Weekly Round-up | Updates
1. India
As per the Reserve Bank of India’s (RBI) mandate, all government transactions done by agency banks for the financial year 2022-23 must be accounted for within the same financial year. Accordingly, several arrangements are put in place to report and account for government transactions for March 31, 2023, which include: (1) All agency banks should keep their designated branches open for over-the-counter transactions related to government transactions up to the normal working hours on March 31, 2023, (2) Transactions through National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) System will continue up to 2400 hours as hitherto on March 31, 2023, (3) Special clearing will be conducted for the collection of government cheques on March 31, 2023, for which the Department of Payment and Settlement Systems (DPSS), (4) Regarding reporting of Central and State Government transactions to RBI, including uploading of GST/ TIN2.0/ e-receipts luggage files, the reporting window of March 31, 2023, will be kept open till 1200 hours noon on April 1, 2023.[1]
1.2. RBI imposes monetary penalties on several banks
RBI has imposed monetary penalties on several banks for contravention of rules, orders, acts, etc., of RBI.
1.2.1. Imperial Urban Co-operative Bank Ltd., Jalandhar, Punjab – RBI has imposed, by an order dated March 10, 2023, a monetary penalty of ₹1 lakh (Rupees One Lakh only) on Imperial Urban Co-operative Bank Ltd., Jalandhar, Punjab (the bank) for contravention of Section 35A read with Section 56 of the Banking Regulation Act, 1949. 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.[2]
1.2.2. Noble Co-operative Bank Ltd., Noida – RBI has imposed, by an order dated March 16, 2023, a monetary penalty of ₹2 lakh (Rupees Two lakh only) on the Noble Co-operative Bank Ltd., Noida (the bank) for contravention of Section 35 A read with Section 56 of the Banking Regulation Act, 1949. 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.[3]
1.2.3. Raigad Sahakari bank Ltd., Mumbai – RBI has, by an order dated March 16, 2023, imposed a monetary penalty of ₹1 lakh (Rupees One lakh only) on Raigad Sahakari bank Ltd., Mumbai (the bank) for contravention of operational instructions issued under the Supervisory Action Framework (SAF). 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 (the Act), taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.[4]
1.2.4. RBL Bank Limited – RBI has, by an order dated March 06, 2023, imposed a monetary penalty of ₹2,27,25,000(Rupees Two crore twenty-seven lakh twenty-five thousand only) on RBL Bank Limited (the bank) for non-compliance with certain provisions of the directions issued by RBI on ‘Internal Ombudsman Scheme, 2018’, ‘Fair Practices Code for Lenders’, ‘Credit Card Operations of Banks’, ‘Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks’ and ‘Recovery Agents engaged 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 sections 46 (4) (i) of the Banking Regulation Act, 1949 (the Act).[5]
1.2.5. Smriti Nagrik Sahakari Bank Maryadit, Mandsaur (Madhya Pradesh) – RBl has imposed, by an order dated March 14, 2023, a monetary penalty of ₹4 lakh (Rupees Four lakh only) on Smriti Nagrik Sahakari Bank Maryadit, Mandsaur, (Madhya Pradesh) (the bank) for contravention of/non-compliance with directions issued by RBI on exposure norms & statutory/other restrictions on UCBs and Know Your Customer (KYC). 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.[6]
1.2.6. Jila Sahakari Kendriya Bank Maryadit, Raisen (Madhya Pradesh) – RBl has imposed, by an order dated March 15, 2023, a monetary penalty of ₹50,000 (Rupees Fifty Thousand only) on Jila Sahakari Kendriya Bank Maryadit, Raisen (Madhya Pradesh) (the bank) for contravention of/non-compliance with the provisions of the Banking Regulation Act, 1949 (the Act) and directions issued by NABARD on submission of returns 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 Act taking into account the failure of the bank to adhere to the aforesaid directions issued.[7]
1.2.7. Lokmangal Co-operative Bank Ltd., Solapur (M.H.) – RBl has imposed, by an order dated March 14, 2023, a monetary penalty of ₹3 lakh (Rupees Three lakh only) on Lokmangal Co-operative Bank Ltd., Solapur (the bank) for contravention of/non-adherence with the directions issued by RBI to urban co-operative banks on exposure norms and statutory/other restrictions-UCBs. 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.[8]
1.3. RBI releases RBI Bulletin – March 2023
