PWC'S BANKING INSIGHTS JUNE 2018
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PwC’s Banking Insights
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June 2018
Impact assessment of
Preface regulatory changes in
June 2018
3 4
Other notifications
Contacts
in June 2018
33 39
Preface
Preface
Earlier this month, the Indian currency pulled out nearly 48,000 crore INR in the be symptomatic of the weakness in the
hit an all-time low of 69.10 against the first half of 2018, following high crude underlying risk management framework,
dollar. The continued strengthening of oil prices and trade war worries. The internal controls, internal audits and
Impact the US dollar coupled with poor foreign FPI expectation is that the rupee may governance mechanism. The data released
assessment of investment inflows and concerns over depreciate even further if the US Federal by the RBI as part of the FSR indicates a
regulatory changes rising oil prices has been instrumental Reserve continues to hike rates. The substantial increase in the frauds being
in June 2018 in keeping the rupee under tremendous increasing interest rates in the US do not reported, as seen below.
pressure. While a major basket of augur well for the Indian economy and
currencies of economies like the thus leads foreign investors to shift their Frauds reported (amount involved >= 1 lakh INR
Philippines, Indonesia, South Korea, focus to developed economies like the US.
Other notifications Taiwan and Singapore has witnessed a Further, with the challenges the Indian 8000 400
in June 2018 fall, the Indian rupee has emerged as the economy is facing, FPIs have chosen to 6000 300
4000 200
worst performer. Year-to-date outflow shift focus outside India.
2000 100
from the Indian bond market has also seen
While economists may have predicted 0 0
a steep rise, while other countries such
a further fall in rupee to 70 against the 2013-14 2014-15 2015-16 2016-17 2017-18
as China, South Korea, Thailand and the
dollar, this is, however, unlikely as the No. of frauds
Contacts Philippines have received net inflows to
Reserve Bank of India (RBI) will certainly
their debt market thus far.
not be comfortable with that expensive a
A reason for the same may be the RBI’s rupee. The RBI has stated time and again
fixation with inflation that has made it that while it does not target any level of
rather slow in reacting to changing global the domestic currency, it does intervene in
events, resulting in the underperformance the forex market to check the volatility of
of the currency and outflows from the the currency.
debt market.
Further, the recent instances of frauds
The hike in the repo rate early last month hitting the banking sector have also
also caused the rupee to depreciate forced the RBI to assess the operational
further. Further, the current scenario of risk framework for banks. Operational
foreign portfolio investor (FPI) outflows is risks in banks have implications across
also responsible for the weakening of the the entire spectrum of risks and hence,
rupee. Overseas investors have already materialisation of operational risk may
3 PwC PwC’s Banking Insights
Preface
Preface
Impact
assessment of
regulatory changes
in June 2018
Other notifications
in June 2018
Contacts
Further, the banking stability indicator costs and declining revenues. Profitability marginal standing facility (MSF), monthly
also showed that deteriorating of weak banks on an average has been reporting through external commercial
profitability as well as asset quality worsening since the last two fiscal years borrowing (ECB) 2 Return, interest rate
pose elevated risks to the banking and more efforts will be needed to options in India, spreading of market-
sector stability. Weak profitability of improve their resilience. to-market (MTM) losses, and creation
scheduled commercial banks (SCBs) is of investment fluctuation reserve, a
This issue covers an impact analysis of key
also a concern as low profits can prevent liberalised remittance scheme and control
regulations issued in the month of June
banks from building cushions against measures for ATMs in India. This issue
2018, including the regulations around
unexpected losses and make them also covers a special article on RBI’s draft
encouraging formalisation of micro, small
vulnerable to adverse shocks. There are guidelines on the loan system for delivery
and medium enterprises (MSME) sector,
several structural issues resulting in low of bank credit.
review of margin requirements under
profitability of SCBs, including high loan
liquidity adjustment facility (LAF) and
loss provisions, debt overhang, increasing
4 PwC PwC’s Banking Insights
Impact assessment of regulatory changes in June 2018
Preface
Encouraging formalisation of MSME sector1
Impact Circular reference: Background:
assessment of RBI/2017-18/186 DBR.No.BP. The implementation of the Good and Services Tax (GST), created ripples in
regulatory changes
BC.108/21.04.048/2017-18 the micro, small and medium enterprises (MSME) sector, affecting liquidity
in June 2018 Dated 6 June 2018 of the entities. The quality of the loans extended by banks and non-banking
financial companies (NBFCs) to these MSME borrowers also deteriorated,
Applicability: thereby creating pressure to qualify assets as non-performing due to overdues
in payments. However, in line with the government’s intention to support
Other notifications All banks and NBFCs regulated by the Reserve MSMEs, the RBI has rolled out some relief in the non-performing asset (NPA)
in June 2018 Bank of India classification for MSME borrowers. For the purpose of smooth transition and
ease of formalisation, the MSMEs registered under GST will be aligned with the
current asset classification norms in a phased manner.
Extract from the regulation: 2. The borrower’s account was standard phased manner, as given in the Annex.
Contacts as on August 31, 2017. However, for MSMEs that are not
Having regard to the input credit linkages registered under GST as on December
and ancillary affiliations, it has now been 3. The payments due from the borrower
as on September 1, 2017 and falling 31, 2018, the asset classification in
decided to temporarily allow banks and respect of dues payable from January
NBFCs to classify their exposure, as per due thereafter up to December 31,
2018 were/are paid not later than 180 1, 2019 onwards shall immediately
the 180 days past due criterion, to all revert to the extant IRAC norms.
MSMEs, including those not registered days from their original due date.
under GST, as a ‘standard’ asset, subject to 4. In respect of dues payable by GST- 5. The other terms and conditions of
the following conditions: registered MSMEs from January 1, the circular dated February 07, 2018
2019 onwards, the 180 days past remain unchanged.
1. The aggregate exposure, including due criterion shall be aligned to the
non-fund based facilities, of banks and extant income recognition and asset
NBFCs to the borrower does not exceed classification (IRAC) norms in a
250 million as on May 31, 2018.
