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AKP Banking & Finance Digest - September 5, 2022

Updated: Sep 22

Weekly Round-Up | Updates


  1. INDIA

1.1. RBI releases data on lending and deposit rates of SCBs for August 2022

The Reserve Bank of India(“RBI”) has released data on lending and deposit rates of scheduled commercial banks (SCBs) (excluding regional rural banks and small finance banks) for the month of August 2022. The data showed an increase in the weighted average lending rate (WALR) on fresh rupee loans of SCBs month-on-month by 24 basis points (bps) from 7.94% in June 2022 to 8.18% in July 2022. Further, the weighted average domestic term deposit rate (WADTDR) for outstanding rupee term deposits of SCBs also increased by 9 bps from 5.13% in June 2022 to 5.22% in July 2022. [1]


1.2. RBI releases data on sectoral deployment of bank credit for July 2022

The RBI released data on sectoral deployment of bank credit for the month of July 2022 that was collected from 40 select SCBs accounting for about 93% of the total non-food credit deployed by all SBCs. The data showed the continuous expansion in non-food bank credit on a year-on-year (y-o-y) basis from 5.1% in July 2021 to 15.1% growth in July 2022. [2]


1.3. RBI issued direction to Maratha Sahakari Bank Limited, Mumbai, Maharashtra

The RBI has extended the directions issued to Maratha Sahakari Bank Limited, Mumbai, Maharashtra from August 31, 2022, to November 30, 2022. [3]

1.4. RBI releases All-India HPI for Q1:2022-23

The RBI has released its quarterly house price index (“HPI”)1 (base: 2010-11=100) for Q1:2022-23, based on transaction-level data received from the housing registration authorities in ten major cities of India. All India HPI recorded an annual growth (y-o-y) of 3.5 per cent in Q1:2022-23. Also, on a sequential (q-o-q) basis, all India HPI increased by 2.2 per cent in Q1:2022-23. [4]

1.5. RBI releases guidelines on digital lending

The RBI has released guidelines on digital lending. RBI reiterated that Regulated Entities (“REs”) have to ensure that the Lending Service Provider (“LSP”) engaged by them and the Digital Lending App (“DLA”) must comply with the guidelines. Also, the RBI has given, REs, time till November 30, 2022, to comply with the said guidelines. [5]

1.6. RBI penalizes various co-operative banks

RBI has imposed monetary penalties on:

Name of the Entity

Penalty Imposed

Reason

INR 10,00,000 (Indian Rupees Ten lakhs only)



violation of directions issued under Exposure Norms and Statutory/Other Restrictions – UCBs

INR 5,00,000 (Indian Rupees five lakh only)


violation of directions issued under i) Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and ii) Know Your Customer (KYC) Guidelines – Primary (Urban) Co-operative Banks

INR 10,00,000 (Indian Rupees Ten lakh only)

for violation of directions issued under Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and Board of Directors-UCBs

​INR 55,00,000 (Indian Rupees Fifty-five lakh only)

​non-adherence of directions issued under (i) Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and (ii) Finance for Housing Schemes-UCBs

INR 10,00,000 (Indian Rupees Ten lakh only)

​violation of directions issued under i) prohibition of loans and advances to Directors and their Relatives and Firms / Concerns in which they are interested– UCBs and ii) Exposure Norms and Statutory / Other Restrictions-UCBs.

INR 10,00,000 (Indian Rupees Ten lakh only)


for violation of directions issued under Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and Establishment of Depositor Education and Awareness Fund.

​INR 1,00,000 (Indian Rupees One lakh only)

​for non-compliance with the directions issued by RBI on Know Your Customer (KYC)

INR 5,00,000 (Indian Rupees Five Lakh only)

failure to identify certain accounts as non-performing assets as per Master Circular on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs



2. Nepal


2.1. Nepal Rastra Bank issues notification regarding ITRS Guidelines 2022

The Nepal Rastra Bank has issued a letter under Section 75 of the Nepal Rastra Bank Act to permit A, B and C class banks and institutions and rehabilitation development banks to provide parallel search data in accordance with the “Research Data Collection Guidelines” from the time of implementation of the International Transaction Reporting System (ITRS) Guidelines 2022. [14]

2.2. Nepal Rastra Bank issues notification regarding ban on import of selected items

The Nepal Rastra Bank has issued a circular under Section 12 of the Foreign Exchange (Regulation) Act, 2019 to class “A” commercial banks, National level “B” class development banks and other licensed entities authorised to conduct foreign exchange transactions informing them about the complete ban on importation of selected items in Nepal. The Nepal Rastra Bank has directed the entities to comply with notification. [15]


3. Bangladesh


3.1. Bangladesh Bank issues press release on surrender/ deposit of foreign currency

The Bangladesh Bank has issued a press release directing a resident individual with citizenship of Bangladesh to not retain foreign currency worth more than or equal to USD 10,000. The circular further directed every resident Bangladeshi citizen to sell the excess amount to an authorised dealer bank/ licensed money changer, or deposit it as a resident foreign currency deposit within one month of arrival in the country. It also stated that possession of foreign currency outside the limit beyond the prescribed time, is an offence punishable under the Foreign Exchange Regulation Act, 1947 and if an unauthorised currency is found, strict action shall be taken. [16]

3.2. BB issues directions on the appointment/ reappointment of directors in financial institutions

The Bangladesh Bank (BB) has issued directions which are to be followed at the time of appointment of directors of financial institutions (FIs) in order to meet the objectives of the Financial Institutions Act,1993. The BB has pointed out that the FIs need to obtain prior approval from the BB in an event of appointment, re-appointment or dismissal of directors from FIs. It has provided that the qualifications, suitable conditions and processes provided in the notification have to be met before commencing the procedures for appointment/ reappointment etc. [17]


[1] Press Release: 2022-2023/794, Reserve Bank of India, August 30, 2022.


[2] Press Release: 2022-2023/791, Reserve Bank of India, August 30, 2022.


[3] Press Release: 2022-2023/796, Reserve Bank of India, August 30, 2022.


[4] Press Release: 2022-2023/795, Reserve Bank of India, August 30, 2022.


[5]RBI/2022-23/111 DOR.CRE.REC.66/21.07.001/2022-23, Reserve Bank of India, September 02, 2022.


[6] Press Release: 2022-2023/783, Reserve Bank of India, August 29, 2022.


[7] Press Release: 2022-2023/785, Reserve Bank of India, August 29, 2020.


[8] Press Release: 2022-2023/780, Reserve Bank of India, August 29, 2022.


[9] Press Release: 2022-2023/782, Reserve Bank of India, August 29, 2022.


[10] Press Release: 2022-2023/784, Reserve Bank of India, August 29, 2022.


[11] Press Release: 2022-2023/781, Reserve Bank of India, August 29, 2022.


[12] Press Release: 2022-2023/779, Reserve Bank of India, August 29, 2022


[13] Press Release: 2022-2023/778, Reserve Bank of India, August 29, 2022.


[14] Letter No. V.V.N.D./Policy/Information, issued by the Nepal Rastra Bank, August 29, 2022.


[15] FXMD Circular No. 06/2079-80, issued by Foreign Exchange Administration Department, the Nepal Rastra Bank, September 01, 2022.


[16] Source No: DCP (PR) 05/2022-301, issued by the Department of Communication and Publication, Bangladesh Bank, September 01, 2022.


[17] Source No: DCP (PR) 05/2022-301, issued by the Department of Communication and Publication, Bangladesh Bank, September 01, 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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