The Reserve Bank of India receives requests for information under the Right to Information Act, 2005.

Some information furnished by the Chief Public Information Officer in response requests, would be of interest to the members of the public. Such information is furnished in this Disclosure Log. Information pertaining to Commercial Banks RIA No Information Sought Guidelines issued by the Reserve Bank of India to prevent fraudulent use of ATMs. Can any bank, on its own, recover the loan amount by operating the savings account of a living depositor, without the express instructions of the depositor/without the orders of a Recovery Tribunal? The definitions/ criteria for classifying nonperforming assets (NPAs) as doubtful and loss assets as on 1.4.1994, and what are the subsequent amendments in this regard Ration Card as a document for proof of residence, for the purpose of opening of bank accounts. Reply given/ Information provided Date of Reply

1 RIA 406/0506 DBOD

The report on Information Systems Security Guidelines for the Banking March and Financial Sector headed by Dr. R. B. Barman dated March 11, 22, 2002, had indicated that to detect and prevent fraudulent use of ATMs, 2006 banks have to install video cameras at the site for capturing the images of all the users of the ATM. Copy of the report, which was sent to all the banks, is available on our website http://rbidocs.rbi.org.in/rdocs/publicationReport The account holder of NRE savings deposits can withdraw the savings April deposit at any time and therefore, banks should not mark any type of 13, lien, direct or indirect, against these deposits.(as regards domestic 2006 savings deposits, banks may follow the guidelines issued by IBA/existing practices approved by their Board in this regard).

2 RIA 411/0506 DBOD

3 RIA 420/0506 DBOD

Definitions/criteria for classifying NPAs as doubtful and loss assets as April on April 1, 1994 are furnished in our circular 5, no.DBOD.No.BC.129/21.04.043/92 dated April 27, 1992, and the 2006 subsequent modifications to these definitions are incorporated in our Master Circular on 'Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances' issued every year. The latest Master Circular containing the definition/criteria for classifying NPA as 'doubtful/ and 'loss asset' is DBOD.No.BP.BC.15/21.04.048/2006-07 dated July 1, 2006, which is available on our website www.rbi.org.in

4 RIA 434/0506 DBOD

As per RBI Circular DBOD.AML.58/14.01.001/ 2005-06 dated March November 29, 2004 (copy available on our website at 21, http://rbi.org.in/scripts/NotificationUser.aspx ration card is a valid 2006 document in support of residential address

Guidelines 5 These instructions are given in the Master Circular DBOD.BP.BC. 12 / April issued by RBI to 21.04.048 / 2005-06 dated July 2, 2005, which is available on our 26, RIA 477/05- declare an a/c website www.rbi.org.in under 'Notification' and the path is 2007

06 DBOD 6 RIA 483/0506 DBOD

non-performing. Circulars / Guidelines issued regarding issue of cheque books

http://rbidocs.rbi.org.in/rdocs/notification/PDFs/78400.pdf Two circulars were issued. DBOD.108/09.07.007/97-98 dated May September 25, 1997 and DBOD .LEG .BC . 74/ 09.07.005 / 03-04 dated 10, April 10, 2004. Also refer to our Circular 2006 DBOD.No.Leg.BC.87/c.466(IV)-89 dated March 3, 1989 wherein banks have been advised that they may issue cheque books with larger number of leaves(20-25) if a customer demands the same and also ensure that adequate stocks of such cheque books are maintained with all the branches to meet the requirements of the customers. The circular is available on our website Reserve Bank of India has issued Circular no DBOD.Leg.BC.95 dated May June 9, 2005 in this matter and is available on our website at 19, http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=2284&Mode=0. 2006 Banking Companies Nomination Rules, 1985 have been framed in terms of Sections 45ZA to 45ZF of the Banking Regulation Act, 1949.

7 RIA 614/0506 DBOD

What are the instructions /guidelines for nomination and settlement of claims of deceased depositors/locker hirers?.

