Category Archives: Government News

Withdrawal of cash – Weekly limit

RBI/2016-17/158
DCM (Plg) No.1424/10.27.00/2016-16

November 25, 2016

The Chairman / Managing Director/ Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/ Regional Rural
Banks / Urban Cooperative Banks/ State Cooperative Banks/ District Central Cooperative Banks

Dear Sir,

Withdrawal of cash – Weekly limit

Please refer to our circulars DCM (Plg) Nos. 1272/10.27.00/2016-17 and 1273/10.27.00/2016-17 dated November 13 and November 14, 2016, respectively. The banks are, hereby, advised that they may continue to allow their existing customers to withdraw cash from their accounts upto ₹ 24,000/- per week, till further instructions. The said limit include withdrawals from ATMs as stipulated in our circular DCM (Plg) No.1304/10.27.00/2016-17 dated November 20, 2016.

2. Please acknowledge receipt.

Yours faithfully,

(Suman Ray)
General Manager

Withdrawal of Specified Banknotes : Cash requirements of pensioners and Armed Forces Personnel

RBI/2016-17/154
DCM (Plg) No.1384/10.27.00/2016-17

November 24, 2016

The Chairman / Managing Director/Chief Executive Officer,
Public Sector Banks / Private Sector Banks / Foreign Banks / Regional Rural Banks /
Urban Co-operative Banks / State Co-operative Banks/ District Central Co-operative Banks

Dear Sir,

Withdrawal of Specified Banknotes : Cash requirements of pensioners and Armed Forces Personnel

In view of the withdrawal of legal tender character of the Specified Banknotes (SBN) demand for cash is expected from Government officials and pensioners after the electronic payment of their salary/pension.

2. Banks are therefore advised to take appropriate steps in order to meet this likely demand for cash by:

(i) Ensuring adequate cash availability for taking care of the requirements of pensioners

(ii) Ensuring adequate supply at the military outposts for the cash requirements of the Armed Forces personnel.

Yours faithfully,

(P Vijaya Kumar)
Chief General Manager

Discontinuation of over the Counters Exchange of SBN

RBI/2016-17/155
DCM (Plg) No.1391/10.27.00/2016-17

November 24, 2016

The Chairman / Managing Director/ Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/ Regional Rural
Banks / Urban Cooperative Banks/ State Cooperative Banks

Dear Sir,

Discontinuation of over the Counters Exchange of SBN

Please refer to our circular DCM (Plg) No.1302/10.27.00/2016-17 dated November 17, 2016 on “Withdrawal of Legal Tender Character of existing ₹ 500 and ₹ 1000 Bank Notes – Exchange over the counters”.

2. On a review it has since been decided that no over the counter exchange (in cash) of SBNs will be permitted after midnight of November 24, 2016.Members of public who approach the banks for over the counter exchange of SBN may be encouraged to deposit SBNs into their bank accounts.

3. Banks may ensure to facilitate opening of new accounts for unbanked people.

Yours faithfully,

(P Vijaya Kumar)
Chief General Manager

RBI’s Path towards Liberalisation.

The Reserve Bank of India (RBI) lies at the apex of the banking and financial structure of the country. Recently, it published various notifications that loosened certain restrictions and espoused a smooth-running of its policies. The predominant features are discussed hereunder.

1. FDI norms liberalized for NBFC’S:
During the Budget Speech of 2016, the Esteemed Finance Minister declared the extension of overseas investment beyond the 18 enumerated non-banking financial companies. Under an automatic route, FDI up to 100% is permitted for ‘other financial services’, subject to the condition that they are governed by any financial service regulator, such as the RBI, SEBI, IRDA and so on. The central bank has paved the way for a greater inflow of investment via a string of actions that has liberalised FDI regulations. Additionally, minimum capitalisation regulations as necessitated under the apex bank’s norms have been quashed.

2. Provisions regarding Foreign Venture Capital Investors (FVCI)

The extant regulatory provisions pertaining to investment by a Foreign Venture Capital Investor (FVCI) have been reviewed and revised by way of Circular 7, dated October 20, 2016. Consequently, FVCI’s are empowered and allowed to invest in specific areas, even without obtaining RBI’s assent for the same. With regard to unlisted companies, FVCI’s can invest in equity, equity-related instruments or debt instruments in certain sectors, comprising biotechnology, dairy industry, Research and development of new chemical entities in pharmaceutical sector, infrastructure etc. The circular issued by the RBI stipulated that no restraint on the transfer of any security or instrument held by the FVCI to any person residing in or outside India, will be imposed. Importantly, an FVCI can make investments into a “startup”, regardless of the sector to which it belongs. It specifies that a Venture Capital Fund, which has acquired an inflow of downstream investment from a FVCI must adhere to the regulations prescribed for downstream investment.

3. Sectoral Caps- Updated

Following the myriad alterations and provisions envisaged to conditions exclusive to certain sectors, the central bank has incorporated a system for easing the flow of foreign direct investment. Simply put, sectoral caps are the maximum amount that may be invested by overseas investors in an entity. It now consists of any and every foreign investment, direct and indirect, irrespective of the Schedule under which the investment is made. The chief pronouncements are the inauguration of a composite sectoral cap, foreign exchange management and foreign investment in LLPs.

4. Draft Framework on External Commercial Borrowings

RBI has streamlined regulations and ensured an easy flow of venture funds to startup propositions and has relaxed the norms for external commercial borrowings. It has expanded the list of recognised lenders and prescribed more flexible conditions for long term borrowings made in foreign currency. Striving to simplify the provisions regarding ECB’s, the RBI has announced that banks accept pleas from debtors for the extension of matured but outstanding ECBs, if no extra expense is borne, lender’s approval is permissible and reporting mandates are fulfilled.
The aforementioned revisions have opened the gates to boost the availability of fundraising opportunities for Indian companies from overseas investors and lenders.