1. https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11289
5 PwC PwC’s Banking Insights
Annex
Period during which any payment falls due Time permitted
Preface
1 September 2017 to 31 December 2018 180 days
1 January 2019 to 28 February 2019 150 days
1 March 2019 to 30 April 2019 120 days
Impact 1 May 2019 onwards 90 days
assessment of
regulatory changes
in June 2018 Impact assessment:
• Consequent to the regulation, banks and NBFCs are not allowed to
classify their exposure, as per the 180-day criterion, to all MSMEs
with credit facilities within the limit and including those that are not
Other notifications
registered under GST. The alignment to the Income Recognition and
in June 2018
Asset classification shall happen in a phased manner:
• For MSME accounts classified as standard as on 31 August 2017 and
having payments due between 1 September 2017 and 31 December
2018, the asset would be classified as an NPA after 180 days.
Contacts • All the MSMEs registered under GST will be aligned to the IRAC
norms in a phased manner from 1 January 2019. This allows
the MSMEs to reap the benefits of the formalisation and ease in
transition under GST.
• This has a positive impact on the banks as they are not overburdened
with NPAs and can gradually classify and strengthen their monitoring
process for NPAs of the MSME sector as per the RBI guidelines.
• For MSMEs not registered under GST by 31 December 2018, the asset
classification for dues payable will align immediately with the 90-day
norm and not in a phased manner.
6 PwC PwC’s Banking Insights
Review of margin requirements under the Liquidity Adjustment Facility and
Preface
Marginal Standing Facility2
Circular reference:
RBI/2017-18/188 FMOD.MAOG
Impact No.125/01.01.001/2017-18
assessment of Dated 6 June 2018
regulatory changes
in June 2018 Applicability:
All Scheduled Commercial Banks (Excluding
Regional Rural Banks),
Other notifications Scheduled Urban Co-operative Banks and
in June 2018 Standalone Primary Dealers
Contacts Extract from the regulation: As announced in the Second Bi-monthly requirement for rated SDLs shall be 1 per
Monetary Policy Statement for cent lower than that of unrated SDLs for
Currently, the margin requirements under 2018-19, it has now been decided to the same maturity bucket. The revised
the Liquidity Adjustment Facility (Repo) and assign margin requirement on the basis margin requirements for Central
Marginal Standing Facility (MSF) in respect of residual maturity of the collateral, i.e., Government Securities and SDLs being
of Treasury Bills/Central Government dated the Treasury Bills, Central Government offered as collateral would be as given in
securities (including Oil Bonds) and State dated securities (including Oil Bonds) and the table below:
Development Loans (SDLs) stand at 4 per State Development Loans (SDLs). Further,
cent and 6 per cent, respectively. it has also been decided that the margin
Residual Maturity of Collateral
Category of Collateral
0-1 year 1-5 years 5-10 years 10-15 years > 15 years
Treasury Bills and Central Government Dated Securities 0.5% 1% 2% 3% 4%
(including Oil Bonds)
SDLs (unrated) 2.5% 3% 4% 5% 6%
SDLs (rated) 1.5% 2% 3% 4% 5%
2. https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11291&Mode=0
7 PwC PwC’s Banking Insights
The revised margin requirements would
come into force with effect from August 1,
2018. All other terms and conditions of the
Preface
current LAF (Repo) and MSF schemes will
remain unchanged.
Impact Impact assessment:
assessment of • The revised margin requirements
regulatory changes
based on residual maturity will lead to
in June 2018 reduction in the amount of securities
to be offered by banks for obtaining
overnight funds from the RBI (e.g.
for borrowing 100 crore INR from the
Other notifications
RBI under MSF, banks used to provide
in June 2018
government securities of 104 crore
INR; under the revised requirement,
banks will have to provide government
securities of only 101 crore INR if the
residual maturity is between 1–5 years
Contacts and so on).
• The requirement will lead to an
increase in available securities with
banks and eventually, an increase in
the borrowing capacity of banks.
8 PwC PwC’s Banking Insights
Continuation of Interest Subvention Scheme for short-term crop loans on interim
Preface
basis during the year 2018-193
Circular reference:
RBI/2017-18/190 FIDD.CO.FSD.BC.No.21/05.04.001/2017-18
Impact
Dated 7 June 2018
assessment of
regulatory changes Applicability:
in June 2018
The Chairman/ Managing Director & CEOs
All Public & Private Sector Scheduled Commercial Banks
Other notifications
in June 2018 Background and objective:
• The Interest Subvention Scheme (ISS) was launched to
ensure that farmers have easy access to agricultural credit.
Credit is a critical input in achieving higher farm output.
Institutional credit will help in delinking farmers from non-
Contacts institutional sources of credit where they are compelled to
borrow at usurious rates of interest.
• Normally, a farm loan attracts an interest rate of 9%. But
the government has been providing interest subvention
to make available short-term farm credit at an affordable
rate and help boost farm output. Under the scheme, the
government will continue to provide 2% interest subsidy to
ensure farmers get a short-term farm loan of up to 3 lakh
INR at an effective rate of 7%. An additional 3% interest
subsidy will be given to those who repay on time. Thus,
only 4% interest will be charged from prompt repayers.
3. https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11293
9 PwC PwC’s Banking Insights
Extract from the regulation: Scheme for reporting of the same on of the borrower. By doing so, the
ISS portal individual farmer wise to existing system is enhanced and a
• As advised by the Government of India settle the claims arising from 2018- gateway is built to attract only
Preface (GoI), as an interim measure, the 19 onwards. Till such time the DBT genuine farmers who wish to avail
Interest Subvention Scheme will be portal becomes functional banks are concessional crop loans.
implemented in 2018-19 till further requested to submit their claims,
instructions are received, on the category-wise as indicated above.
Impact terms and conditions approved for the
assessment of Scheme for 2017-18. All banks are, • The Bank in consultation with Govt.
regulatory changes therefore, advised to take note and is working on the detailed modalities
in June 2018 implement the Interest Subvention regarding categorisation of loans. Till
Scheme for 2018-19 accordingly. such time the modalities are finalised,
banks may obtain the category-wise
• Further, as advised by GoI, from 2018- data on self-declaration basis. There
19 the ISS is being put on DBT mode should however be no cap on the loans
Other notifications
on ‘In kind/services’ basis and not on given under each category.
in June 2018
‘In cash’ basis and all loans processed
in 2018-19 are required to be brought Impact assessment:
on ISS portal/DBT platform, once it is
• The ISS provides short-term loans
launched.
at reasonable rates and encourages
• In terms of Govt. of India letter F.No. farmers to repay on time and avoid
Contacts
1-4/2017-Credit –I dated August 16, default. These loans will give a boost to
2017, the Interest Subvention Scheme the agricultural produce of the country
as Plan-Non plan categorization of and contribute towards the growth of
schemes will be dispensed with. the economy.
