Regional Rural Banks Current Affairs - 2019

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RBI issues norms to set up Currency Chests

The Reserve Bank of India (RBI) has issued guidelines for banks to set up new currency chests. The guidelines include:

  • Area of the strong room/ vault of at least 1,500 sq ft. For those situated in hilly/ inaccessible places, the strong room/ vault area of at least 600 sq ft.
  • The new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. Those situated in the hilly/ inaccessible places, a capacity of 2.1 lakh pieces of banknotes per day.
  • The currency chests should have Chest Balance Limit (CBL)  of Rs 1,000 crore, subject to ground realities and reasonable restrictions, at the discretion of the Reserve Bank.

Currency Chest

Currency chest is the place where the currency is stored. These chests act as the distributives of RBI cash and enable RBI to take back soiled notes and mutilated notes from the public.

As per the RBI’s annual report of 2017-18, the currency management infrastructure consists of a network of 19 issue offices of the Reserve Bank, 3,975 currency chest and 3,654 small coin depots of commercial, co-operative and regional rural banks spread across the country.

Month: Categories: Business, Economy & BankingUPSC

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Implementation of Indian Accounting Standards deferred by RBI

The Reserve Bank of India (RBI) has deferred the implementation of new accounting rules, Indian Accounting Standards (Ind AS) for banks till further notice. This is the second extension provided by the RBI. Earlier in April 2018, RBI had postponed the implementation of Ind AS by the banks by one year.

RBI has reasoned that since the legislative amendments recommended by the RBI are under consideration of the government it has been decided to defer the implementation of Ind AS till further notice.

Indian Accounting Standards

Indian Accounting Standards (Ind AS) is a set of accounting norms developed by Indian authorities, which converge with the International Financial Reporting Standards (IFRS). Urban Cooperative Banks (UCBs) and Regional Rural Banks (RRBs) shall not be required to apply Ind AS and shall continue to comply with the existing Accounting Standards.

This delay in the implementation of Ind AS will give banks more time to prepare for the expected credit-loss model. Fitch Ratings estimated that India’s state-run lenders would have had to increase provisions by as much as 1.1 trillion rupees ($16 billion) in the fiscal first quarter ending June 30 if the rules had gone ahead. This huge capital requirement would have forced public sector lenders to raise substantial amounts of extra capital, beyond the estimated 1.9 trillion rupee infusion already committed by the government.

Month: Categories: Business, Economy & BankingUPSC

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