Withdrawal of Legal Tender Character of Specified Bank Notes – Compliance with provisions of 114B of the Income Tax Rules, 1962

RBI/2016-17/135
DCM (Plg) No.1287/10.27.00/2016-17

November 16, 2016

The Chairman / Managing Director/Chief Executive Officer
Public Sector Banks / Private Sector Banks/ Foreign Banks
Regional Rural Banks / Urban Co-operative Banks / State Co-operative Banks

Dear Sir,

Withdrawal of Legal Tender Character of Specified Bank Notes – Compliance with provisions of 114B of the Income Tax Rules, 1962

Please refer to our Circular DCM (Plg) No.1226/10.27.00/2016-17 dated November 08, 2016 on the captioned subject. With a view to ensure compliance with provisions of 114B of the Income Tax Rules, 1962, the banks are advised as under:

  1. Anybody depositing more than ₹ 50,000/- in cash in their bank account has to submit a copy of the PAN card in case the bank account is not seeded with PAN
  2. In addition to the above provision, in the same IT Rules, PAN reporting requirements are there for other transactions, which banks need to insist upon.

2. The banks are, therefore, advised to take note of the above and ensure strict compliance with the provisions of 114B of the Income Tax Rules, 1962. Relevant provision 114B of the Income Tax Rules, 1962, is enclosed.

Yours faithfully,

(P Vijaya Kumar)
Chief General Manager
Encl: As above

Section 23 of the Banking Regulation Act, 1949 – Master Circular on Branch Licensing – Census data 2011

RBI/2016-17/134
DBR.RRB.BC.No.36/31.01.002/2016-17

November 16 , 2016

All Regional Rural Banks

Dear Sir / Madam,

Section 23 of the Banking Regulation Act, 1949 – Master Circular on Branch Licensing – Census data 2011

Please refer to our Master circular on Branch Licensing DBR.CO.RRB.BL.BC.No.17/31.01.002/2015-16 dated July 1, 2015. As the Census data for 2011 are available in public domain, Regional Rural Banks are advised to follow Census 2011 for all purposes of categorisations. The details of Tier-wise Population Groups, List of Underbanked Districts in Underbanked States and List of Underbanked Districts in other States based on Census 2011 are enclosed at Annex 1, 2and 3 respectively.

Yours faithfully,

(S.S.Barik)
Chief General Manager-in-Charge

Encl. as above

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes – Daily Reporting

RBI/2016-17/136
DCM (Plg) No.1291/10.27.00/2016-17

November 16, 2016

The Chairman / Managing Director/ Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/ Regional Rural
Banks / Urban Cooperative Banks/ State Cooperative Banks

Dear Sir

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes – Daily Reporting

Please refer to Para (4) of DCM, CO circular DCM (Plg) No.1226/10.27.00/2016-17 dated November 08, 2016 on the captioned subject advising the banks to send daily report to RBI with details of Specified Bank Notes (SBNs). It has been observed that the banks are sending the reports with significant delay causing severe inconvenience in collation and consolidation of data at RBI.

2. The banks are, therefore, advised to send daily data in Annex 6A before 2300 hrs everyday by email to RBI, DCM, CO.

Yours faithfully,

(Suman Ray)
General Manager

Usage of ATMs – Waiver of customer charges

RBI/2016-17/132
DPSS.CO.PD.No.1240/02.10.004/2016-2017

November 14, 2016

The Chairman and Managing Director / Chief Executive Officers
All Scheduled Commercial Banks including RRBs / Urban Co-operative Banks /
State Co-operative Banks / District Central Co-operative Banks
White Label ATM Operators

Dear Madam/ Sir,

Usage of ATMs – Waiver of customer charges

A reference is invited to the circular DPSS.CO.PD.No.316/02.10.002/2014-2015 dated August 14, 2014 on rationalisation of number of mandatory free ATM transactions for savings bank account customers for transactions done at their own bank ATMs as well as at ATMs of other banks. A reference is also drawn to Circular No.DCM (Plg) No.1226/10.27.00/2016-17 dated November 08, 2016 on the withdrawal of legal tender characteristics of existing ₹ 500/- and ₹ 1000/- Bank Notes (Specified Bank Notes – SBN) and Circular RBI/2016-17/111 DPSS.CO.PD.No./02.10.002/2016-2017 dated November 8, 2016 on, inter alia, closure of ATMs and waiver of charges on withdrawals from ATMs till December 30, 2016.

2. In this regard, it has been decided that banks shall waive levy of ATM charges for all transactions (inclusive of both financial and non-financial transactions) by savings bank customers done at their own banks’ ATMs as well as at other banks’ ATMs, irrespective of the number of transactions during the month.

3. This waiver is applicable on transactions done at ATMs from November 10, 2016 till December 30, 2016, subject to review.

4. The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007, (Act 51 of 2007).

Yours faithfully

(Nanda S Dave)
Chief General Manager

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes – Daily Reporting

RBI/2016-17/136
DCM (Plg) No.1291/10.27.00/2016-17

November 16, 2016

The Chairman / Managing Director/ Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/ Regional Rural
Banks / Urban Cooperative Banks/ State Cooperative Banks

Dear Sir

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes – Daily Reporting

Please refer to Para (4) of DCM, CO circular DCM (Plg) No.1226/10.27.00/2016-17 dated November 08, 2016 on the captioned subject advising the banks to send daily report to RBI with details of Specified Bank Notes (SBNs). It has been observed that the banks are sending the reports with significant delay causing severe inconvenience in collation and consolidation of data at RBI.

