Banking Current Affairs - Current Affairs Today - Page 9


RBI tightens merger rules for NBFCs

According to Reserve Bank of India (RBI), Non-Banking Financial Companies (NBFCs) to take its prior approval before buying shares of other NBFCs or for merger and acquisition with another entity.

This rule will be applicable to both deposit taking and non-deposit accepting companies and any infringement of it may cost the company its registration.

Prior written clearance of RBI would also be mandatory before approaching the Court or Tribunal seeking order for mergers or amalgamations with other companies or NBFCs.

Performance ratings of Banks’ customer services to be made public from 2015

From 2015, performance ratings of Banks on customer services will be put in public domain by Banking Codes Standards Board of India (BCSBI).

BCSBI is rating banks on customer services on 5 parameters:

  1. Information dissemination
  2. Transparency
  3. Customer-centricity
  4. Grievance redressal system
  5. Customer feedback.

BCSBI rated 48 banks for customer service of which only 5 scored high ratings; 25 were rated above average; 17 average; and one below average. The ratings will be made public in 2015. However, banks are not allowed to use these ratings to solicit business.

Code of Bank’s Commitment to Customers

The Code of Bank’s Commitment to Customers is a Code of Customer Rights, which sets minimum standards of banking practices that member banks have to comply with when they deal with individual customers. The Code provides protection to customers and explains the manner in which banks are supposed to deal with customers in their day-to-day operations.

Banking Codes Standards Board of India (BCSBI) 

The Reserve Bank of India established BCSBI in 2007 to ensure that the common consumer of financial services from the banking industry gets what he/she has been promised. The Board operates as an independent and autonomous body. Membership of BCSBI is voluntary and open to scheduled banks.

RBI eases gold import to promote its export under its 20:80 formula

Star trading houses — big importers and exporters has been permitted by the RBI to import gold under its existing 20:80 scheme. Thus far, the facility was available to select banks only and other big entities like star trading houses were forbidden from importing the yellow metal.

As per the extant rules, importers can buy gold, on a condition that 20% of it is exported as finished products. In July 2013, the RBI had imposed severe restrictions on gold imports in order to curb surging Current Account Deficit (CAD) and the declining rupee. The central bank had tied imports with exports and prescribed a 20:80 formula.

As per the 20:80 scheme, an importer has to ensure that at least 20% of every lot of imported gold is exclusively made available for exports as finished good and the balance for domestic use.

The RBI has also permitted banks to provide gold metal loans to domestic jewellery manufacturers, out of the eligible domestic import quota of 80%.

Bharatiya Mahila Bank included in second schedule to RBI Act 1934

Bharatiya Mahila Bank (BMB), India’s first all-women bank, has been included in the second schedule to the RBI Act 1934.

With the inclusion in the second schedule or commercial bank category, the bank has become eligible for loans from RBI on bank rate and also gets membership of clearing houses. Furthermore, it assures that any activity of the bank would not adversely affect the interests of depositors.

BMB has been in existence since November 2013 which began with a seed capital of Rs 1,000 crore. To focus on the banking needs of women and promote economic empowerment is one of the main objectives of BMB.

At present, the loan portfolio of the BMB is about Rs 80-90 crore. It offers loan to girl child at a concessional rate which is 1% lower than the normal rates.