24th Year of Publication

B anking
Registration RNI No.67802/98
Volume - XXIV No.04 : April 2021

Update
events

Contents of this Issue

• E-mandates for recurring transactions
• Payment gateways & aggregators
• FPI investment limits 2021-22
• Bilateral netting - Qualified contract
• FETERS
• NBFiD - National Bank for Infra Dev
• Co-lending by Banks / NBFCs

Multi-Option questions:8-9
Practical Ombudsman cases - 10
Data Bank : 10

Those who win, are those, who think they can

Corporate & Distribution Office

1008, Sector 45-B, Chandigarh
Phone 0172 2665 623
eMail - bankingupdate123 @ gmail.com

www.banking update
update.. com
bankingindiaupdate

Executive Editor - S. Chand Singh Editor in Chief - Sh. N S Toor

2 ♦ Banking events updatE ♦ April 2021

RBI and Govt. Policy Revised limit for HY Oct 2021-Mar 2022
6,07,039
Framework for processing of e-mandates for recurring b. The revised limits for FPI investment in
online transactions Central Government securities (G-secs) and
As per RBI circulars dated 21.8.19, 10.1.20 and 4.12.20, the State Development Loans (SDLs) for FY
framework for registering e-mandates for recurring online 2021-22 will be advised later. The current
transactions using cards / wallets / Unified Payments Interface limits is as under:
was put in place. The framework had ensured that changing Limits for G-Sec and SDL (Rs. crores)
payment needs of customers were accommodated by
adequately balancing safety, security and convenience of such G-Sec General 234531
transactions. Stakeholders were given sufficient time to G-Sec Long Term 103531
complete the process of migration to the framework by March SDL General 67630
31, 2021.
SDL Long Term 7100
RBI noted that the progress of onboarding existing as well as
new mandates of customers as per the framework is not Bilateral Netting of Qualified Financial
satisfactory. Keeping in view the requests of some stakeholders Contracts- Amendments to Prudential
and to prevent any inconvenience to customers, RBI decided Guidelines
on 31.3.21 as a one-time measure, to extend the timeline for The Bilateral Netting of Qualified Financial
ensuring full compliance to the framework till September 30, Contracts Act, 2020 was notified by the
2021. During the extended timeline, no new mandate for Government of India on October 1, 2020.
recurring online transactions shall be registered by stakeholders, The Act provides a legal framework for
unless such mandates are compliant with the framework. enforceability of bilateral netting of qualified
Guidelines on Regulation of Payment Aggregators and financial contracts (QFC).
Payment Gateways In exercise of the powers conferred by
As per RBI guidelines dated 17.3.20, authorised Payment section 4(a) of the Act, RBI, vide
Aggregators (PAs) and the merchants on-boarded by them, Notification dated March 9, 2021, has since
can not store customer card credentials within their database notified (a) “derivatives”; and (b) “repo” and
or server. “reverse repo” transactions as defined under
Section 45(U) of Chapter III-D of the
Based on the representations received from the industry seeking Reserve Bank of India Act, 1934 as a QFC.
additional time for implementing the above instructions, RBI Accordingly, instructions on Basel III capital
decided on 31.3.21, as a one-time measure, to extend the regulations, Basel III Framework on
timeline for non-bank PAs by six months, i.e., till December Liquidity standards – net stable funding ratio,
31, 2021, to enable the payment system providers and Prudential guidelines on NPA and Prudential
participants to put in place workable solutions, such as guidelines on capital adequacy, have been
tokenisation, within the framework. amended.
Investment by Foreign Portfolio Investors (FPI): The revised instructions come into force with
Investment limits for FY 2021-22 immediate effect.
a. The limits for FPI investment in Corporate bonds shall remain FETERS – Cards: Monthly Reporting
unchanged at 15% of outstanding stock of securities for FY
2021-22. Accordingly, the revised limits for FPI investment in Further to directions dated 11.2.16, on
corporate bonds, after rounding off, shall be as under: compilation of R-Returns for reporting under
the Foreign Exchange Transactions
Limits for Corporate bonds for FY 2021-22 (Rs. in crore) Electronic Reporting System (FETERS),
Current FPI limit 5,41,488 RBI on 25.3.21, decided to collect more
Revised limit for HY Apr 2021-Sep 2021 5,74,263 details of international transactions using