2. The banks are, therefore, advised to send daily data in Annex 6A before 2300 hrs everyday by email to RBI, DCM, CO.

Yours faithfully,

(Suman Ray)
General Manager

Standard Operating Procedure (SOP) for putting indelible ink on the finger of the customers coming to a bank branch for SBNs

RBI/2016-17/133
DCM (Plg) No.1280/10.27.00/2016-17

November 15, 2016

The Chairman / Managing Director/Chief Executive Officer,
Public Sector Banks / Private Sector Banks/ Foreign Banks
Regional Rural Banks / Urban Co-operative Banks / State Co-operative Banks

Dear Sir

Standard Operating Procedure (SOP) for putting indelible ink on the finger of the customers coming to a bank branch for SBNs

Please refer to our Circular No. DCM (Plg) No.1226/10.27.00/2016-17 dated November 08, 2016 on the captioned subject. Based on feedback received from various quarters, it is felt that there is a need to put in place a Standard Operating Procedure (SOP) for such exchange of Specified Bank Notes (SBNs). Accordingly, ROs are advised to put in place the following measures.

  1. While exchanging the SBNs, the concerned bank branch and post offices would put indelible ink mark on the right index finger of the customer so as to identify that he/she has exchanged the old currency notes only once.
  2. The indelible ink would be supplied to the bank/post offices by IBA in coordination with the banks and consultation with RBI.
  3. This procedure would be introduced to begin with in the metro cities and expanded to other areas later.
  4. Each bank branch will be provided with black indelible ink bottles of 5 ml each. The cap of the bottle includes a small brush for applying the ink.
  5. The indelible ink can be applied by the cashier or any other official designated by the bank before the notes are given to the customer so that while the exchange of notes is taking place, a few seconds elapse which will allow the ink to dry up and prevent removal of ink.
  6. Indelible ink on the index finger of the left hand or any other finger of the left hand may not be used as a pretext to deny exchange of old notes.

Yours faithfully,

(P Vijaya Kumar)
Chief General Manager

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes – Applicability of the Scheme to DCCBs

RBI/2016-17/130
DCM (Plg) No.1273/10.27.00/2016-17

November 14, 2016

The Chairman / Managing Director/Chief Executive Officer,
Public Sector Banks / Private Sector Banks/ Foreign Banks/Regional Rural
Banks / Urban Co-operative Banks / State Co-operative Banks/ District Central
Cooperative Banks

Dear Sir,

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes – Applicability of the Scheme to DCCBs

Please refer to our Circular No. DCM (Plg) No.1226/10.27.00/2016-17 dated November 08, 2016 on the captioned subject. It is clarified that District Central Cooperative Banks can allow their existing customers to withdraw money from their accounts upto ₹ 24,000/- per week upto November 24, 2016. However no exchange facility against the specified bank notes (₹ 500/- and ₹ 1000/-) or deposit of such notes should be entertained by them.

2. All banks are advised to permit withdrawal of cash by DCCBs from their accounts based on need. The cash withdrawal limit of ₹ 24,000/- per week is not applicable to withdrawal of cash by a DCCB from its account with any other bank.

Yours faithfully,

(P Vijaya Kumar)
Chief General Manager

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes –Limit for Withdrawal of Cash

RBI/2016-17/123
DCM (Plg) No.1251/10.27.00/2016-17

November 10, 2016

The Chairman / Managing Director/ Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/
Regional Rural Banks / Urban Cooperative Banks/
State Cooperative Banks

Dear Sir

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes –Limit for Withdrawal of Cash

Please refer to our circular DCM (Plg) No.1226/10.27.00/2016-17 November 08, 2016.

2. In terms of para 3.c (iv) of the said circular, cash withdrawal from a bank account over the counter shall be restricted to ₹ 10,000/- per day subject to an overall limit of ₹ 20,000/- a week from the date of the notification until the end of business hours on 24th November, 2016, after which these limits shall be reviewed. It is clarified that the above limits are not applicable to cash withdrawal from a bank account by

  1. one bank from another bank,
  2. Post Office,
  3. Money changers operating at International airports and
  4. operators of White Label ATMs.

3. The branches maintaining Currency Chests are advised to accommodate the requests from other branches in their vicinity – linked or otherwise – for supply of cash.

4. Deposits of Specified bank Notes into all types of deposit/loan accounts is allowed subject to CTR/STR reporting.

Yours faithfully

(P Vijaya Kumar)
Chief General Manager

Schemes for Stressed Assets – Revisions

RBI/2016-17/122
DBR.No.BP.BC.34/21.04.132/2016-17

November 10, 2016

All Scheduled Commercial Banks
(Excluding RRBs),
All-India Term-lending and Refinancing Institutions
(Exim Bank, NABARD, NHB and SIDBI)
Non-Banking Financial Companies, including
Securitisation Companies/ Reconstruction Companies

Madam / Dear Sir,

Schemes for Stressed Assets – Revisions

In the recent past, the Reserve Bank of India has taken various regulatory measures to strengthen the lenders’ ability to deal with stressed assets viz., Framework for Revitalising Distressed Assets, Flexible Structuring of Project Loans, Strategic Debt Restructuring Scheme, Scheme for Sustainable Structuring of Stressed Assets, etc.

2. The changes in the above guidelines have been carried out with the objectives of:

  1. harmonisation of stand-still clause as applicable in case of Strategic Debt Restructuring Scheme with other guidelines;
  2. clarifying on the deemed date of commencement of commercial operations; and
  3. partial modification of certain guidelines based on the experience gained in using these tools in resolving the stressed assets as well as feedback received from stakeholders, and taking into consideration the requirements of the construction sector.