8 RBI rules RBI has issued circular DBOD.FSD.BC.17/24.01.011/2007-08 dated June /guidelines on July 2, 2007 which is available on our website at http://rbi.org.in/ 9, RIA Notification 2006 693/05- Credit Cards 06 DBOD

RIA No 67/2007-08 DBOD

Information Sought Whether incidental charges for preparing Bank are not uniform for all banks. Are there any guidelines by RBI in this context?

Reply given / Information provided Banks have been given the freedom to fix service charges for banking transactions, which includes incidental charges for issue of bank drafts, with the approval of their Boards. While fixing service charges, they should ensure that the charges are reasonable and not out of line with the average cost of providing these services. In order to ensure transparency, banks are required to display and update on their websites the details of various service charges in a prescribed format. A Working Group constituted by the Reserve Bank to formulate a scheme for ensuring reasonableness of bank charges has in its recommendations identified "Demand Draft Issue " as one of the basic services for levying of service charges in a transparent manner. Based on the recommendations of the Working Group, RBI has issued necessary instructions to the banks vide circular DBOD.DIR.BC.No.56/ 13.03.00/ 2006-07 dated February 2, 2007 (available on our website at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/75608.pdf) on levying of charges for basic banking services. In terms of Master circular on credit card operations of banks dated July 2, 2007, (available on our website www.rbi.org.in at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/78385.pdf ), the overall procedure to be adopted has been advised to the banks. as under: a. Card issuers should ensure that there is no delay in dispatching bills and the customer has sufficient number of days (at least one fortnight) for making payment before the interest starts getting charged. b. Card issuers should quote annualized percentage rates (APR) on card products (separately for retail purchase and for cash advance, if different). The method of calculation of APR should be given with a couple of examples for better comprehension. The APR charged and the annual fee should be shown with equal prominence. The late payment charges, including the method of calculation of such charges and the number of days, should be prominently indicated. The manner in which the outstanding unpaid amount will be

Date of Reply Aug 13, 2007

231/06-07 DBOD

Credit Card Statements indicate a minimum Amount due, which is a percentage of the total outstanding due, the Due Date etc. However, when the credit card is suspended/closed, for what ever reason, the credit card customer receives monthly statements which shows the Total Amount due as the Minimum Amount Due. It also does not specify any Due Date for Payment. The Due Date is shown as IMMEDIATE. It has been observed that when the Banks representatives/agents contact the customer for payment, and the customer is not in a position to pay the entire amount in one go, they (the banks representatives) verbally specify an amount which they claim to

Sept 13, 2006.

44/2007-08 DBOD

be the Minimum Amount Due. included for calculation of interest should also be specifically Unfortunately, in the subsequent shown with prominence in all monthly statements. Even where the minimum amount indicated to keep the card valid statement it is noticed that a. Even if the verbally specified has been paid, it should be indicated in bold letters that the Minimum Amount Due is paid interest will be charged on the amount due after the due date of payment. and b. Even if the amount is paid soon after the Statement is These aspects may be shown in the Welcome Kit in addition A received, the Bank invariably to being shown in the monthly statement. levies interests and penalties legend/notice to the effect that " Making only the minimum such as LATE PAYMENT payment every month would result in the repayment stretching over -------- years with consequent interest FEE payment on your outstanding balance" should be Questions i. Is the above procedure in prominently displayed in all the monthly statements so as to conformity with Rules, Regulations caution the customers about the pitfalls in paying only the and is it a standard procedure? It not minimum amount due. what should be the correct procedure c. The banks /NBFCs should not levy any charge that was not in such cases? explicitly indicated to the credit card holder at the time of issue of the card and getting his / her consent. However, this ii. In such cases, as cited above, can would not be applicable to charges like service taxes, etc. the bank charge Late payment Fee? which may subsequently be levied by the Government or any other statutory authority. d. The terms and conditions for payment of credit card dues, including the minimum payment due, should be stipulated so as to ensure that there is no negative amortization. e. Changes in charges (other than interest) may be made only with prospective effect giving notice of at least one month. If a credit card holder desires to surrender his credit card on account of any change in credit card charges to his disadvantage, he may be permitted to do so without the bank levying any extra charge for such closure. What is the licensing policy of MNC RBI has issued a press release and notification on February 28, 2006 indicating a roadmap for presence of foreign Banks? banks. The same has been placed on RBI website www.rbi.org.in. RBI has also issued a Master Circular DBOD.No.BL.BC.16/22.01.001/2007-08 dated July 2, 2007 on the subject. The branch authorization policy for Indian Banks shall also be applicable to foreign banks subject to other conditions laid out in paragraph 19 of this Master Circular.