Accordingly, the Interest Subvention
• In recent times, banks have faced
Scheme 2018-19 will be required to be
issues with a rise in NPAs while
settled as applicable in Plan Scheme
providing huge loans to corporates.
viz. Scheduled Caste (SC), Scheduled
With the latest amendments, the banks
Tribe (ST) and North East Region
can gradually accommodate greater
(NER) etc.
lending towards the agricultural sector
• Therefore, banks are required to and can reorient their operations while
capture category-wise data (General, doing so to reduce NPAs.
Scheduled Caste (SC), Scheduled
• The RBI has advised banks to make
Tribes (ST), North Eastern Region
Aadhaar linkage mandatory for
(NER)-General, North Eastern Region
availing short-term crop loans and
(NER)-SC, North Eastern Region
also conducting strong due diligence
(NER)-ST) of beneficiaries under the
10 PwC PwC’s Banking InsightsGold Monetization Scheme, 20154
Preface Circular reference:
RBI/2017-18/192 DBR.IBD.BC.109/23.67.001/2017-18
Dated 7 June 2018
Impact Applicability:
assessment of
regulatory changes All Scheduled Commercial Banks (Excluding
in June 2018
Regional Rural Banks)
Other notifications
in June 2018
Contacts
Background and objective: modified the then existing Gold Deposit lock-in period were improvised. The
Scheme and the Gold Metal Loan Scheme. scheme allows a bank’s customers to
In a country like India, where gold is This scheme was introduced to mobilise deposit their idle gold holdings for a
considered to be a safe investment, Indians the gold held by households and economic fixed period in return for interest in the
keep a significant portion of their wealth institutions and to facilitate its use for range of 2.25% to 2.50%. The main aim
in the form of gold. Gold as such is an other productive purposes. was to utilise the idle gold by putting it
unproductive asset which yields very less to productive use and generating returns
returns as it typically sits idle in lockers Further, in June 2018, certain
for investors and further reducing the
or households. The Gold Monetization characteristics of this scheme, such as
country’s reliance on gold import.
Scheme was introduced in 2015 which maturity, rate of interest and minimum
4. https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11295
11 PwC PwC’s Banking InsightsExtract from the regulation: (a) Maturity interest for the number of remaining
days at the rate of D/360*ARI
• The existing sub-paragraph 2.2.1 (ii) The Medium Term Government
Preface shall be amended to read as follows: Deposit (MTGD) can be made for 5-7 Where, ARI= Annual Rate of Interest
years and Long Term Government
“The short term deposits shall be D= Number of days
Deposit (LTGD) for 12-15 years or for
treated as bank’s on-balance sheet such period as may be decided by the (c) The periodicity of interest
liability. These deposits will be made Central Government from time to time. payment
Impact with the designated banks for a short Deposits can also be allowed for broken The periodicity of interest payment
assessment of period of 1-3 years (with a facility of
regulatory changes
periods (e.g. 5 years 7 months; 13 years on these deposits is annual and shall
roll over). Deposits can also be allowed 4 months 15 days; etc.).
in June 2018 for broken periods (e.g. 1 year 3 be paid on 31st March every year. A
months; 2 years 4 months 5 days; etc.). (b) Rate of interest: depositor will have an option to receive
The rate of interest payable in the case payment of simple interest annually
The rate of interest on such deposits
of deposits for maturities with broken or cumulative interest at the time
will be decided by Central Government
Other notifications periods shall be calculated as the sum of maturity, in which case it will be
and will be notified by Reserve Bank
in June 2018 of interest for the completed year plus compounded annually. This option
of India from time to time. The current
interest for the number of remaining shall be exercised at the time
rate of interest as notified by the
days at the rate of D/360*ARI” of deposit.
Central Government are as under:
Where, ARI= Annual Rate of Interest (d) Minimum lock-in period
i) On medium term deposit –
D= Number of days 2.25% p.a. A Medium Term Government Deposit
Contacts
• The existing sub-paragraph 2.2.2 (iv) (MTGD) is allowed to be withdrawn
ii) On long term deposit – 2.50% p.a.
shall be amended to read as follows: any time after 3 years and a Long
The rate of interest payable in the case Term Government Deposit (LTGD)
“(iv) Other features of the Medium
of deposits for maturities with broken after 5 years.
and Long Term Government Deposit
periods shall be calculated as the sum
(MLTGD) shall be as under:
of interest for the complete year plus
2 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11186&Mode=0
12 PwC PwC’s Banking Insights(e) Interest on premature withdrawal
The amount payable to the depositor on premature withdrawal after lock-in period shall be calculated as a sum
Preface of (A) and (B), as indicated below:
(A) Actual market value of the gold deposit on the day of withdrawal
(B) Interest payable on the value of the gold at the time of deposit as under.”
Impact
assessment of Type of deposit Lock-in period (years) Actual period for which the deposit has run (years)
regulatory changes
>3 and < 5 ≥5 and < 7
in June 2018
MTGD 3 Applicable rate for MTGD at the time of Applicable rate for MTGD at the time of
deposit - 0.375% deposit - 0.25%
Other notifications
Type of deposit Lock-in period (years) Actual period for which the deposit has run (years)
in June 2018
>3 and < 5 ≥ 7 and < 12 ≥12 and < 15
LTGD 5 Applicable rate for MTGD Applicable rate for LTGD Applicable rate for LTGD at
at the time of deposit - at the time of deposit - the time of deposit - 0.25%
0.25% 0.375%
Contacts
3 https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11185
13 PwC PwC’s Banking Insights• The existing sub-paragraph 2.2.2 (v) October 22, 2015 on Gold Monetization
shall be amended as under: Scheme, 2015 has been updated
incorporating the above changes.