3. All other provisions of the respective schemes remain unchanged.

Yours faithfully,

(Ajay Kumar Choudhary)
Chief General Manager


Annex

A. Scheme for Sustainable Structuring of Stressed Assets

The asset classification norms for loans under the Scheme for Sustainable Structuring of Stressed Assets, in cases where there is no change of promoters, are prescribed in paragraph 9(B) of circular DBR.No.BP.BC.103/21.04.132/2015-16 dated June 13, 2016. Based on the feedback received from stakeholders and on a review, it has been decided to revise paragraphs 9(B) (i) and (ii) of the scheme as under:

  1. In view of the need to provide reasonable time to the overseeing committee to review the processes involved in the resolution plan, the Asset classification as on the date of lenders’ decision to resolve the account under these guidelines (reference date) will continue for a period of 180 days1 from this date. This standstill clause is permitted to enable JLF/consortium/bank to formulate the resolution plan, submit the same to the overseeing committee formed under the guidelines and implement it. Banks should normally submit the resolution plan to the overseeing committee within 90 days from the reference date. It is expected that the overseeing committee would review the processes involved in preparation of resolution plan, etc. for reasonableness and adherence to the provisions of these guidelines, and convey its final opinion on it within a period of 45 days. Subsequently, banks shall implement the resolution plan within the next 45 days. However, banks will have flexibility on the above time lines, within the overall period of 180 days. If the resolution plan is not implemented within this period, the asset classification will be as per the extant asset classification norms, assuming there was no such ‘stand-still’. It is clarified that ‘stand-still’ clause only applies to asset classification and banks shall not recognize income on accrual basis if the interest is not serviced within 90 days from the due date;
  2. In respect of an account that is ‘Standard’ as on the reference date, the entire outstanding (both Part A and part B) may be treated as ‘Standard’ subject to provisions made upfront by the lenders being at least the higher of 40 percent of the amount held in part B or 20 percent of the aggregate outstanding (sum of Part A and part B). For this purpose, the provisions already held in the account can be reckoned. These provisions may be reversed one year after the date of implementing the resolution plan or one year after completion of the longest pre-existing moratorium, whichever is later, subject to satisfactory performance of Part A and Part B during this period.

2. All other guidelines of the scheme, which are specifically not modified here, remain unchanged.

B. Flexible Structuring of Existing Long Term Project Loans to Infrastructure and Core Industries

3. In terms of circular DBOD.No.BP.BC.24/21.04.132/2014-15 dated July 15, 2014, Reserve Bank prescribed guidelines on Flexible Structuring of Long Term Project Loans to Infrastructure and Core Industries. Subsequently, in terms of circular DBR.No.BP.BC.53/21.04.132/2014-15 dated December 15, 2014 banks were allowed to flexibly structure existing long term project loans to infrastructure and core industries.

4. Based on the experience gained by banks on flexibly structuring long term project loans to specified sectors and based on the principle that repayment schedules of loans should normally correspond to the cash flows from the underlying assets created out of such loans, it has now been decided that banks may apply flexible structuring to:

  1. New project loans in all sectors; and
  2. Existing project loans, in which the aggregate exposure of all institutional lenders exceeds ₹ 250 crore, in all sectors;

subject to all other terms and conditions stipulated in the respective guidelines.

5. In addition, banks shall put in place a detailed policy on flexible structuring of loans to various sectors containing the norms on determining useful economic life, the tenor of loans based on economic life of the assets, management of refinance and asset liability management risk, etc.

6. Banks may also apply flexible structuring of funded exposures to construction companies, identifiable against the specific projects being executed by such companies, which may include funded exposure due to invocation/devolvement of guarantees by project developers. The revised amortisation schedule of such funded exposure shall be restricted upto the date of commencement of commercial operation of the underlying projects. Where flexible structuring is applied to such existing exposures, the aggregate exposure of all institutional lenders shall exceed ₹ 250 crore as at paragraph 4 (b) above.

7. Further, banks shall make the annual disclosures in their financial statements on application of flexible structuring to existing loans as per the format given at Appendix. All other guidelines of the scheme, which are specifically not modified here, remain unchanged.

C. Strategic Debt Restructuring Scheme

8. It has been decided to modify paragraph xiv) (b) of circular DBR.BP.BC.No.101/21.04.132/2014-15 dated June 8, 2015, and paragraph 7 of circular DBR.BP.BC.No.82/21.04.132/2015-16 dated February 25, 2016 as under:

“The new promoter should have acquired at least 26 per cent of the paid up equity capital of the borrower company and shall be the single largest shareholder of the borrower company. Further, the new promoter shall be in ‘control’ of the borrower company as per the definition of ‘control’ provided in the Companies Act 2013/regulations issued by the Securities and Exchange Board of India/any other applicable regulations/accounting standards as the case may be.”

9. It is clarified that ‘stand-still’ clause only applies to asset classification and banks shall not recognise income on accrual basis if the interest is not serviced within 90 days from the due date.

10. Banks shall make disclosures on invocation of SDR in annual financial statements as per the format given at Appendix.