RIA 119/0708 DBOD

Whether justice can be sought in the matters of bank finance and where can a complaint be filed?

RIA 128/2007-08 DBOD

Standard rules for opening proprietorship firms account

of

To file a complaint in banking service rendered by banks, as per the Banking Ombudsman Scheme 2006, you may approach the Banking Ombudsman of your area. The list of Banking Ombudsman is available on our website www.rbi.org.in at the link http://www.rbi.org.in/commonman/English/Scripts/AgainstBa nkABO.aspx Banks have been advised to follow certain customer identification procedures for opening accounts of customers that are legal persons or entities such as corporates, companies, partnership firms, trusts etc., vide paragraph 3 of the Guidelines on Know Your Customer norms and Anti Money Laundering Measures of circular DBOD.No.AML.BC.58/14.01.001/2004-05 sated November 29, 2004 ( on the website at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/64686.pdf ).

Aug 23, 2007

Aug 10, 2007.

Operation instruction for instruction Either or Survivor What about instructions for payment of interest on renewal of FDRs after due date(after 15 days). What about rates for renewal of FDRs prescribed for as of date or after 15 days or more?

Such operational matters are decided by the banks themselves and therefore, you may refer to banks/Indian Banks Association in this regard. In terms of paragraph 2.13 of Reserve Bank of Indias Master circular on interest rates on Rupee Deposits DBOD.NO.DIR.BC.7/13.03. 00/2007-08 dated July 02, 2007 (which is available on our website), all aspects concerning renewal of overdue deposits may be decided by individual banks subject to their Boards laying down a transparent policy in this regard and the customers being notified of the terms and conditions of renewal including interest rates, at the time of acceptance of deposit. The policy should be nondiscretionary and non discriminatory.

RIA 372/0708 DBOD/ DBS

If a bank acquires an NPA from another bank, what are the reporting norms stipulated by the RBI for the Assignee Bank (i.e the acquiring bank). What are the RBI guidelines issued to Banks for declaring an Asset as NPA?

RBI has prescribed Disclosure Requirements for banks which purchase NPAs from other banks, vide paragraph 7 of Annexure to circular DBOD,BP.BC.16/21.04.048/2005-06 dated July 13, 2005 available at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/64686.pdf . RBI guidelines for classifying an asset as NPA is contained in our Master Circular on Prudential Norms on Income Recognitions, Asset Classification and Provisioning Pertaining to the Advances Portfolio issued vide our circular DBOD. No. BP.BO.12 /21.04.048 / 2007-08 dated July 2, 2007 available at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/78399.pdf The norms for sale/purchase of Non Performing Assets between banks are stipulated in our circular DBOD.No.BP./BC.16/21.04.148/2005-06 dated July 13, 2005 as amended vide our circular DBOD,No.BP.BC.97/21.04.148/2006-07 dated May 16, 2007 and DBOD.No.BP.BC.34/21.04.048/2007-08 dated October 4, 2007, available at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/64686.pdf , http://rbidocs.rbi.org.in/rdocs/notification/PDFs/77377.pdf and http://rbidocs.rbi.org.in/rdocs/notification/PDFs/80478.pdf respectively. You may please refer to paragraph 5(i) of the above circular dated July 13, 2005, regarding the valuation norms. You may please refer to paragraph 6 of the above circular dated July 13, 2005, regarding the valuation norms. You may please refer to paragraph 5 of the above circular regarding the valuation norms. The 'Guidelines on sale of financial assets toSecuritisation Company/ Reconstruction Company (created under Reconstruction of Financial Assets and Enforcement ofSecurity Interest Act, 2002) and related issues issued vide our circular DBOD, NO. BP.BC.96/21.04.048/2002-03 dated April 23, 2003 is available at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/35918.pdf.

