FAQ on ‘Framework for Compromise Settlements and Technical Write-offs’
2. The provision enabling banks to enter into compromise settlement in respect of borrowers categorised as fraud or wilful defaulter is not a new regulatory instruction and has been the settled regulatory stance for more than 15 years.
RBI Clarifications on allegations of missing of banknotes printed by banknote printing presses
All banknotes supplied from printing presses to RBI are properly accounted for. There are robust systems in place for reconciliation of banknotes printed at the presses and supplied to RBI which include protocols to monitor production, storage and distribution of banknotes.
RBI allows additional time to UCBs to achieve PSL
In case contribution has been made by any UCB towards the above PSL shortfall during the FY 2020-21 and/ or FY 2021-22, that contribution can be used to offset any shortfall that may have occurred during FY 2022-23. Excess deposit, if any, after offsetting the PSL shortfall during FY 2022-23 will be refunded.
RBI Statement on Developmental and Regulatory Policies
RBI on June 08, 2023 has issued Statement on Developmental and Regulatory Policies relating to (i) Financial Markets; (ii) Regulation; and (iii) Payment Systems.
RBI Guidelines on Default Loss Guarantee (DLG) in Digital Lending
Arrangements between Regulated Entities (REs) and Lending Service Providers (LSPs) or between two REs involving default loss guarantee (DLG), commonly known as FLDG, has been examined by the Bank and it has been decided to permit such arrangements.
Framework for Compromise Settlements and Technical Write-offs
The Prudential Framework for Resolution of Stressed Assets dated June 7, 2019 provides a broad principle-based framework. With a view to provide further impetus to the same, as well as to harmonize the instructions across all regulated entities, Statement on Developmental and Regulatory Policies dated June 08, 2023 has proposed to Issue a comprehensive regulatory framework governing compromise settlements and technical write-offs covering all regulated entities.
RBI revises Scope of Trade Receivables Discounting System
Insurance facility will now be permitted on TReDS. This will encourage financing / discounting of payables of buyers irrespective of their credit ratings. Accordingly, insurance companies will be permitted to participate as a “fourth participant” on TReDS, apart from the MSME sellers, buyers and financiers.
All entities / institutions eligible to undertake factoring business under the Factoring Regulation Act will be permitted to participate as financiers in TReDS.
Secondary market operations will now be enabled on TReDS platforms. This would allow financiers to offload their existing portfolio to other financiers within the same TReDS platform, if required.
RBI updates Alert List of unauthorized forex trading platforms
RBI has updated the Alert List of unauthorized forex trading platforms. The Alert List contains names of entities which are neither authorized to deal in forex under the Foreign Exchange Management Act, 1999 (FEMA) nor authorized to operate electronic trading platform (ETP) for forex transactions under the Electronic Trading Platforms (Reserve Bank) Directions, 2018.
RBI has amended Master Direction – Risk Management and Inter-Bank Dealings to revise compliances governing Non-deliverable derivative contracts (NDDCs)
The newly inserted direction allows banks with an Authorized Dealer Category-I license and operating IBUs to offer NDDCs involving INR to resident non-retail users from their branches in India. This provision is subject to compliance with the guidelines specified in the revised direction mentioned earlier. The transactions in this case must be cash-settled in INR.
RBI draft Master Directions on Cyber Resilience and Digital Payment Security Controls for Payment System Operators
The draft Directions cover governance mechanism for identification, assessment, monitoring and management of cybersecurity risks including information security risks and vulnerabilities, and specify baseline security measures for ensuring safe and secure digital payment transactions.