11. All other guidelines of the SDR scheme shall remain unchanged.

D. Prudential Norms on Change in Ownership of Borrowing Entities (Outside Strategic Debt Restructuring Scheme)

12. Prudential norms on change in ownership of borrowing entities (outside Strategic Debt Restructuring Scheme) have been issued vide circular DBR.BP.BC.No.41/21.04.048/2015-16 dated September 24, 2015. Based on the feedback received from the stakeholders, it has now been decided to review the prudential norms on change in ownership of borrowing entities (Outside Strategic Debt Restructuring Scheme) and introduce stand-still clause on asset classification and provisioning requirements in this scheme on the lines of the Strategic Debt Restructuring Scheme. The revision is as under:

i) The decision on invoking the change in ownership by any of the methods indicated above should be well documented and approved by the majority of the JLF members (minimum of 75% of creditors by value and 50% of creditors by number). The date on which banks resolve to effect a change in ownership will be called as ‘reference date’;

ii) Where banks decide to change ownership through conversion of debt into equity/invocation of pledge of shares, the existing asset classification of the account as on the ‘reference date’ will continue for a period of 18 months from the ‘reference date’ to enable banks to complete the process of change in ownership. However, where applicable, banks shall approve the debt to equity conversion package within 90 days from the ‘reference date’. The conversion of debt into equity as approved by the banks shall be completed within a period of 90 days from the date of approval of the conversion package by the consortium/JLF. In case of invocation of pledge of equity shares, the same shall be completed within 180 days from the ‘reference date’. If the targeted conversion of debt into equity shares/transfer of pledged equity shares does not take place within 180 days from the ‘reference date’, the stand-still benefit will cease to exist. The loans will then be classified as per the extant Income Recognition, Asset Classification and Provisioning norms, as if no stand still on asset classification was provided.

iii) Where change in ownership is effected by issue of new shares by the borrower company or sale of shares by the existing promoter of the company to an acquirer, the asset classification as on the date of binding agreement2 between the borrower company/existing promoter and the new promoter shall continue for a period of 12 months to enable issue of new shares/transfer of shares from existing promoter to new promoter.

iv) Upon expiry of stand-still (18 or 12 months, as the case may be) if the ownership has not been transferred in favour of new promoters, the asset classification will be as per the extant asset classification norms, assuming the aforesaid ‘stand-still’ in asset classification had not been given. It is clarified that ‘stand-still’ clause only applies to asset classification and banks shall not recognise income on accrual basis if the interest is not serviced within 90 days from the due date.

a) All other instructions as applicable to SDR will also apply to cases where banks decide to change ownership of borrowing entities (outside Strategic Debt Restructuring Scheme).

b) Banks shall be circumspect and shall consider change in ownership (including under SDR) only in cases where change in ownership is likely to improve the economic value of the asset and the prospects of recovery of their dues.

13. Banks shall make disclosures on accounts where change in ownership is being effected outside SDR scheme as per the format given at Appendix.

14. All other guidelines of the outside SDR scheme shall remain unchanged.

E. Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances – Projects Under Implementation – Change in Ownership

15. With respect to project under implementation where a change in ownership is effected, in partial modification of paragraph No. 5(vi) of DBR.No.BP.BC.84/21.04.048/2014-15 dated April 6, 2015, it has been decided that asset classification of the account as on the ‘reference date’ would continue during the extended period as prescribed in the said circular. For this purpose, the ‘reference date’ would be the date of execution of binding agreement between the parties to the transaction, provided that the acquisition/takeover of ownership as per the provisions of law/regulations governing such acquisition/takeover is completed within a period of 12 months days from the date of execution of such binding agreement. Further in line with other guidelines on change in ownership, there will be ‘stand-still’ in asset classification status during the above 12 month period. If the change in ownership is not completed within 12 months from the date of the binding agreement, the asset classification will be as per the extant asset classification norms, assuming the aforesaid ‘stand-still’ in asset classification had not been given.

F. Loans to Projects under Implementation – Date of Commencement of Commercial Operations (DCCO)

16. In terms of extant guidelines contained in paragraph 4.2.15 of “Master Circular – Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances” dated July 1, 2015, for all projects financed by the FIs/ banks, the ‘Date of Completion’ and the ‘Date of Commencement of Commercial Operations’ (DCCO), of the project should be clearly spelt out at the time of financial closure of the project and the same should be formally documented. These guidelines also permit deferment of DCCO and consequential shift in repayment schedule for equal or shorter duration (including the start date and end date of revised repayment schedule) without downgrading the asset classification subject to certain conditions.

17. For the purpose of guidelines on project under implementation contained in paragraph 4.2.15 of “Master Circular – Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances” dated July 1, 2015, in line with the ‘Guidance Note on Treatment of Expenditure during Construction Period’ issued by the Institute of Chartered Accountants of India, read with Accounting Standard 16, a project with multiple independent units may be deemed to have commenced commercial operations from the date when the independent units representing 50 per cent (or higher) of the originally envisaged capacity have commenced commercial operations the final output as originally envisaged, subject to the following conditions:

  1. The units representing remaining 50 per cent (or lower) of the originally envisaged capacity shall commence commercial operations within a maximum period of one year deemed date of commencement of commercial operations;
  2. Commercial viability of the project is reassessed beyond doubt; and
  3. Capitalisation of interest obligation in respect of project debt component attributable to the units of the plant which have commenced commercial operations has to cease and the revenue expenditure is booked under revenue account.

18. In such cases, banks may, at their discretion, also effect a consequential shift in repayment schedule of the debt attributable to units which have not commenced commercial operations for equal or shorter duration (including the start date and end date of revised repayment schedule) i.e., one year, subject to adhering to other applicable guidelines.

19. However, if the remaining units do not commence commercial operations within the stipulated time, the account will attract asset classification norms applicable to projects under implementation and accordingly treated as non-performing asset upon expiry of the one year period indicated at 11(a) above.

20. Further, guidelines relating to project loans which are applicable after DCCO of a project, including flexible structuring of project loans (as per circulars DBOD.No.BP.BC.24/21.04.132/2014-15 dated July 15, 2014 and DBR.No.BP.BC.53/21.04.132/2014-15 dated December 15, 2014), shall not be applicable to project loans attributable to units which have not commenced commercial operations.


Appendix

1. Disclosures on Flexible Structuring of Existing Loans

(Amount in INR Crore)
Period No. of borrowers taken up for flexibly structuring Amount of loans taken up for flexible structuring Exposure weighted average duration of loans taken up for flexible structuring
Classified as Standard Classified as NPA Before applying flexible structuring After applying flexible structuring
Previous Financial Year
Current Financial Year (From April to ….)