SEP 18, 2007

What are the norms stipulated by the RBI for Assignee banks (i.e acquiring banks) qualified to buy and deal in NPAs? Is there any norm stipulated by the RBI when a public sector bank, like the State Bank of India, wants to sell its NPAs to a private sector bank?

What are the norms stipulated by the RBI for the valuation of NPAs when sold as a cluster/basket. What are the norms stipulated to the Assignee Bank (i.e the acquiring bank) of NPAs regarding the subsequent sale of NPAs and how should the profits be treated in their books. Does the RBI specifically stipulate any requirements and competencies of the NPA acquiring banks. Please provide a copy of such guidelines. All guidelines/instructions/ public notices issued by RBI from time to time regarding various aspects of

NPAs and treatment of NPAs after their assignment.

The norms for sale/purchase of non performing Assets between banks are stipulated in our circular, DBOD. No.BP.BC.16/21.04.048/2005-06 dated July 13, 2005, as amended vide our circular DBOD.NO.BP.BC.97/21.04.048/2006-07 dated May 16, 2007, and DBOD.No.BP.BC.34/21.04.048/2007-08 dated October 4, 2007, copies of which are available at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/64686.pdf and http://rbidocs.rbi.org.in/rdocs/notification/PDFs/80478.pdf and Master Circular on 'Prudential Norms on Income Recognitions, Asset Classification and Provisioning Pertaining to the Advances Portfolio issued vide our circular DBOD.No.BP.BO.12/21.04.048/2007-08 dated July 2, 2007 may be referred at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/78399.pdf

9 RIA 582/0506 DBS

Nature and method of processing done by the RBI to applications for empanelment of Auditors details of such applications. Details of aspects with reference whereof the processing was done.

The Institute of Chartered Accountants of India (ICAI) has been entrusted with the work relating to the preparation of the list of eligible auditors/ audit firms, based on the eligibility norms for empanelment of auditors/ audit firms for appointment as statutory branch auditors in PSBs. The eligibility / categorisation norms are: Cate- No. of gory CAs exclusively associated with the firm (Full time) (1) I. (2) 5 No. of Profe- Bank audit partners ssional experience exclusively staff associated with the firm (full time) (Out of 2) (3) 3 (4) 8 (5) Standing of the audit firm

(6)

Please give details of eligibility norms/ categorization norms and other norms, if any, which were applied to the applications for the purpose of selecting bank branch auditors and for the purpose of categorizing them.

The firm or 8 years at least one of the partners should have a minimum of 8 years experience of branch audit of a nationalised bank and / or of a private sector bank with deposits of not less than Rs.500 crore. The firm or atleast one of the partners should have preferably conducted branch audit of a nationalised bank or of a private sector bank with deposits 6 years (for the firm or atleast one partner)

II.

not less than Rs.500 crore for atleast 5 years III. 2 1 4 The firm or atleast one of the CAs should have preferably conducted branch audit of a nationalised bank or of a private sector bank with deposits not less than Rs.500 crore for atleast 3 years 5 years (for the firm or atleast one partner)

IV.

2 2 (The proprietary concerns of Chartered Accountants with 1 paid CA, 2 professional staff and not having any statutory branch audit experience of a nationalised bank or of a private sector bank with deposits not less than Rs.500 crore will be treated at par with the partnership firm after deducting their 3 years seniority from the date of their establishment).