Preface “In the case of MLTGD, the redemption
of principal at maturity shall, at the Impact assessment:
option of the depositor, be either
in Indian Rupee equivalent of the • This is an opportunity provided to the
value of deposited gold at the time of customers of the banks to deposit their
Impact physical gold with a minimum lock-in
assessment of
redemption, or in gold. However, any
pre-mature redemption of MLTGD period of 3 years and to avail interest
regulatory changes
shall be only in INR. Where the on it instead of the yellow metal lying
in June 2018 idle in their households or lockers and
redemption of the deposit is in gold, an
administrative charge at a rate of 0.2% yielding no interest.
of the notional redemption amount in • After a small success derived from the
Other notifications terms of INR shall be collected from Gold Monetization Scheme of 2015,
in June 2018 the depositor. However, the interest the government has made certain
accrued on MLTGD shall be calculated changes to the scheme to reduce the
with reference to the value of gold in demand for physical gold and shift a
terms of Indian Rupees at the time of part of the gold imported every year
deposit and will be paid only in cash.” for investment purposes into financial
Contacts • The existing sub-paragraph 2.2.2 (ix) savings through gold bonds. This
shall be amended as under: revamp will enable more individuals to
open a hassle-free gold deposit account
“Central Government has decided that and contribute towards the shift.
with effect from November 5, 2016,
designated banks will be paid handling • The government will be formulating a
charges (including gold purity testing, comprehensive gold policy to develop
refining, transportation, storage and gold as an asset class. They will also
any other relevant costs) for MLTGD at soon establish a consumer-friendly and
a flat rate of 1.5% and commission at trade-efficient system of regulated gold
the rate of 1% of the rupee equivalent exchanges in the country. With these
of the amount of gold mobilized under initiatives, the dependency on physical
the scheme until further notice.” gold should come down considerably
and there should be a significant
• The Reserve Bank of India growth in the wealth of investors,
Master Direction No.DBR.IBD. providing a boost to the country’s
No.45/23.67.003/ 2015-16 dated economy.
4 https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=11183&Mode=0
14 PwC PwC’s Banking InsightsExternal Commercial Borrowings (ECBs) – Monthly reporting
Preface
through ECB 2 Return5
Circular reference:
RBI/2017-18/193
Impact A. P. (DIR Series) Circular No. 29
assessment of Dated 7 June 2018
regulatory changes
in June 2018 Applicability:
All Category I Authorised Dealer Banks
Other notifications Extract from the regulation:
in June 2018 Attention of Authorized Dealer Category • Revised monthly reporting format of
I (AD Category I) banks is invited to ECB 2 Return would be applicable from
Annex III of Part V of Master Direction month-end June 2018
No.18/2015-16 dated January 01, 2016
on Reporting under Foreign Exchange
Contacts Management Act, 1999, as amended from Impact assessment:
time to time. • Banks will have to bring the contents
• It has been decided to capture the of this circular to the notice of their
details of the hedges for ECBs through constituents and customers.
a simplified format of ECB 2 Return. • Banks will have to ensure timely
Part E of the Return, accordingly, is submission of ECB 2 Return as any
modified so as to include only standard lapse at the time of reporting through
information on hedged/unhedged ECB this return and/or failure to adhere
exposure. Details of hedging in Part to the timeline of its submission and/
E.1 of the Return and foreign exchange or any lapse at the time of reporting
earnings and expenditure in Part E.2 through Form 83 is a contravention of
of the Return should be furnished in the provisions of the Foreign Exchange
additive format. Further, for reporting Management Act, 1999 (42 of 1999).
in respect of natural hedge, provisions
contained in paragraph 2 (iii) of A.P. 5 https://www.rbi.org.in/Scripts/NotificationUser.
(DIR Series) Circular No. 15 dated aspx?Id=11296&Mode=0
November 07, 2016 should
be followed.
15 PwC PwC’s Banking InsightsForeign Investment in India - Reporting in Single Master Form6
Preface
Circular reference:
RBI/2017-18/194 A.P (DIR Series) Circular No.30
Impact Dated 7 June 2018
assessment of
regulatory changes
in June 2018 Applicability:
All Category – I Authorised Dealer Banks
Other notifications
Background and objective: issue of security by a person resident the requirements to be provided in the
in June 2018 outside India) Regulations 2017, dated Entity Master. The final form, when
In alliance with the Indian government’s November 7, 2017}, as also investment hosted, will be available in the Master
efforts to strengthen foreign investment by persons resident outside India in an Direction-Reporting under FEMA,
and ease of doing business in India, the Investment Vehicle. 1999.
RBI issued a circular on 7 June 2018 with
the aim of simplifying reporting under the 2. Prior to the implementation of the 4. AD Category-I banks may bring the
Contacts SMF, Reserve Bank would provide an contents of this circular to the notice
Foreign Exchange and Management Act
(FEMA), 1999. interface to the Indian entities, to input of their customers / constituents
the data on total foreign investment in concerned.
Extract from the regulation: a specified format. The interface will be 5. The directions contained in this
available on RBI website https://firms. circular have been issued under
Reserve Bank, with the objective of
rbi.org.in from June 28, 2018 to July sections 10(4) and 11(1) of the Foreign
integrating the present reporting
12, 2018. Indian entities not complying Exchange Management Act (FEMA),
structures of various types of foreign
with this pre-requisite will not be 1999 (42 of 1999) and are without
investment in India, will introduce a
able to receive foreign investment prejudice to permissions / approvals, if
Single Master Form (SMF). The SMF
(including indirect foreign investment) any, required under any other law.
would be filed online.
and will be non-compliant with Foreign
1. SMF would provide a facility for
Exchange Management Act, 1999 and
reporting total foreign investment in
regulations made thereunder.
an Indian entity {as defined in Foreign
Exchange Management (Transfer or 3. The entities may be in readiness with
6 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11297&Mode=0
16 PwC PwC’s Banking InsightsPreface
Impact assessment:
The SMF for reporting of various
Impact investments under FEMA (transfer or
assessment of issue of security by a person resident
regulatory changes outside India) Regulations is a welcome
in June 2018 move by the RBI as it would ensure much-
needed uniformity in terms of various
kinds of reporting that Indian entities are
obligated to do every time they receive
Other notifications foreign capital.
in June 2018 However, considering the current practices
of e-Biz filing through the AD Bank and
the varying timelines provided in the
regulations for relevant reporting, the said
transition and process of incorporation
Contacts might bring in a few practical challenges.