2. Disclosures on Strategic Debt Restructuring Scheme (accounts which are currently under the stand-still period)

(Amount in INR Crore)
No. of accounts where SDR has been invoked Amount outstanding as on the reporting date Amount outstanding as on the reporting date with respect to accounts where conversion of debt to equity is pending Amount outstanding as on the reporting date with respect to accounts where conversion of debt to equity has taken place
Classified as standard Classified as NPA Classified as standard Classified as NPA Classified as standard Classified as NPA

3. Disclosures on Change in Ownership outside SDR Scheme (accounts which are currently under the stand-still period)

(Amount in INR Crore)
No. of accounts where banks have decided to effect change in ownership Amount outstanding as on the reporting date Amount outstanding as on the reporting date with respect to accounts where conversion of debt to equity/invocation of pledge of equity shares is pending Amount outstanding as on the reporting date with respect to accounts where conversion of debt to equity/invocation of pledge of equity shares has taken place Amount outstanding as on the reporting date with respect to accounts where change in ownership is envisaged by issuance of fresh shares or sale of promoters equity
Classified as standard Classified as NPA Classified as standard Classified as NPA Classified as standard Classified as NPA Classified as standard Classified as NPA

4. Disclosures on Change in Ownership of Projects Under Implementation (accounts which are currently under the stand-still period)

(Amount in INR Crore)
No. of project loan accounts where banks have decided to effect change in ownership Amount outstanding as on the reporting date
Classified as standard Classified as standard restructured Classified as NPA

1 At present, the stand still period is at 90 days.

2 The new promoter should acquire at least 26 per cent of the paid up equity capital of the borrower company and shall be the single largest shareholder of the borrower company. Further, the new promoter shall be in ‘control’ of the borrower company as per the definition of ‘control’ provided in the Companies Act 2013/regulations issued by the Securities and Exchange Board of India/any other applicable regulations/accounting standards as the case may be.

Payment Systems (RTGS, NEFT, Cheque Clearing, Repo, CBLO and Call markets) to remain open on Saturday, November 12 and Sunday, November 13, 2016

RBI/2016-17/116
DPSS (CO) RTGS No.1212/04.04.002/2016-17

November 10, 2016

The Chairman / Managing Director and Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/
Small Finance Banks / Regional Rural Banks / Local Area Banks
All Cooperative Banks

Dear Sir,

Payment Systems (RTGS, NEFT, Cheque Clearing, Repo, CBLO and Call markets) to remain open on Saturday, November 12 and Sunday, November 13, 2016

Consequent to the banks being open for public transactions on Saturday, November 12 and Sunday, November 13, 2016, it has been decided that Payment Systems (RTGS, NEFT, Cheque Clearing, Repo, CBLO and Call markets) shall remain open on Saturday, November 12 and Sunday, November 13, 2016.

All participants/member banks are advised to facilitate operations on the above payment systems for their customers on November 12 and 13, 2016 as on regular working days. Banks may give due publicity about availability of above payment system services on these days.

Yours faithfully,

(Nanda S. Dave)
Chief General Manager

Withdrawal of the legal tender character of the existing and any older series banknotes in the denominations of ₹ 500 and ₹ 1000

RBI/2016-17/113
A.P. (DIR Series) Circular No. 16

November 09, 2016

To

All Authorised Persons

Madam / Sir,

Withdrawal of the legal tender character of the existing and any older series banknotes in the denominations of ₹ 500 and ₹ 1000

1. Attention of Authorised Persons is invited to the Government of India Notification published in the Gazette of India vide S.O.3408(E) dated November 08, 2016, according to which the legal tender character of the existing and any older series banknotes in the denominations of ₹ 500 and ₹ 1000 stands withdrawn with effect from the midnight of November 8, 2016.

2. However, in terms of Paras 1 (g) and (h) of the Notification, the specified bank notes shall continue to be legal tender until November 11, 2016 interalia to the extent of transactions specified below:
(i) at international airports, for arriving and departing passengers, who possess specified bank notes, the value of which does not exceed five thousand rupees to exchange them for notes which are legal tender; and
(ii) for foreign tourists to exchange foreign currency or specified bank notes, the value of which does not exceed five thousand rupees, to exchange them for notes which are legal tender.

3. Authorised Persons may follow the above instructions and bring the contents of this circular to the notice of their constituents.

4. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law

Yours faithfully,
(Shekhar Bhatnagar)
Chief General Manager-In-Charge

Banks to remain open for public on Saturday, November 12 and Sunday, November 13, 2016

RBI/2016-17/114

DBR.No.Leg.BC.31/09.07.005/2016-17

November 9, 2016

The Chairman / Managing Director and Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/ Small Finance Banks /
Regional Rural Banks / Local Area Banks
All Cooperative Banks

Dear Sir/ Madam,

Banks to remain open for public on Saturday, November 12 and Sunday, November 13, 2016

In order to meet the anticipated heavy demand from members of public to conduct their banking transactions, it has been decided that banks shall remain open for public transactions on Saturday, November 12 and Sunday, November 13, 2016. Banks are advised to keep all their branches open on November 12 and 13, 2016 as regular working days for transacting all business. Banks may give due publicity about availability of banking services on these days. Yours faithfully, (Rajinder Kumar) Chief General Manager

In order to meet the anticipated heavy demand from members of public to conduct their banking transactions, it has been decided that banks shall remain open for public transactions on Saturday, November 12 and Sunday, November 13, 2016. Banks are advised to keep all their branches open on November 12 and 13, 2016 as regular working days for transacting all business. Banks may give due publicity about availability of banking services on these days.

