Feb-2016

A SUMMARY OF NOTIFICATIONS ISSUED BY RBI DURING FEBRUARY 2016

RTGS Service Charges
RBI had introduced service charges on members for all outward RTGS transactions w.e.f. Oct 1, 2011. These have been revised from 01.04.2016. Inward transactions of the members will not attract any service charges and will continue to be free, as hitherto.
RTGS service charges consist of monthly membership fee and processing charges per transaction, as follows:
(i) Monthly Membership Fee (exclusive of service tax) : 
Scheduled Commercial Banks (SCB): Rs. 5,000
Banks other than SCBs, Primary Dealers, clearing entities, other special entities, etc.: Rs. 2,500
(ii) Processing charge per transaction : Every outward transaction will attract flat processing charge at the earlier cap of Rs.0.50 (exclusive of service tax) and a time varying charge as under (Time of Settlement at RBI. Time varying charge per outward transaction (in addition to flat processing charge) (exclusive of service tax)
1 08:00 hours 11:00 hours Nil 2 After 11:00 hours 13:00 hours Rs. 2.00 3 After 13:00 hours 16:30 hours Rs. 5.00 4 After 16:30 hours Rs. 10.00 As there is no change in the minimum or maximum time varying charge, the maximum charges that can be recovered by a member (if it so desires) from its customers will remain unchanged as under:
Inward transactions : Free Outward transactions
1. Rs. 2 lakh to Rs. 5 lakh : Rs. 25 + applicable time varying charge, subject to a maximum of Rs. 30/-.
2. Above Rs. 5 lakh : Rs. 50 + applicable time varying charge, subject to a maximum of Rs. 55/-.
RBI will calculate service charges on a monthly basis for each member and the amount will be debited from the current account of the respective member maintained with Deposit Accounts Department, Reserve Bank of India, Mumbai at the end of the month.
Implementation of Indian Accounting Standards (Ind AS)
Ministry of Corporate Affairs (MCA), Govt. of India has notified the Companies (Indian Accounting Standards) Rules, 2015 on February 16, 2015.
RBI has advised (11.02.16) that scheduled commercial banks (excluding RRBs) shall follow the Indian Accounting Standards as notified under the Companies (Indian Accounting Standards) Rules, 2015 and guideline issued by RBI in this regard, in the following manner:
1. Banks shall comply with the Indian Accounting Standards (Ind AS) for financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 or thereafter. Ind AS shall be applicable to both standalone financial statements and consolidated financial statements. “Comparatives” shall mean comparative figures for the preceding accounting period.
2. Banks shall apply Ind AS only as per the above timelines and shall not be permitted to adopt Ind AS earlier.
Further the holding, subsidiary, joint venture or associate companies of banks shall be prepare Ind AS based financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 and thereafter.
Steering Committee : Ind AS implementation is likely to significantly impact the financial reporting systems and processes which need to be planned, managed, tested and executed in advance. Banks are to set up a Steering Committee headed by an official of the rank of an Executive Director (or equivalent) comprising members from cross-functional areas of the bank to immediately initiate the implementation process. The Audit Committee of the Board shall oversee the progress of the Ind AS implementation process and report to the Board at quarterly intervals.
Banks shall assess the impact of the Ind AS implementation on their financial position including the adequacy of capital, taking into account the Basel III capital requirements and place quarterly progress reports to their Boards. Banks also need to be in preparedness to submit proforma Ind AS financial statements to the Reserve Bank from the half-year ended September 30, 2016, onwards.
Banks shall disclose in the Annual Report, the strategy for Ind AS implementation, including the progress made in this regard. These disclosures shall be made from the financial year 2016-17 until implementation.
Revision of fee structue by CERSAI
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (CERSAI) has revised the fee as under, w.e.f 1.2.2016:
1. Creation or modification of Security Interest in favour of secured creditors: (FORM I) – Rs.100 for a loan above Rs.5 lakh and Rs.50 for a loan upto Rs.5 lakh.
2. Satisfaction of any existing Security Interest (FORM II): no charges
3.Securitisation or reconstruction of financial assets (FORM III) – Rs.500
4. Satisfaction of securitisation or reconstruction transactions (FORM IV) – Rs.50
5. Any application for information recorded / maintained in the Register by any person – Rs.10
6. Condonation of delay up to 30 days – Not exceeding 10 times of the basic fee, as applicable.
Modifications in the Interest Rate Cap under Credit Guarantee Scheme (CGS) of CGTMSE 
On 30.09.15, CGTMSE had placed the interest cap up to 2% and 3% over the Base Rate for loans up to  50 lakh and loans above  50 lakh respectively on loans eligible for guarantee cover. CGTMSE decided (Nov 16, 2015) to restore the earlier Interest Rate Cap of 4% over the Base Rate i.e. any credit facility which has been sanctioned by MLI, under Credit Guarantee Scheme (CGS), to an eligible borrower, with interest rate more than 4% over its Base Rate (BR) will not be eligible for coverage under the CGS.
Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards
Presently, the assets allowed as the Level 1 High Quality Liquid Assets (HQLAs) for the purpose of computing LCR, inter alia, include Govt. securities in excess of the minimum SLR requirement, and within the mandatory SLR requirement, Government securities to the extent allowed by RBI, under Marginal Standing Facility [presently 2% of the bank’s NDTL] and under Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) [presently 5% of the bank’s NDTL].
RBI decided (11.02.16) that henceforth, in addition to the above assets, banks can reckon govt. securities held by them up to another 3% of their NDTL under FALLCR within the mandatory SLR requirement as level 1 HQLA for computing their LCR. Hence the total carve-out from SLR available to banks would be 10% of their NDTL.
Legal Guardianship Certificates issued under the Mental Health Act, 1987
In its circular dated Jan 13, 2014, banks were advised by RBI to take note of the legal provisions in the Mental Health Act, 1987 and that they may rely on and be guided by the orders issued by the competent authority, under the Act, appointing guardians/ managers for the purposes of opening / operating bank accounts.
RBI observed that banks are insisting on guardianship certificate from all mentally ill persons and clarified (11.02.16) that provision of the said circular is not intended to mandate banks to insist on  appointment of a guardian as a matter of routine from every person “who is in need of treatment by reason of any mental disorder”. Banks should seek appointment of a guardian only in such cases where they are convinced on their own or based on documentary evidence available, that the concerned person is mentally ill and is not able to enter into a valid and legally binding contract.
Post Office (Postal Orders/Money Orders), 2015
Further to notification dated December 29, 2015 RBI, on 04.02.16, granted general permission to any person to buy foreign exchange from any post office in India in the form of postal order or money order.
Definition of “Currency”, 2015
Further to notification dated Dec 29, 2015, RBI on 04.02.16, clarified that debit cards, ATM cards or any other instrument which can be used to create a financial liability may be defined as currency.
Foreign Exchange Management (Export and Import of Currency) Regulations, 2015
RBI on 04.02.16, issued following clarifications:
A. Export and import of Indian currency and currency notes
a) Any person resident in India,
i. may take outside India (other than to Nepal and Bhutan) currency notes of Govt. of India and RBI notes up to an amount not exceeding Rs.25,000.
ii. may take or send outside India (other than to Nepal and Bhutan) commemorative coins not exceeding two coins each.
iii. who had gone out of India on a temporary visit, may bring into India at the time of his return from any place outside India (other than from Nepal and Bhutan), currency notes of Govt. of India and RBI notes up to an amount of Rs.25,000.
b) Any person resident outside India, not being a citizen of Pakistan or Bangladesh, and visiting India,
i. may take outside India currency notes of Govt. of India and RBI notes up to an amount not exceeding Rs.25,000 per person
ii. may bring into India currency notes of Govt. of India and RBI notes up to an amount not exceeding Rs.25,000 (Rupees Twenty Five Thousand only) per person
B. Import of Foreign Exchange into India
A person,
i. may send into India without limit foreign exchange in any form other than currency notes, bank notes and travelers cheques;
ii. may bring into India from any place outside India without limit foreign exchange subject to the condition that such person makes, on arrival in India, a declaration to the Customs authorities in Currency Declaration Form (CDF). It shall not be necessary to make such declaration where the aggregate value of the foreign exchange in the form of currency notes, bank notes or travelers cheques brought in by such person at any one time does not exceed US$10,000 (US Dollars ten thousand) or its equivalent and/ or the aggregate value of foreign currency notes brought in by such person at any one time does not exceed US$ 5,000 (US Dollars five thousand) or its equivalent.
C. Export and Import of currency to or from Nepal and Bhutan
A person may-
i. take or send out of India to Nepal or Bhutan, currency notes of Govt. of India and RBI notes (other than notes of denominations of above Rs.100 in either case) provided that an individual travelling from India to Nepal or Bhutan can carry RBI notes of denomination Rs.500/- and/or Rs.1000/- up to a limit of Rs.25,000/- ;
ii. bring into India from Nepal or Bhutan, currency notes of Govt. of India and RBI notes (other than notes of denominations of above Rs.100 in either case) ;
iii. take out of India to Nepal or Bhutan, or bring into India from Nepal or Bhutan, currency notes being the currency of Nepal or Bhutan.
D. Prohibition on Export of Indian Coins
No person shall take or send out of India the Indian coins which are covered by the Antique and Art Treasure Act, 1972.