Along with Indian entities, foreign
investors who have invested in such
entities should also be familiar with such
reporting and the associated timeline to
ensure that they are allowed to invest
further capital into their subsidiaries or
other investment companies in India.
17 PwC PwC’s Banking InsightsInterest rate options in India7
Preface
Circular reference:
RBI/2017-18/198 FMRD.DIRD.9 /14.01.020/2017-18
Impact Dated 14 June 2018
assessment of
regulatory changes
in June 2018 Applicability:
All Eligible market participants
Other notifications
Background and objective: • The Reserve Bank of India has
in June 2018 accordingly issued a Notification
The RBI has permitted the use of interest No.FMRD.DIRD.8/2018 dated June
rate swaptions in rupees to hedge interest 14, 2018 enabling the introduction of
rate risk. Swaptions are basically options swaptions.
that give the holder the right but not the
obligation to enter into an underlying • These directions have been issued
Contacts under Section 45 W of Chapter III D of
swap. A swap is nothing but a derivative
contract through which two parties can the Reserve Bank of India Act, 1934.
exchange financial instruments. • The Interest Rate Options (Reserve
Extract from the regulation: Bank) Directions, 2018 will supersede
the Interest Rate Options (Reserve
As announced in the first bi-monthly Bank) Directions, 2016 dated
Monetary Policy Statement 2018-19 dated December 28, 2016.
April 05, 2018, it has now been decided to
permit Interest Rate Swaptions in Rupees • These directions shall come into force
so as to enable better timing flexibility for with effect from June 15, 2018.
the market participants seeking to hedge
their interest rate risk.
7 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11302&Mode=0
18 PwC PwC’s Banking InsightsPreface
Impact assessment: be reported within 30 minutes of the be settled bilaterally or through any
trade to the Trade Repository of the clearing arrangement approved by
• This move, which will deepen the Clearing Corporation of India Limited the RBI for the purpose. Settlement
Impact domestic derivative market, is a big
assessment of (CCIL) since interest rate options are basis and other market conventions
positive for participants looking to permitted on exchanges authorised by for OTC transactions in interest rate
regulatory changes hedge their interest rate risk.
in June 2018 SEBI as well as in the OTC market. options will be specified by Fixed
• Banks will have to ensure all over- Income Money Market and Derivatives
• As regards the settlement of these
the-counter (OTC) transactions Association (FIMMDA) in consultation
transactions, OTC transactions
executed among market makers shall with market participants.
executed among market makers shall
Other notifications
in June 2018
Contacts
19 PwC PwC’s Banking InsightsInvestment by Foreign Portfolio Investors (FPI) in Debt - Review8
Preface
Circular reference:
RBI/2017-18/199 A.P. (DIR Series) Circular No. 31
Impact Dated 15 June 2018
assessment of
regulatory changes Applicability:
in June 2018 All Authorised Persons
Background and objective: −− Short-term investments” are Institutions in which Government
defined as investments with of India is a member.
Other notifications The RBI in consultation with the Securities residual maturity up to one year; (b) Revision of minimum residual
in June 2018 Exchange Board of India (SEBI) revised the −− The term “related FPIs” shall maturity requirement
limits of debt investments by FPIs at the end mean ‘investor group’ as defined
of April 2018 by issuing 2 notifications—one −− In terms of A.P. (DIR Series) Circular
in Regulation 23(3) of SEBI
on 27 April 2018 and the other on 1 May No. 13 dated July 23, 2014, FPIs were
(Foreign Portfolio Investors)
2018—with the objective of simplifying the required to invest in Government
Regulations, 2014;
process of investments into debt instruments bonds with a minimum residual
Contacts −− The term “entities related to
by FPIs in India. Based on the feedback maturity of three years. Henceforth,
the corporate” shall have the
received from custodians, FPIs and other FPIs are permitted to invest in
meaning assigned to ‘related
stakeholders, it has been decided to provide Central Government securities
party’ in section 2(76) (viii) of
some operational flexibility as well as a (G-secs), including in Treasury
the Companies Act, 2013. Issuers
transition path for FPIs and custodians to Bills, and State Development Loans
that are owned or controlled by
adapt to these regulations. (SDLs) without any minimum
the Government of India or State
residual maturity requirement,
Extract from the regulation: Governments shall be exempted
subject to the condition that short-
from the definition of “entities
• In supercession of the directions term investments by an FPI under
related to the corporate”;
contained in AP (DIR Series) Circular either category shall not exceed 20%
−− “SRs” mean Security Receipts
No. 24 dated April 27, 2018 and AP of the total investment of that FPI in
issued by Asset Reconstruction
(DIR Series) Circular No. 26 dated that category.
Companies;
May 1, 2018, the following directions −− In terms of A.P. (DIR Series) Circular
−− “Multilateral Financial
are issued: No. 71 dated February 03, 2015, FPIs
Institutions” mean FPIs which
were required to invest in corporate
(a) Definitions are Multilateral Financial
bonds with a minimum residual
8 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11303&Mode=0
20 PwC PwC’s Banking Insightsmaturity of three years. Henceforth, (c) Revision of security-wise limit Custodians and FPIs may note
FPIs are permitted to invest in that any transaction that leads to a
−− The cap on aggregate FPI investments
corporate bonds with minimum breach of the investment limit for the
Preface in any Central Government security,
residual maturity of above one year, category will need to be reversed.
currently at 20% of the outstanding
subject to the condition that short- −− Upon sale/redemption of securities
stock of that security stands revised to
term investments in corporate bonds (in G-secs and SDLs), the concerned
30% of the outstanding stock of that
by an FPI shall not exceed 20% of FPIs may reinvest within a period of
security.