Yours faithfully,

(Rajinder Kumar)
Chief General Manager

FAQs on Withdrawal of Legal Tender Character of the Old High Denomination Bank Notes

1. Why is this scheme?

The incidence of fake Indian currency notes in higher denomination has increased. For ordinary persons, the fake notes look similar to genuine notes, even though no security feature has been copied. The fake notes are used for antinational and illegal activities. High denomination notes have been misused by terrorists and for hoarding black money. India remains a cash based economy hence the circulation of Fake Indian Currency Notes continues to be a menace. In order to contain the rising incidence of fake notes and black money, the scheme to withdraw has been introduced.

2. What is this scheme?

The legal tender character of the notes in denominations of ₹ 500 and ₹ 1000 stands withdrawn. In consequence thereof withdrawn old high denomination (OHD) notes cannot be used for transacting business and/or store of value for future usage. The OHD notes can be exchanged for value at any of the 19 offices of the Reserve Bank of India or at any of the bank branches or at any Head Post Office or Sub-Post Office.

3. How much value will I get?

You will get value for the entire volume of notes tendered at the bank branches / RBI offices.

4. Can I get all in cash?

No. You will get upto ₹4000 per person in cash irrespective of the size of tender and anything over and above that will be receivable by way of credit to bank account.

5. Why I cannot get the entire amount in cash when I have surrendered everything in cash?

The Scheme of withdrawal of old high denomination(OHD) notes does not provide for it, given its objectives.

6. ₹4000 cash is insufficient for my need. What to do?

You can use balances in bank accounts to pay for other requirements by cheque or through electronic means of payments such as Internet banking, mobile wallets, IMPS, credit/debit cards etc.

7. What if I don’t have any bank account?

You can always open a bank account by approaching a bank branch with necessary documents required for fulfilling the KYC requirements.

8. What if, if I have only JDY account?

A JDY account holder can avail the exchange facility subject to the caps and other laid down limits in accord with norms and procedures.

9. Where can I go to exchange the notes?

The exchange facility is available at all Issue Offices of RBI and branches of commercial banks/RRBS/UCBs/State Co-op banks or at any Head Post Office or Sub-Post Office.

10. Need I go to my bank branch only?

For exchange upto 4000 in cash you may go to any bank branch with valid identity proof. For exchange over 4000, which will be accorded through credit to Bank account only, you may go to the branch where you have an account or to any other branch of the same bank. In case you want to go to a branch of any other bank where you are not maintaining an account, you will have to furnish valid identity proof and bank account details required for electronic fund transfer to your account.

11. Can I go to any branch of my bank?

Yes you can go to any branch of your bank.

12. Can I go to any branch of any other bank?

Yes, you can go to any branch of any other bank. In that case you have to furnish valid identity proof for exchange in cash; both valid identity proof and bank account details will be required for electronic fund transfer in case the amount to be exchanged exceeds ₹4000.

13. I have no account but my relative / friend has an account, can I get my notes exchanged into that account?

Yes, you can do that if the account holder relative/friend etc gives you permission in writing. While exchanging, you should provide to the bank, evidence of permission given by the account holder and your valid identity proof.

14. Should I go to bank personally or can I send the notes through my representative?

Personal visit to the branch is preferable. In case it is not possible for you to visit the branch you may send your representative with an express mandate i.e. a written authorisation. The representative should produce authority letter and his / her valid identity proof while tendering the notes.

15. Can I withdraw from ATM?

It may take a while for the banks to recalibrate their ATMs. Once the ATMs are functional, you can withdraw from ATMs upto a maximum of ₹2,000/- per card per day upto 18th November, 2016. The limit will be raised to ₹4000/- per day per card from 19th November 2016 onwards.

16. Can I withdraw cash against cheque?

Yes, you can withdraw cash against withdrawal slip or cheque subject to ceiling of ₹10,000/- in a day within an overall limit of ₹20,000/- in a week (including withdrawals from ATMs) for the first fortnight i.e. upto 24th November 2016.

17. Can I deposit withdrawn notes through ATMs, Cash Deposit Machine or cash Recycler?

Yes, OHD notes can be deposited in Cash Deposits machines / Cash Recyclers.

18. Can I make use of electronic (NEFT/RTGS /IMPS/ Internet Banking / Mobile banking etc.) mode?

You can use NEFT/RTGS/IMPS/Internet Banking/Mobile Banking or any other electronic/ non-cash mode of payment.

19. How much time do I have to exchange the notes?

The scheme closes on 30th December 2016. The OHD banknotes can be exchanged at branches of commercial banks, Regional Rural Banks, Urban Cooperative banks, State Cooperative Banks and RBI till 30th December 2016. For those who are unable to exchange their Old High Denomination Banknotes on or before December 30, 2016, an opportunity will be given to them to do so at specified offices of the RBI, along with necessary documentation as may be specified by the Reserve Bank of India.

20. I am right now not in India, what should I do?

If you have OHD banknotes in India, you may authorise in writing enabling another person in India to deposit the notes into your bank account. The person so authorised has to come to the bank branch with the OHD banknotes, the authority letter given by you and a valid identity proof (Valid Identity proof is any of the following: Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, Identity Card Issued by Government Department, Public Sector Unit to its Staff)

21. I am an NRI and hold NRO account, can the exchange value be deposited in my account?

Yes, you can deposit the OHD banknotes to your NRO account.

22. I am a foreign tourist, I have these notes. What should I do?

You can purchase foreign exchange equivalent to ₹5000 using these OHD notes at airport exchange counters within 72 hours after the notification, provided you present proof of purchasing the OHD notes.