(COMPILATION- SAPANDEEP TOOR & MANJOT TOOR, - on the basis of information available on RBI Website)
 Banking events updatE ♦ April 2021 ♦ 3

Video Lessons
credit card / debit card / unified payment interface (UPI)
along with their economic classification (merchant
category code – MCC) through a new return called
‘FETERS-Cards’, using the same web-portal (https://
CAIIB-JAIIB-Promotion Exam
bop.rbi.org.in). B-Sheet Analysis
Nodal offices of Authorised Dealers (ADs) may submit Certified Credit Professionals
FETERS-Cards details on the web-portal in the following Foreign Exchange Operations
manner: • Use lap top / Smart Phone, as our class room
A. For transactions through credit card / debit card / UPI: • No travelling - no boarding/lodging charges
i. Sale of forex by AD towards international transaction • Learn as per your time and place convenience
made by Indian resident (to be reported by the card issuing • Watch any video any no. of times during validity
/ transaction originating AD); and
ii. Purchase of forex by AD under transaction by foreign

CORRESPONDENCE
resident with Indian resident (to be reported by merchant
acquirer AD).
B. The information shall be submitted in the following fixed
format: COURSE
a. For transactions using credit/debit card: MCC X Country
X Currency X Amount (Payment/Refund) X Card Status
PROMOTION EXAM
Based on latest trends of IBPS exam. A large no. of bankers
(Present /Not present) already succeeded by using the course material. If unable to
b.For transactions through UPI: MCC X Country X attend class room program, this is the best option.
Currency X Amount (Payment/Refund) X QR Code Scan Course Kit : The course kit include:
(a) subject-wise basic study material,
(Yes/No)
(b) assignment to improve retention
3. AD Banks need to report all card transactions (e.g., (c) objective type practice exercise
through PoS terminals / e-commerce (online purchase) / (d) recalled questions
for transferring funds to bank accounts). (e) mock test papers.
Fee : May differ from bank to bank. May be checked before
4. Data submission by ADs: remittance). Fee to be paid in advance.
How to enrol : Call us at the numbers given below.
i. ADs shall submit the FETERS-Cards data on the web-
portal (https://bop.rbi.org.in) by using the RBI-provided
login-name and password, within seven working days
from the last date of the month for which data are being
CAIIB/JAIIB
Course is based on exam pattern of IIB&F. A large no. of
reported. The web-portal provides detailed guidance and candidate have succeeded in all 3 papers in first attempt with
help material. our study material.
Course Kit : The course kit include:
ii. FETERS-Cards reporting will be implemented for the
(a) subject-wise basic study material,
transactions taking place from April 1, 2021. Hence, details (c) objective type practice exercise
of the transactions in April 2021 may be reported in the (d) mock test papers.
first week of May 2021. Fee : Fee differs for different papers. Fee payable in
advance, for which details may be obtained by calling
Large Exposures Framework – Deferment of 01722665623 .
applicability of limits on non-centrally cleared How to enrol : To enrol, advise name, address for
derivatives exposures correspondence, eMail id, mobile phone, bank name, subjects
for enrolment.
Further to circular dated 23.3.20 on Large Exposures
Framework, RBI decided on 23.3.21 that non-centrally DS Institute of Banking
cleared derivatives exposures will continue to be outside
Office:SCO No.32, Sector 33-D, Chandigarh 160 020
the purview of exposure limits till September 30, 2021.
• Phone: 0172-2665623, 09988221167
4 ♦ Banking events updatE ♦ April 2021