3 years

Not necessary

PSBs are required to draw the branch audit programme for the statutory audit of the branches every year as per the prescribed procedure. After the exclusion of the firms which are to be denied audit during the relevant year, two lists, viz. continuing Part A and fresh allotment Part B of the firms are prepared as per the following procedure: 1. Branch auditors are generally appointed / continued for tenure of 5 years in a bank subject to their firm complying with the eligibility norms during the relevant years Effective from the year 2006-07 the tenure

for branch auditors has been made 4 years. 2. Branch auditors, after completion of their tenure in a bank as detailed above, are either placed under compulsory rest or rotated depending upon the place of their registration/ operation. 33 centres (listed in the Attachment 2) are currently identified as surplus centres where the number of eligible audit firms is more than the number of available vacancies for appointment of branch auditors in PSBs. Audit firms after completion of the tenure as branch auditors in these centres will be placed under compulsory rest for a period of two years. Audit firms from centres other than the above mentioned 33 centres will be rotated to other banks. 3. RBI only allots the eligible audit firms to banks depending upon the requirement of branch auditors based on the branch audit programme drawn up by the banks. The allotment of branches for statutory audit to the audit firms is done by the banks themselves. List of 33 centres being treated as rested districts for the pupose of appointment of branch auditors in public sector banks Sr.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Kolkata Ghaziabad Delhi Ludhiana Panipat Panchkula Gurgaon Sonipat Faridabad Chandigarh Jaipur Bhilwara Ajmer Bikaner Jodhpur Udaipur Kota Vadodara Name of the District

19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33.

Surat Ahmedabad Brihan Mumbai Thane Kolhapur Solapur Pune Nagpur Indore Raipur Hyderabad Bangalore Chennai Coimbatore Ernakulam

Information pertaining to Urban Co-operative Banks 1 RIA 453/0506 UBD 2 RIA 430/0506 UBD Norms for classifying borrowal accounts of Urban Co-operative Banks as NPAs? Norms for classification of borrowal accounts as April 21, NPAs is provided in our Master Circular 2006 UBD(PCB)Cir.No.1/09.140.00/05-06 dated July 4, 2005 on Income Recognition, Asset Classification and Provisioning, which is available on our website under the title Notifications RBI guidelines on merger/amalgamation of UCBs are available in our circulars No.UBD(PCB)Cir.36/09.169.00/2004-05 dated February 2, 2005, and Circular No. UBD(PCB)Cir.18/09.169.00/2005-06 dated November 22, 2005. These circulars are available on our website at http://rbi.org.in/scripts/NotificationUser.aspx April 12, 2006

RBI guidelines on merger/ amalgamation of urban co-operative banks (UCBs)?

3 RIA 455/0506 UBD/ DNBS

Whether a co-operative bank is registered under SARFAESI Act with Reserve Bank of India as a Securitisation Company and/or Securitisation Creditor? Whether such a bank can automatically become Securitisation Company/Creditor merely on it being registered as a banking company under Banking Regulation Act, 1949 with Reserve Bank of India? Whether such a bank is required to renew its Certificate every year as contemplated under SARFAESI Act? Whether the bank is required to approve a person to be appointed as Authorised Officer? Whether such a person is required to be registered as contemplated under SARFAESI Act? (i) The validity period of Co-operative Banks pay order? (ii) Whether co-op banks have the right to withdraw or deposit the