23. I have emergency needs of cash (hospitalisation, travel, life saving medicines) then what I should do?

You can use the OHD notes for paying for your hospitalisation charges at government hospitals, for purchasing bus tickets at government bus stands for travel by state government or state PSU buses, train tickets at railway stations, and air tickets at airports, within 72 hours after the notification.

24. What is proof of identity?

Valid Identity proof is any of the following: Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, Identity Card Issued by Government Department, Public Sector Unit to its Staff.

25. Where can I get more information on this scheme?

Further information is available at our website (www.rbi.org.in) and GoI website (www.rbi.org.in)

26. If I have a problem, whom should I approach?

You may approach the control room of RBI by email or on Telephone Nos 022 22602201/022 22602944

 

Demonetization of currency

MINISTRY OF FINANCE

(Department of Economic Affairs)

NOTIFICATION

New Delhi, the 8th November, 2016

S.O. 3408(E).—Whereas, by the notification of the Government of India in the Ministry of Finance, vide F. No. 10/3/2016-Cy.I dated 8th November, 2016 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated the 8th November, 2016, the Central Government declared that the bank notes of existing series of denomination of the value of five hundred rupees and one thousand rupees (hereinafter referred to as the specified bank notes), shall cease to be legal tender on and from the 9th November, 2016;

And whereas, it has become necessary to notify certain exemptions for the convenience of the members of public in carrying out certain emergent and urgent transactions using the specified bank notes;

Now, therefore, in exercise of the powers conferred by sub-section (2) of section 26 of the Reserve Bank of India Act, 1934 (2 of 1934), the Central Government hereby declares that the specified bank notes shall not be ceased to be legal tender, with effect from the 9th November, 2016 until the 11th November, 2016, to the extent of transactions specified below, namely:—

(a) for making payments in Government hospitals for medical treatment and pharmacies in Government hospitals for buying medicines with doctor’s prescription;

(b) at railway ticketing counters, ticket counters of Government or Public Sector Undertakings buses and airline ticketing counters at airports for purchase of tickets; (c) for purchases at consumer cooperative stores operated under authorisation of Central or State Governments; (d) for purchase at milk booths operating under authorisation of the Central or State Governments; (e) for purchase of petrol, diesel and gas at the stations operating under the authorisation of Public Sector Oil Marketing Companies; (f) for payments at crematoria and burial grounds;

(c) for purchases at consumer cooperative stores operated under authorisation of Central or State Governments; (d) for purchase at milk booths operating under authorisation of the Central or State Governments; (e) for purchase of petrol, diesel and gas at the stations operating under the authorisation of Public Sector Oil Marketing Companies; (f) for payments at crematoria and burial grounds;

(d) for purchase at milk booths operating under authorisation of the Central or State Governments; (e) for purchase of petrol, diesel and gas at the stations operating under the authorisation of Public Sector Oil Marketing Companies; (f) for payments at crematoria and burial grounds;

(e) for purchase of petrol, diesel and gas at the stations operating under the authorisation of Public Sector Oil Marketing Companies; (f) for payments at crematoria and burial grounds;

(f) for payments at crematoria and burial grounds;

(g) at international airports, for arriving and departing passengers, who possess specified bank notes, the value of which does not exceed five thousand rupees to exchange them for notes having legal tender character;

(h) for foreign tourists to exchange foreign currency or specified bank notes, the value of which does not exceed five thousand rupees to exchange them for notes having legal tender character.

2. All establishments referred to in paragraph 1, shall maintain complete account of record of stock and sale of transactions made with the specified bank notes during the period between 9th November, 2016 and 11th November, 2016.

[F. No. 10/03/2016-Cy. I]
Dr. SAURABH GARG, Jt. Secy.

Issue of Rupee Denominated Bonds overseas

RBI/2016-17/108
DBR.BP.BC.No.28 /21.06.001/2016-17

November 03, 2016

All Scheduled Commercial Banks
(Excluding Regional Rural Banks)

Dear Sir,

Issue of Rupee Denominated Bonds overseas

Please refer to A.P. (DIR Series) Circular No.14 dated November 03, 2016 on issue of rupee denominated bonds overseas by Indian banks.

2. We advise that banks are permitted to raise funds through issuance of rupee denominated bonds overseas for the following purposes:

3. The issuances as above shall be subject to all applicable prudential norms and FEMA guidelines.

Yours faithfully

(Ajay Kumar Choudhary)
Chief General Manager

Rupee Drawing Arrangement – Trade related remittance limit

RBI/2016-17/91
A.P. (DIR Series) Circular No. 9

October 20, 2016

To
All Category – I Authorised Dealer Banks

Madam/Sir,

Rupee Drawing Arrangement – Trade related remittance limit

Attention of Authorised Dealer Category – I (AD Category – I) banks is invited to A.P. (DIR Series) Circular No.102 dated May 21, 2015 permitting them to regularize payments exceeding the prescribed limit under RDA provided that they are satisfied with the bonafide of the transaction

2. On a review and in consultation with Government of India, it has been decided that the permitted trade transaction, under the Rupee Drawing Arrangements (RDAs) shall not exceed fifteen lakh rupees per transaction. All other instructions issued vide A.P. (DIR Series) Circular No. 28 [A. P. (FL/RL Series) Circular No. 02] dated February 6, 2008 will remain unchanged.

3. The Reserve Bank has since amended the subject Regulations accordingly through Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016 which have been notified through notification no. FEMA 14(R)/2016-RB dated May 02, 2016 vide G.S.R No. 480(E) dated May 3, 2016. Master Direction No.2 dated January 1, 2016 is being updated, to reflect the changes. The other instructions issued vide the above mentioned circulars shall remain unchanged.

4. AD Category – I banks may bring the contents of this circular to the notice of their constituents concerned.

5. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(Shekhar Bhatnagar)
Chief General Manager-in-Charge