• AK & Partners

AKP Banking & Finance Digest- April 05, 2022

Updated: Sep 22

Read this week in our update, consolidated guidelines on bank finance to NBFCs issued by RBI. RBI amended prudential guidelines with respect to bilateral netting of qualified financial contracts.

Highlights of the Week:
RBI assigns lead bank responsibility for newly created district in Meghalaya
RBI issues master circular on bank finance to Non-Banking Finance Companies
RBI amends Master Direction - Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2021
RBI amends prudential guidelines with respect to bilateral netting of qualified financial contracts



1. RBI issues master circular on Asset Reconstruction Companies

The Reserve Bank of India (RBI) has issued a master circular consolidating all the existing guidelines and guidance notes applicable to all asset reconstruction companies.[1]


2. RBI issues Master Circular on SHG-Bank Linkage Programme

RBI has issued a master circular consolidating all the existing guidelines /instructions to banks on the Self-Help Groups (SHG)-Bank linkage programme. It shall be applicable to all scheduled commercial banks. [2]


3. RBI issues master circular on guarantees and co-acceptances

RBI has issued a master circular consolidating all the existing guidelines/instructions for all scheduled commercial banks (excluding payment banks and Regional Rural Banks (RRBs)) relating to guarantees and co-acceptances.[3]


4. RBI issues master circular on Lead Bank Scheme

RBI has issued a master circular consolidating all the existing guidelines/instructions for all State Level Bankers' Committees (SLBCs), Union Territory Level Bankers' Committees (UTLBCs) convenor bank and lead banks on Lead Bank Scheme up to March 31, 2022. [4]


5. RBI issues master circular on Basel III capital regulations

RBI has issued a master circular consolidating all the prudential guidelines on Basel III capital adequacy issued to banks till June 30, 2015. It shall be applicable to all scheduled commercial banks (excluding small finance banks, payments banks and RRBs). [5]


6. RBI issues master circular on bank finance to Non-Banking Finance Companies

RBI has issued a master circular consolidating all the existing guidelines/instructions for all scheduled commercial banks (excluding RRBs) on bank finance to non-banking finance companies (NBFCs). [6]


7. RBI issues master circular on prudential norms on income recognition, asset classification and provisioning pertaining to advances

RBI has issued a master circular consolidating all the existing guidelines/instructions for all scheduled commercial banks (excluding RRBs) on prudential norms on income recognition, asset classification and provisioning pertaining to advances. [7]


8. RBI issues master circular on housing finance

RBI has issued a master circular consolidating all the existing instructions issued up to March 31, 2022 on housing finance. It shall be applicable to all scheduled commercial banks excluding RRBs.[8]


9. Implementation of Section 51A of UAPA, 1967: Update to UNSC’s Sanction List

RBI has notified the amendments made by United Nations Security Council (UNSC) to 1267/ 1989 ISIL (Da'esh) and Al-Qaida sanctions list in the following entries:[9]

  • In the entry of Emraan Ali; and

  • In the entry of the Islamic State in Iraq and the Levant – Khorasan, also known as a) Isil Khorasan b) Islamic State’s Khorasan Province c) Isis Wilayat Khorasan d) Isil’s South Asia Branch e) South Asian Chapter of Isil f) The Islamic State of Iraq and ash-Sham—Khorasan Province g) The Islamic State of Iraq and Syria—Khorasan h) Islamic State of Iraq and Levant in Khorasan Province i) Islamic State Khurasan j) ISIS-K k) ISISK l) IS-Khorasan.

10. RBI extends timeline for cassette swaps

RBI has extended the timeline for implementing lockable cassettes in ATMs which shall be swapped at the time of cash replenishment. The timeline for implementation of cassette swap in all ATMs is extended from March 31, 2022, to March 31, 2023. Banks shall establish an internal timeline that has been approved by their Board in order to meet the extended deadline and submit quarterly status reports.[10]

11. RBI amends prudential guidelines with respect to bilateral netting of qualified financial contracts

RBI had notified derivatives, repo and reverse repo transactions as a qualified financial contract in a notification dated March 9, 2021. Following this, RBI has amended prudential guidelines applicable to:[11]

  • all standalone primary dealers;

  • primary (urban) co-operative banks, state and district central cooperative banks, local area banks, regional rural banks; and

  • systemically important non-deposit taking non-banking financial companies (NBFC-ND-SIs) and deposit taking non-banking financial companies (NBFC-Ds) and housing finance companies (HFCs).

12. RBI amends Master Direction - Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2021

The Reserve Bank of India (RBI) has notified the amendment of Section 9 of the Master Direction - Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2021 (Master Direction). Wherein, investments categorized as held to maturity (HTM) shall be carried at acquisition cost, with the premium over the face value amortized over the instrument's tenor. Further, From FY 2021-22 onwards, investments in special securities received from the Government of India to help meet the bank's recapitalization requirements shall be recognized at fair value/market value on initial recognition in HTM.[12]

[1] RBI/2022-23/03DOR.SIG.FIN.REC 1/26.03.001/2022-23, Reserve Bank of India, April 1, 2022 [2] RBI/2022-23/02FIDD.CO.FID.BC. No.1/12.01.033/2022-23, Reserve Bank of India, April 1, 2022 [3] RBI/2022-23/10DOR.STR.REC.8/13.07.010/2022-23, Reserve Bank of India, April 1, 2022 [4] RBI/2022-23/11 FIDD.CO.LBS.BC. No.02/02.01.001/2022-23, Reserve Bank of India, April 1, 2022 [5] RBI/2022-23/12 DOR.CAP.REC.3/21.06.201/2022-23, Reserve Bank of India, April 1, 2022 [6] RBI/2022-23/14 DOR.CRE.REC. No.07/21.04.172/2022-23, Reserve Bank of India, April 1, 2022 [7] RBI/2022-23/15DOR.STR.REC.4/21.04.048/2022-23, Reserve Bank of India, April 1, 2022 [8] RBI/2022-23/16 DOR.CRE.REC.No.06/08.12.001/2022-23, Reserve Bank of India, April 1, 2022 [9] RBI/2022-23/18DOR.AML.REC.11/14.06.001/2022-23, Reserve Bank of India, April 04,2022

[10] RBI/2021-22/190 DCM (Plg.) No.S 1117/10.25.007/2021-22, Reserve Bank of India, March 31, 2022

[11] RBI/2021-22/189 DOR.CAP.REC. No.97/21.06.201/2021-22, Reserve Bank of India, March 31, 2022 [12] RBI/2021-22/191 DOR.MRG.REC.98/21.04.141/2021-22, Reserve Bank of India, March 31, 2022

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