Impact the total investment of that FPI in two working days from the date of
assessment of corporate bonds. These stipulations (d) Online monitoring of investments in sale/redemption (including date of
regulatory changes would not apply to investments in G-sec and SDL Categories sale/redemption). If the reinvestment
in June 2018 SRs by FPIs. is not made within that time period,
−− FPIs were permitted to invest in
−− The requirement that short-term G-secs till the limit utilization reinvestment shall be subject to
investments shall not exceed 20% reaches 90%, after which the availability of limits for that category.
of total investment by an FPI in any auction mechanism was triggered −− The primary responsibility of
Other notifications category applies on an end-of-day complying with all limits for
for allocation of the remaining limit.
in June 2018 basis. At the end of any day, all investment in G-secs and SDLs viz.,
With Clearing Corporation of India
investments with residual maturity Ltd. (CCIL) commencing online investment utilization limit, security
of up to one year will be reckoned for monitoring of utilization of G-sec wise limit in G-secs, concentration
the 20% limit. limits, the auction mechanism has limit and minimum residual maturity
−− Short-term investments by an FPI been discontinued with effect from requirement shall lie with the FPIs
Contacts may exceed 20% of total investments, June 1, 2018. and custodians.
only if the short-term investments −− Utilization of FPI investment limits in −− CCIL will also monitor the various
consist entirely of investments made G-secs and SDLs is being monitored other limits and caps for FPI
on or before April 27, 2018; that online by the Clearing Corporation investment in G-secs and SDLs. The
is, short-term investments do not of India Ltd. (CCIL). Any transactions operationalization of the same will be
include any investment made after in breach of the investment limit in notified by CCIL.
April 27, 2018. each category will not be accepted.
21 PwC PwC’s Banking InsightsPreface
(e) Concentration limit • In case an FPI has investments (INV0) −− No FPI shall have an exposure of
within the concentration limit, but in more than 20% of its corporate
Investment by any FPI (including
excess of 7.5% (12.5% in case of FPIs bond portfolio to a single corporate
Impact investments by related FPIs), in each of
in the ‘Long-term’ sub-category) of (including exposure to entities
the three categories of debt, viz., G-secs,
assessment of the investment limit for the category related to the corporate).
regulatory changes SDLs and corporate debt securities, shall
on the effective date, that FPI shall • In case an FPI has, as on April 27,
in June 2018
be subject to the following concentration
be allowed to undertake additional 2018, exposure in excess of 20% to
limits:
investments such that its portfolio any corporate (including exposure to
−− Long-term FPIs: 15% of prevailing size at the end of any day (INVt) does entities related to the corporate), it
investment limit for that category. not exceed INV0 plus 2.5% of the shall not make further investments in
Other notifications −− Other FPIs: 10% of prevailing investment limit for the category on that corporate until this requirement
in June 2018 investment limit for that category. the effective date. Once INVt falls is met.
−− In case an FPI has investments (INV0) below the prevailing concentration
in excess of the concentration limit • ‘New’ investments (i.e., investments
limit for the category, the FPI shall be
on the effective date (date on which made after April 27, 2018) by FPIs
free to make investments up to the
these concentration limits come would be exempted from this
applicable concentration limit.
into existence), it will be allowed requirement till March 31, 2019.
Contacts
the following relaxations, subject to • All other FPIs will be allowed to invest These ‘new’ investments will,
availability of overall category limits, as up to the applicable concentration limit. however, have to comply with this
a one-time measure: requirement thereafter.
• In case an FPI has investments (INV0) (f) Single/Group investor-wise limits in
• To facilitate newly registered FPIs
in excess of the concentration limit on corporate bonds
to build up a diversified portfolio,
the effective date, it will be allowed FPI investment in corporate bonds
FPIs registering after April 27, 2018
to undertake additional investments shall be subject to the following
are permitted to comply with this
such that its portfolio size at the end requirements:
requirement by March 31, 2019,
of any day (INVt) does not exceed −− Investment by any FPI, including or six months from the date of
INV0 plus 2.5% of investment limit investments by related FPIs, shall registration, whichever is later.
for the category on the effective not exceed 50% of any issue of a
date. Once (INVt) falls below the • The requirements of single/group
corporate bond. In case an FPI,
prevailing concentration limit for investor-wise limits in corporate
including related FPIs, has invested in
the category, the FPI shall be free to bonds would not be applicable
more than 50% of any single issue, it
make investments up to the applicable to investments by Multilateral
shall not make further investments in
concentration limit. Financial Institutions and
that issue until this stipulation is met.
investments by FPIs in SRs.
22 PwC PwC’s Banking Insights(g) Pipeline investments in corporate (h) Other changes monitoring of G-secs/SDLs utilisation limits
bonds No FPI shall invest in partly paid debt by the CCIL, depositories shall share the
instruments. investor group data with the RBI and CCIL on
Preface • Investment transactions by FPIs
a monthly basis.
in corporate bonds that were These directions would be applicable with
under process but had not immediate effect. The directions contained in The stock exchanges and depositories shall
materialized as on April 27, 2018 AP (DIR Series) Circular No. 24 dated April put in place the necessary systems for the
(pipeline investments), shall be 27, 2018 and AP (DIR Series) Circular No. 26 online monitoring of the investment limits.
Impact
exempt from the requirements dated May 1, 2018 stand withdrawn. Appropriate action may be initiated against
assessment of
regulatory changes specified in paragraphs 4(f) The directions contained in this circular have FPIs who are not in compliance with the
(i) and 4(f)(ii) of this circular, been issued under sections 10(4) and 11(1) requirements specified here.
in June 2018
subject to the custodian of the FPI of the Foreign Exchange Management Act, The increase in limits on FPI investments
reasonably satisfying itself that: 1999 (42 of 1999) and are without prejudice along with the easing of minimum residual
−− The major parameters such as to permissions/ approvals, if any, required maturity from 3 years to 1 year should
Other notifications price/rate, tenor and amount of under any other law. encourage FPI investment into India’s
in June 2018 the investment have been agreed corporate debt markets. Additionally,
Impact assessment: introducing exposure limits could impact the
upon between the FPI and the
issuer on or before April 27, 2018; The primary responsibility of complying with entry of new FPI entrants into the market.
−− The actual investment will monitoring the corporate debt investment
commence by December 31, limits is with the FPIs on whose behalf
2018; and depositories will monitor the investment
Contacts
−− The investment is in conformity limits. As the depositories are maintaining
with the extant regulations the data on investor group level, depositories
governing FPI investments in shall monitor the investments at the investor
corporate bonds prior to group level. Custodians shall be responsible
April 27, 2018. for monitoring their own clients.