Co-operative Banks fall within the definition of April 21, secured creditor under SARFESI Act by virtue of 2006 the definition contained in section 2(1)(c )(v) of the Act in view of the notification No. S O.105(E) dated 28th January, 2003 of the Central Government declaring Co-operative Bank as defined in clause (cci) of section 5 of Banking Regulation Act, 1949 to be a bank for the purposes of SARFAESI. Section 13 of SARFAESI Act, 2002, authorizes the secured creditors to enforce any security interest created in favour of it by the borrower without the intervention of the Court or Tribunal in accordance with provisions of the Act. As a co-operative bank is not a Securitisation Company, the questions regarding renewal of certificate, appointment of Authorised Officer, application for registration, etc., would not be relevant. The query as to whether enforcement of security interest by a secured creditor is required to be registered with Central Registry is an issue relating to the interpretation of the provisions of the Act and it is not information covered under the Right to Information Act. Reserve Bank does not hold information regarding the exercise of powers by the said bank under section 13(4) of the Act. A reference is also drawn to Section 20 of the Act. Such Central Registry contemplated under the Act would not be a part of the Reserve Bank. It is also clarified that the Central Government has so far not issued any notification to set-up the Central Registry.

4 RIA 456/0506 UBD

(i) Banks pay order is basically a bankers cheque April 21, 2006 and hence valid for six months. (ii) Every bank frames saving bank rules. Deposits/withdrawals into the account (SB Account) are subject to these rules. Banks generally debit SB

amount in customer's account with cheque book charges, account saving account without maintenance charges, etc. his permission? 5 RIA 479/0506 UBD List of names of The information is available on the website at scheduled urban co-op www.rbi.org.in/scripts/sitemaps.aspx banks operating in Maharashtra state April 27, 2006

Information pertaining to Non-Banking Financial Institutions 1 RIA 433/05-06 DNBS Is it permissible for a non-banking financial company (NBFC) to carry on business without registering with the Reserve Bank of India? If not, and if a NBFC carries on such business, what action would be taken against such a company? What are the businesses that a company which is registered as a Residuary NonBanking Company (RNBC) with RBI can undertake? As per Section 45 IA of the Reserve Bank of India March Act, 1934, no NBFC shall commence or carry on 28, 2006 the business of non-banking financial institution (NBFI) without obtaining certificate of registration (CoR) from the Reserve Bank of India. Business activities to be carried on by such NBFCs are provided under Section 45 I(c) of the RBI Act, 1934. The Reserve Bank of India may take appropriate action against any person (NBFC) contravening the provisions of RBI Act, 1934 and the Directions issued there under. A company registered as a RNBC is defined as a April 25, non-banking institution, in terms of the Residuary 2006 Non-Banking Companies (Reserve Bank) Directions, 1987. RNBCs are companies which receive any deposit under any scheme or arrangement, by whatever name called, in one lumpsum of in installment by way of contributions or subscriptions or by sale of units or certificates or other instruments, or in any other manner and which, according to the definitions contained in the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998, or as the case may be, the Miscellaneous NonBanking Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1977, is not 1. 2. 3. 4. 5. 6. 7. 8. 9. 3 RIA 472, 473/200506 DNBS Does law permit a NBFC governed by RBI rules to disburse loan amt by cash/ through bearer cheque an equipment leasing company a hire purchase finance company a housing finance company an insurance company an investment company a loan company a mutual benefit company miscellaneous non-banking company, and a mutual benefit company.

2 RIA 461/05-06 DNBS

The mode of disbursal of loan amounts by NBFCs April 25, is not governed by RBI regulations. As regards the 2006 business practices of NBFCs, these are matters of contract between the NBFC and the borrower and therefore the loan transaction between the borrower and NBFC is regulated by the terms and conditions of the contract. Any grievances in this regard can be raised before the appropriate courts (both civil and criminal) including the local Consumer Forums, as you may deem fit. We may also add that no guidelines have been issued by Reserve Bank relating to vehicle financing by NBFCs.