RBI released the March 2023 issue of its monthly bulletin. The bulletin includes five speeches, five articles and current statistics. The five articles are I. State of the Economy; II. Consumer Price Index: Aggregation Method Matters; III. Financial Stocks and Flow of Funds of the Indian Economy 2020-21; IV. Application of Growth-at-Risk (GaR) Framework for Indian GDP; and V. Subnational Borrowings in India – Volatilities and Determinants of State Government Securities (SGS) Spread.[9]
1.4. RBI announces rate of interest on Government of India Floating Rate Bond 2033
The rate of interest on the Government of India Floating Rate Bond 2033 (GOI FRB 2033) applicable for the half year March 22, 2023, to September 21, 2023, shall be 8.51 per cent per annum. It may be recalled that FRB 2033 carries a coupon, which has a base rate equivalent to the average of the Weighted Average Yield (WAY) of the last three auctions (from the rate fixing the day, i.e., March 22, 2023) of 182 Day T-Bills, plus a fixed spread (1.22 per cent).[10]
Shri Shaktikanta Das, Governor, Reserve Bank of India (RBI), today laid the foundation stone for the establishment of a “Greenfield Data Centre’ and ‘Enterprise Computing & Cybersecurity Training Institute’ in Bhubaneswar, Odisha. The Governor in his remarks acknowledged the critical role played by technology in supporting the activities of the financial sector and RBI over the years and recently in facilitating a robust recovery from the pandemic. He highlighted the need for augmenting the existing computing infrastructure of RBI supported by cutting-edge facilities for research and capacity building in emerging areas straddling central banking, technology and cybersecurity for a future-ready RBI.[11]
1.6. RBI to conduct 5-day Variable Rate Repo auction under LAF on March 24, 2023
On a review of current and evolving liquidity conditions, Reserve Bank of India has decided to conduct a fine-tuning 5-day Variable Rate Repo (VRR) auction for the fortnight beginning March 24, 2023, for a notified amount of ₹75,000 crores, instead of the main operation of a 14-day variable rate Repo/ Reverse Repo auction.[12]
1.7. 601st Meeting of Central Board of the Reserve Bank of India
The 601st meeting of the Central Board of Directors of Reserve Bank of India was held at Hyderabad under the Chairmanship of Shri Shaktikanta Das, Governor. The Board in its meeting reviewed the global and domestic economic situation and associated challenges including the impact of current global geopolitical developments. Further, the Board discussed the Reserve Bank’s activities during the current accounting year 2022-23. The Board also approved the budget for the accounting year 2023-24.[13]
1.8. RBI imposes monetary penalty on Karur Vysya Bank Ltd.
Reserve Bank of India (RBI) has, by an order dated March 21, 2023, imposed a monetary penalty of ₹30 lakh (Rupees Thirty lakh only) on Karur Vysya Bank Ltd. (the bank) for non-compliance with certain provisions of the Reserve Bank of India (frauds- classification and reporting by commercial banks and select FIs) Directions 2016. 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) of the Banking Regulation Act, 1949.[14]
In terms of GOI Notifications F.No.4(19) – W&M/2014 dated March 04, 2016 (SGB 2016-II -Issue date March 29, 2016) and F.No.4(7) – W&M/2016 dated August 29, 2016 (SGB 2016-17 Series II -Issue date September 30, 2016) on sovereign gold bonds scheme, premature redemption of the gold bond may be permitted after fifth year from the date of issue of such gold bond on the date on which interest is payable. Accordingly, the due date of premature redemption of the above two tranches shall be March 29, 2023 (March 30, 2023, being a holiday).[15]
2. Bangladesh
Bangladesh Bank informed under the 5,000 crore refinancing scheme for the agriculture sector to ensure the food security of the country, the cattle fattening sector has been included with the sectors mentioned in the said paragraph. In this case, the cumulative monthly statement of disbursement of loans under the Alocha Scheme. The directive will be effective immediately.[16]
2.2. Expenditure related to the promotion of Bangla QR usage shown as part of CSR
According to the Sustainable Development Goals, the ‘Cashless Bangladesh 2023-2024’ initiative has been taken to make 75 per cent of all transactions in the country online or cashless by 2027 by bringing CMSMEs, micro-merchants and low-income people under financial inclusion by making the transactions of all small and large traders technology-dependent. As a part of that, banks and financial institutions are spending on CSR in order to provide free payment services to the public through Bangla QR. In view of this, Banks and Financial Institutions are required to display their following expenditure in the CSR sector till 31st December 2023.