(ii) Custodians may, based on their At the time of monitoring the corporate debt
assessment of adherence to the above investment limits, depositories shall identify
conditions, permit, or not permit, as the case the FPIs in breach and inform their respective
may be, pipeline investments by FPIs without custodians, who, in turn, shall advise their
reference to the Reserve Bank. FPI clients on doing the needful. For the
23 PwC PwC’s Banking InsightsPrudential Norms for Classification, Valuation and Operation of Investment
Preface Portfolio by Banks – Spreading of MTM losses and creation of Investment
Fluctuation Reserve (IFR)9
Impact Circular reference:
assessment of RBI/2017-18/200 DBR.No.BP.BC.113/21.04.048/2017-18
regulatory changes Dated 15 June 2018
in June 2018
Applicability:
All Scheduled Commercial Banks & Small Finance Banks (SFBs)
Other notifications Extract from the regulation: notes to accounts/ quarterly results for banks yet again. In April 2018,
in June 2018 providing details of - the RBI had allowed banks to spread
1. In view of the continuing rise in the provisioning for mark-to-market losses
yields on Government Securities, as • the provisions made for
depreciation of the investment on investments held in AFS and HFT
also the inadequacy of time to build for third and fourth quarters of 2017–
investment fluctuation reserve (IFR) portfolio for the quarter ending
June 2018 and 18.
for many banks, it has been decided
Contacts
to grant banks the option to spread 2. As per this guideline, banks have been
• the balance required to be made in
provisioning for their mark to market given an option to spread provisioning
the remaining quarters.
(MTM) losses on all investments held for their MTM losses on all investments
3. It may be noted that the other held in AFS and HFT for the quarter
in available for sale (AFS) and held
requirements prescribed in the above ending 30 June 2018 as well. If the
for trading (HFT) for the quarter
circular, including creation of IFR, banks avail this option, they will have
ending June 30, 2018 as well. The
remain in force. to spread the provision over up to
provisioning required may be spread
equally over up to four quarters, four quarters, commencing with the
commencing with the quarter ending quarter ending 30 June 2018.
Impact assessment:
June 30, 2018. 3. Further, they will have to make
1. In the wake of the continuing rise suitable disclosures in their notes to
2. Banks that utilise the above option
in government securities’ yields, the accounts/quarterly results and provide
shall make suitable disclosures in their
RBI has eased the provisioning norms details of –
9 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11304&Mode=0
24 PwC PwC’s Banking InsightsPreface
• the provisions made for depreciation • net profit for the year less mandatory and loss account at the end of any
of the investment portfolio for the appropriations until the amount of accounting year.
quarter ending June 2018 IFR is at least 2% percent of the HFT 6. In its erstwhile guidelines on the same
Impact and AFS portfolio on a continuing subject, the RBI had advised banks to
• the balance required to be made in
assessment of basis. Where feasible, this should be create an IFR with effect from the year
the remaining quarters
regulatory changes achieved within a period of 3 years. 2018–19. The IFR shall continue to be
in June 2018 4. Banks will continue to transfer an eligible for inclusion in tier 2 capital.
5. Banks may, at their discretion, draw
amount not less than the lower of the
down the balance available in IFR in
following to the IFR –
excess of 2% of their HFT and AFS
• net profit on sale of investments portfolio for credit to the balance of
Other notifications during the year
in June 2018 profit/loss as disclosed in the profit
Contacts
25 PwC PwC’s Banking InsightsBasel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR),
Preface Liquidity Risk Monitoring Tools and LCR Disclosure Standards10
Circular reference:
Impact RBI/2017-18/201
assessment of DBR.BP.BC.No.114/21.04.098/2017-18
regulatory changes Dated 15 June 2018
in June 2018
Applicability:
All Scheduled Commercial Banks (excluding RRBs) & Small Finance Banks (SFBs)
Other notifications Background: Extract from the regulation: by them up to another 2 per cent of
in June 2018 their NDTL, under FALLCR within the
The liquidity coverage ratio (LCR) aims at 1. The regulation reads as below: mandatory SLR requirement, as Level
ensuring the availability of a set level of 2. Presently, the assets allowed as the 1 HQLA for the purpose of computing
high-quality liquid assets (HQLAs), which Level 1 High Quality Liquid Assets their LCR. Hence, the carve-out from
can be readily converted into cash to meet (HQLAs) for the purpose of computing SLR, under FALLCR will now be 11 per
the liquidity needs for 30 days under a the LCR of banks, inter alia, include (a) cent, taking the total carve out from SLR
Contacts
significantly severe liquidity stress scenario. Government securities in excess of the available to banks to 13 per cent of their
The LCR was introduced by the RBI, starting minimum SLR requirement and, (b) NDTL.
with a minimum requirement of 60% from 1 within the mandatory SLR requirement,
January 2015 and reaching minimum 100% 4. For the purpose of LCR, banks shall
(i) Government securities to the extent continue to value such government
on 1 January 2019. The LCR is a ratio of allowed by RBI under Marginal Standing
stock of HQLAs to the total net cash outflows securities reckoned as HQLA at an
Facility (MSF) [presently 2 per cent of amount not greater than their current
over the next 30 calendar days. Liquid assets the bank’s NDTL] and (ii) under Facility
comprise high-quality assets that can be market value (irrespective of the category
to Avail Liquidity for Liquidity Coverage under which the security is held, i.e.,
readily sold or used as collateral to obtain Ratio (FALLCR) [presently 9 per cent of
funds in a range of stress scenarios. There HTM, AFS or HFT).
the bank’s NDTL].
are two categories of assets which can be
3. It has been decided to permit banks,
included in the stock of HQLAs, viz. Level 1
with effect from the date of this circular,
and Level 2 assets.
to reckon Government securities held
10 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11305&Mode=0
26 PwC PwC’s Banking InsightsPreface
Impact assessment:
1. This is a move in order to support banks’
Impact compliance with the 100% LCR requirement
assessment of by January 2019.
regulatory changes 2. For computation of HQLA, banks can now
in June 2018 consider G-secs held by them under the
FALLCR up to 13% of their net demand and
time liabilities (NDTL).
3. The valuation of such securities should not be
Other notifications more than the current market value.
in June 2018
4. This action would help the banks in
measuring their ability to absorb economic
shocks through maintenance of the LCR.