Information pertaining to Foreign Exchange Department RIA No RIA 422/0506 FED 229/06-07 FED Information Sought RBI permission for carrying samples while proceeding on business promotion tours abroad. 1. Eligibility of borrower under Automatic Route of ECB for the purpose of importing capital goods (Fishing Vessels). 2. Whether terms with the lender (Foreign supplier of Equipment) related to debt servicing are in conformity with RBI guidelines. 3. Can any department or Ministry of Government of India other than RBI or Ministry of Finance set additional conditions in this matter? Has RBI delegated any authority to any other Ministry to interfere in this procedure or only RBI is the sole authority in this matter? Reply given / Information provided No permission or approval of the Reserve Bank of India is required for carrying samples as baggage, while traveling abroad. However, applicant may check with Customs Authorities regarding applicability of Customs Baggage Rules Eligibility of borrower is laid down in A.P. (DIR Series) Circular No.5 dated August 1, 2005 which is available on our website www.rbi.org.in at the link http://rbidocs.rbi.org.in/rdocs/notification/PDFs/650 65.pdf Terms of debt have to be in conformity with A.P. (DIR Series) Circular No.5 dated August 1, 2005. Date of Reply April 9, 2006

Sept 20, 2006.

External Commercial Borrowing (ECB) Policy is framed by Government of India in consultation with Reserve Bank of India. Government of India, Ministry of Finance has delegated authority to administer ECB Policy to Reserve Bank of India. ECB can be raised for end-uses specified in the policy. However, transactions like import are governed by the respective policies e.g. Foreign Trade Policy of the Directorate General of Foreign Trade. In other words, if further approval or permission is required from any other regulatory authority or Govt under the relevant laws/regulations, the applicant should take the necessary approval of the concerned agency before effecting the transaction.

378/07-08 FED

Whether any permission / approval / registration is required from RBI in case of royalty to a Foreign company by an Indian company in consideration of a Trade mark / Franchise Agreement ? If yes, what are the terms and conditions for the same? Whether there is any notification / regulation governing the payment of royalty to a Foreign Company by an Indian Company to acquire the trademark rights of the foreign company? Whether there is any restriction on the payment of royalty to the parent foreign companies and payment of royalty for use of TRADE MARK and brand name / Franchise rights without technology transfer under the automatic route of Reserve Bank of India?

Permission from Reserve Bank of India is not required.

Septem,ber21, 2007

The instructions/clarification on purchase of Trademarks for use in India/ payment of Royalty is given in terms of the AP Circular No 14 dated November 28, 2006 and item number 8 of Sch. II to FEM (CAT) Rules, 2000. AP (DIR Series) Circular No. 76 dated February 24, 2004 is placed on our website at the link http://rbidocs.rbi.org.in/rdocs/notification/PDFs/744 03.pdf and http://rbidocs.rbi.org.in/rdocs/notification/PDFs/515 21.pdf respectively. The revised guidelines are , the Indian Residents can purchase an immovable property outside India up to a ceiling limit of USD 2,00,000 per financial year under Liberalised Remittance Scheme (LRS). In terms of paragraph 4 of A.P.(Dir.Series) circular no.51 dated May 8, 2007, (available on our website at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/771 85.pdf) Authorised Dealers (Banks in India) are not allowed to extend any kind of credit facilities to Resident Individuals to facilitate remittances under the LRS. October 5, 2007

495/07-08 FED

RBI guidelines to Indian Residents for purchase of residential property abroad

RBI guidelines on whether Banks operating in India are allowed to give Housing loan for such transactions

Information pertaining to Rural Credit, Priority Sector Advances etc. 1 RIA 408/0506 RPCD The Reserve Bank of India's guidelines on One Time Settlement (OTS) to small and medium enterprises a) What is the maximum rate of interest on agricultural loans that can be charged by the financial institutions under RBI? Circular RPCD.PLNFS.No.39/06.02.31/2005-06 dated September April 3, 2005, which is available on our website at 4, http://rbi.org.in/scripts/NotificationUser.aspx contains the 2006 Reserve Bank of India's guidelines on OTS to SMEs

