]

RBI has imposed a monetary penalty of INR 18,50,000 (Indian Rupees Eighteen Lakh Fifty Thousand only) on Nagpur Nagarik Sahakari Bank Ltd., Nagpur for non-compliance with RBI directions on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.

The bank, despite being ineligible, had accepted fixed deposits from other Urban Co-operative Banks.[7]

RBI has imposed a monetary penalty of INR 50,000 (Indian Rupees Fifty Thousand only) on The Lunawada Peoples Co-operative Bank Ltd., Mahisagar (Gujarat) for contravention of directions issued by RBI on ‘Loans and advances to directors, relatives and firms/concerns in which they are interested’ and ‘Loans and advances to directors etc - directors as surety/guarantors - Clarification’.

The bank had sanctioned three loans to the relatives of its directors and sanctioned five loans, wherein directors’ relatives stood as surety/guarantors, resulting in contravention of the directions mentioned above issued by RBI.[8]

RBI has extended the directions issued to Shushruti Souharda Sahakara Bank Niyamita, Bengaluru, Karnataka from October 08, 2022, to January 07, 2023.[9]

2. Sri Lanka

The Monetary Board of the Central Bank of Sri Lanka has 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 % and 15.50 %, respectively.[10]

[1] Press Release: 2022-2023/1005, Reserve Bank of India, October 06, 2022.

[2] RBI/2022-23/124 CEPD.PRD.No.S806/13-01-008/2022-23, Reserve Bank of India, October 06, 2022.

[3] Press Release: 2022-2023/1003, Reserve Bank of India, October 06, 2022

[4] Press Release: 2022-2023/1012, Reserve Bank of India, October 07, 2022.

[5] Press Release: 2022-2023/987, Reserve Bank of India, October 03, 2022.

[6] Press Release: 2022-2023/988, Reserve Bank of India, October 03, 2022.

[7] Press Release: 2022-2023/939, Reserve Bank Of India, October 03, 2022.

[8] Press Release: 2022-2023/990, Reserve Bank of India, October 03, 2022.

[9] Press Release: 2022-2023/1016, Reserve Bank of India, October 08, 2022.

[10] Monetary Policy Review: No. 07, Central Bank of Sri Lanka, October 06, 2022.


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


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