- Merchant at the rate determined by Bangladesh Bank in respect of all payments accepted through Bangla QR Discount Rate (MDR) • Interbank Reimbursement Fee (IRF) Charges: • All campaigns related to the campaign under the Cashless Bangladesh Initiative, all related expenses related to the payment and infrastructure of the Qurbani Haats operated through it and the expenses related to the campaigns undertaken for the promotion and dissemination of Bangla QR.
- Under the “Cashless Bangladesh Initiative”, travel allowance, accommodation, hotel bills etc., of the officials of the concerned institutions or expenses considered as travel allowance cannot be displayed as CSR expenses. Only the banks and financial institutions that have joined the initiative of “Cashless Bangladesh” can take this opportunity.
- The items mentioned in paragraph no. 2 are suggested to be displayed in other sectors of the reporting fee obtained vide SFD Circular Setter No.-01, Dated: 10th April 2012. Moreover, the information about Alota Rayas should also be forwarded to the Payment Systems Department on such a basis.[17]
3. Sri Lanka
3.1. Treasury Bill Issuance held on March 22nd, 2023
Further to the T-bill auction held on March 22nd, 2023, Rs. 31,250 million being the maximum aggregate amount offered at phase II, was raised from the treasury bills bearing the International Securities Identification Numbers (ISINs) LKA09123F230, LKA18223I223 and LKA36424C228 at the Weighted Average Yield Rates of 26.23%, 26.12% and 24.32% determined at the auction, out of the total market subscription of Rs. 43,732 million. The date of settlement is 24 March 2023.[18]
[1] Notification: RBI/2022-23/186, March 21, 2023, Reserve Bank of India [2] Press Release: 2022-2023/1886, March 20, 2023, Reserve Bank of India [3] Press Release: 2022-2023/1887, March 20, 2023, Reserve Bank of India [4] Press Release: 2022-2023/1892, March 20, 2023, Reserve Bank of India [5] Press Release: 2022-2023/1891, March 20, 2023, Reserve Bank of India [6] Press Release: 2022-2023/1890, March 20, 2023, Reserve Bank of India [7] Press Release: 2022-2023/1889, March 20, 2023, Reserve Bank of India [8] Press Release: 2022-2023/1888, March 20, 2023, Reserve Bank of India [9] Press Release: 2022-2023/1895, March 21, 2023, Reserve Bank of India [10] Press Release: 2022-2023/1896, March 21, 2023, Reserve Bank of India [11] Press Release: 2022-2023/1898, March 22, 2023, Reserve Bank of India [12] Press Release: 2022-2023/1907, March 23, 2023, Reserve Bank of India [13] Press Release: 2022-2023/1911, March 24, 2023, Reserve Bank of India [14] Press Release: 2022-2023/1914, March 24, 2023, Reserve Bank of India [15] Press Release: 2022-2023/1916, March 24, 2023, Reserve Bank of India [16] ACD Circular Letter No – 02, March 21, 2023, Bangladesh Bank [17] SFD Circular No.01, March 23, 2023, Bangladesh Bank [18] Public Debt Department, March 24, 2023, Central Bank of Sri Lanka
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.