2 RIA 513/0506 RPCD

a) As per the interest rate policy of RBI, interest rates on loans May given by commercial banks have been deregulated, except that 3, the interest rate on loans up to Rs 2 lakh should not exceed the 2006 Benchmark Prime Lending Rate (BPLR) of the banks concerned. Commercial banks are, therefore, free to decide their lending rates on loans above Rs.2 lakhs, subject to the announcement of BPLR. Banks are also free to lend at sub-BPLR rates to creditworthy borrowers based on an objective and transparent policy, subject to the approval of their Boards. Banks decide their BPLR by taking into account, inter alia, their cost of funds, transaction cost and risk cost. As regards RRBs and Cooperative Banks, the interest rates on loans have been completely deregulated.

c) RBI vide circular dated RPCD.No.Plan.BC.92/ 04.09.01/ 2004c) As per the special relief 05 dated June 24, 2004.(Copy available on our website www.rbi.org.in under the title 'Notification') had advised all measures announced in the scheduled commercial banks to extend the relief measures. 2004 budget speech of the Hon. Central Finance Minister in respect of peasants affected by natural calamity, it is observed from the website that the loans of the farmers in the drought affected districts can be closed by repaying the balance outstanding in the principal as on 31.3.2001 and amount paid after 31.3.2001 should be deducted from the loan balance. Similarly, those who are not capable of repaying the loan should be given

moratorium for two years and the repaying period should be extended by next three years. Are the banks liable for extending the above relief measures to the deserving farmers? If so, it is d) Since moratorium implies postponement of payment of interest requested that a and/or repayment of principal/installments, Financial Institutions copy of the circular would not force the loanees for repayment. issued by RBI in this regard may kindly be forwarded. d) What is meant by the word moratorium as seen in the circular? Do the financial institutions have permission to force the loanees for repayment of the principal or interest during this moratorium period? e) Is there any One time Settlement Scheme in vogue in respect of defaulters of agricultural loans? If so, details of the same. 3 RIA 718/0506 RPCD

e) RBI vide circular RPCD.No.Plan.BC.92/ 04.09.01/ 2004-05 dated June 24,2004 had advised all scheduled commercial banks to implement an OTS Scheme for Small and Marginal Farmers. Moreover, RBI vide its circular RPCD.PLNFS.BC.No. 56/ 06.02.31/ 2005-06 dated December 27, 2005 had advised the scheduled commercial banks (including RRBs and Local Area Banks) to provide a simplified mechanism for one time settlement of loans where the principal amount is equal to or less than Rs.25,000/- and which have become doubtful and loss assets as on September 30, 2005. Copies of the above circulars are available on our website www.rbi.org.in under the title 'Notifications' at http://rbi.org.in/scripts/NotificationUser.aspx?Id=1724&Mode=0 and http://rbi.org.in/scripts/NotificationUser.aspx?Id=2667&Mode=0 respectively.

What are RBI A "New Education Loan Scheme" was formulated by IBA in June guidelines on consultation with the Govt of India and circulated by RBI to all 21, Education Loan scheduled commercial banks vide circular 2006 Scheme? RPCD.PLNFS.BC.83/06.12.05/2000-01 dated April 28, 2001 for implementation. The circular is available on our website www.rbi.org.in. The Scheme provides broad guidelines to the banks and implementing bank will have the discretion to make changes suiting to the convenience of students/parents etc.

Information pertaining to Currency management. RIA No RIA 133/200708 DCM Information Sought Are 25 paise and 50 paise coins withdrawn from circulation? Reply given / Information provided The 25 paise and 50 paise coins are legal tender and are not withdrawn from circulation. They may be validly used/ accepted for all transactions. RBI has issued press release to that effect and has also issued instructions to banks to display at all branches, boards/notices for information of customers/ general public to the effect that all 25 and 50 paise coins continue to be valid/legal tender and may be used for transactions in the normal course. Information on instructions given to banks on exchange of mutilated notes is available on our website www.rbi.org.in at the link http://rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=3671 Date of Reply Aug 22, 2007.

RIA 135/200708 DCM

RBI instructions to banks regarding exchange of mutilated notes.

Aug 27, 2007