Contacts
27 PwC PwC’s Banking InsightsPriority Sector Lending – Targets and Classification11
Preface
Circular reference:
Impact RBI/2017-18/203 FIDD.CO.Plan.BC.22/04.09.01/2017-18
assessment of Dated 19 June 2018
regulatory changes
in June 2018 Applicability:
All Scheduled Commercial Banks (Excluding Regional Rural Banks and Small Finance Banks)
Other notifications Background: RBI raised the housing loan limits under sector lending will be revised to ₹ 35
in June 2018 PSL for economically weaker sections and lakh in metropolitan centres (with
Several changes have been made to lower income groups. population of ten lakh and above), and
priority sector lending (PSL) norms by the ₹ 25 lakh in other centres, provided
RBI in recent times. The changes included Extract from the regulation: the overall cost of the dwelling unit in
new categories of PSL and separate 1. In terms of the above Master Direction, the metropolitan centre and at other
targets for weaker sections. Priority loans to individuals up to ₹ 28 lakh in centres does not exceed ₹ 45 lakh and ₹
Contacts
sector non-achievement is assessed on a metropolitan centres (with population 30 lakh, respectively.
quarterly average basis at the end of the of ten lakh and above) and ₹ 20
respective year instead of an annual basis, 3. Furthermore, the existing family
lakh in other centres, are eligible to income limit of ₹ 2 lakh per annum,
as done at present. Banks which face a be classified under priority sector,
shortfall in lending to priority sectors/ prescribed under Para 10.4 of the
provided that the cost of dwelling unit above Master Direction, for loans to
subsectors at the necessary targets are does not exceed ₹ 35 lakh and ₹ 25
required to contribute to the funds of the housing projects exclusively for the
lakh, respectively. purpose of construction of houses
Rural Infrastructure Development Fund
2. With a view to bringing convergence for Economically Weaker Sections
(RIDF) and similar funds set up with
of the Priority Sector Lending (EWS) and Low Income Groups (LIG),
the National Bank of Agriculture and
guidelines for housing loans with the is revised to ₹ 3 lakh per annum for
Rural Development (NABARD)/Small
Affordable Housing Scheme, and to EWS and ₹ 6 lakh per annum for LIG,
Industries Development Bank of India
give a fillip to low-cost housing for in alignment with the income criteria
(SIDBI)/National Housing Bank (NHB).
the Economically Weaker Sections specified under the Pradhan Mantri
In a boost to affordable housing under the
and Low Income Groups, the housing Awas Yojana.
Pradhan Mantri Awas Yojana (PMAY), the
loan limits for eligibility under priority
11 https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11308
28 PwC PwC’s Banking InsightsPreface
4. All other terms and conditions
specified under the Master Direction
shall remain unchanged. Master
Impact Direction ibid, is being updated
assessment of simultaneously to reflect the above
regulatory changes changes.
in June 2018 5. The revised guidelines shall come into
effect from the date of the Circular.
Impact assessment:
Other notifications
1. Even as the PSL requirements are eased
in June 2018 in the housing segment, banks need to
take measures to minimise their credit
risk and also monitor NPAs arising
from low-ticket buckets of the housing
loan market. Banks must strengthen
Contacts their screening and monitoring process
and follow up in respect of lending to
this segment in particular.
2. The RBI is closely monitoring the
housing segment and may even
consider tightening of the loan-to-
value (LTV) ratios or an increase in the
risk weights in such categories when
necessary.
3. Banks should try to orient their
operations and expand their lending
to support the growth of affordable
housing across India.
29 PwC PwC’s Banking InsightsLiberalised Remittance Scheme – Harmonisation of Data and Definitions12
Preface
Circular reference:
RBI/2017-18/204
A.P. (DIR Series) Circular No. 32
Impact Dated 19 June 2018
assessment of
regulatory changes
in June 2018
Applicability:
All Category - I Authorised Dealer Banks
Other notifications
in June 2018 Background and objective: Extract from the regulation:
The Reserve Bank of India (RBI) has tightened the norms for • It has been decided that furnishing of Permanent Account
remitting funds abroad under the Liberalised Remittance Scheme Number (PAN), which hitherto was not to be insisted upon
(LRS), making PAN mandatory for anyone using this scheme. while putting through permissible current account transactions
Through the LRS, it was noticed that many Indian citizens and of up to USD 25,000, shall now be mandatory for making all
Contacts traders were remitting funds to bet on stocks and properties, remittances under Liberalised Remittance Scheme (LRS).
breaching specified limits under the scheme. Going forward,
• Further, in the context of remittances allowed under LRS
banks will be using the PAN of the remitter as a unique identifier
for maintenance of close relatives, it has been decided, in
to aggregate the remitter-wise data.
consultation with Government, to align the definition of
‘relative’ with the definition given in Companies Act, 2013
Impact assessment: instead of Companies Act, 1956.
• All Category-I Authorised Dealer Banks will have to ensure that
PAN is furnished for making all remittances under the LRS.
• This will have a positive impact as it will ensure that money
being transferred abroad is tax-paid money and will also serve
as a monitoring mechanism for these remittances to ensure that
individuals adhere to the limits prescribed.
12 https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11309
30 PwC PwC’s Banking InsightsControl measures for ATMs – Timeline for compliance13
Preface
Circular reference:
Impact DBS(CO).CSITE/BC.5/31.01.015/2017-18
assessment of Dated 21 June 2018
regulatory changes
in June 2018 Applicability:
All Scheduled Commercial Banks (excluding Regional Rural Banks)
All Small Finance Banks and Payment Banks
Other notifications White-Label ATM Operators
in June 2018
Background and objective: on an unsupported version of the operating system and non-
implementation of other security measures have affected the
• A circular DBS.CO/CSITE/BC.8074/31.01.015/2016-17 dated interests of banks’ customers adversely as well as affected their
17 April 2017 was issued to banks highlighting concerns about image. There has been a spate of ATM frauds in recent times
ATMs running on Windows XP and/or other unsupported which underlines the RBI’s concern in the area of ATM security.
Contacts
operating systems.
• Banks were advised to put in place, with immediate effect, Synopsis of the regulation:
suitable controls enumerated in the illustrative list of controls • In order to address the issues around ATM security in a
as part of the advisory issued. time-bound manner, banks and white-label ATM operators
• The slow progress on the part of banks in addressing these are advised to initiate immediate action in this regard
issues, the vulnerability arising from banks’ ATMs operating and implement the following control measures as per the
prescribed timelines:
13 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11311&Mode=0
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