National Bank for Financing Infrastructure and

Development (NBFiD) Act 2021 N S Toor App
The Ministry of Law and Justice, notified the Act on 28th March, 2021,
which extends to the whole of India. Products
available
Establishment and incorporation of Institution:
NBFiD shall be established as a development financial institution, with
Head Office in Mumbai. It may establish offices, branches or agencies
at any place within or outside India.
Purposes and objectives of Institution.
Video Lessons
(1) The developmental objective of NBFiD shall be to co-ordinate with
relevant stakeholders, in India or outside India, to facilitate building and PDF Text
improving the relevant institutions to support the development of long Video lessons for-
term non-recourse infrastructure financing in India including the domestic
bonds and derivatives markets. · CAIIB - Advanced Bank
Management
(2) The financial objective of NBFiD shall be to lend or invest, directly
or indirectly, and seek to attract investment from private sector investors · CAIIB- Bank Financial
and institutional investors, in infrastructure projects located in India, or Management
partly in India and partly outside India, with a view to foster sustainable
· JAIIB - Principles and
economic development in India.
Practice of Banking
Authorised share capital.
(1) Rs.100,000 cr as fully paid-up shares of ten rupees each: · JAIIB - Accounting & Finance
(2) Shares may be held by Central Govt., multilateral institutions, sovereign for Bankers
wealth funds, pension funds, insurers, FIs, banks, and any such institution; · JAIIB - Legal & Reg aspects
Central Govt. shall hold at least 26% of shares of NBFiD at all times. of Banking
Board of Directors and Management · Bank Promotion Exam -
(1) The Board of NBFiD shall consist a Chairperson, to be appointed by General Banking
the Central Govt., a Managing Director; max 3 Deputy Managing
Directors, 2 directors nominated by the Central Govt. and max 3 directors · Certified Credit Professionals
elected by shareholders. · Balance-sheet Analysis
(2) The Managing Director and Deputy Managing Directors shall be
· Foreign Exchange Operations
whole-time directors of the Board.
Term of office and other terms and conditions of service of Facility to watch the videos,
Chairperson and other directors of Board. on-line and off-line available.
(1) Chairperson, Managing Director (MD), Deputy Managing Directors You can download videos to
(DMDs) and other directors other than the directors nominated by Central watch off-line, during validity
Government, shall hold office for a term of max 5 years, and shall be period of a course.
eligible for re-appointment subject to an overall term of max 10 years:
To download the App go to
Provided that MD and DMDs shall not hold office as such, after they
Google Play Store and
have attained the age of 65 years and 62 years, respectively.
download NS Toor App. After
Committees of Board : Board shall constitute a Nomination and
installation, go to Store
Remuneration Committee, a Risk Management Committee and an Audit
Section to subscribe the
Committee, each consisting of a minimum of 3 directors.
course.
Functions and powers of Institution.
(i) form subsidiaries or joint ventures or branches, in India or outside
India, for carrying out its functions;
I

Banking events updatE ♦ April 2021 ♦ 5

(ii) co-ordinate operations of various institutions on the security of its own bonds or debentures.
engaged in the field of infrastructure finance; (2) NBFiD shall not make loans or advances to any
(iii) support development of a deep & liquid market for person or body of persons of which any of the directors
bonds, loans & derivatives for infrastructure financing of NBFiD is a proprietor, partner, director, employee
(iv) lend and invest in infrastructure projects located in or guarantor, or in which one or more directors of the
India, or partly in India and partly outside India; NBFiD hold substantial interest.
(v) extend loans and advances for providing financial Performance review of Institution.
assistance for infrastructure projects located in India, (1) The performance of NBFiD shall, once in every
or partly in India and partly outside India; five years, be reviewed by an external agency to be
(vi) subscribe to or purchase, underwrite, acquire, hold appointed by the Central Government.
or sell stocks, shares, bonds, debenture stocks, debt (2) The external agency shall review the performance
securities, obligations and securities, commercial for the last five years with respect to the purpose and
papers, certificates of deposit or debentures issued or objectives of the Institution and shall take into account
guaranteed by any company or trust or registered such key performance indicators as may be prescribed.
society or co-operative society or association or the Govt. grants, guarantees & other concessions
Central/State Govt. or any FI funding infrastructure,
21. Central Govt. may support NBFiD through grants
to facilitate financing of infrastructure projects;
or contribution;
(vi) borrow or raise money by way of loans or otherwise
22. Govt. shall prescribe a concessional rate of fees,
both in rupees and foreign currencies;
(max 0.1%) at which Govt. guarantee may be extended
(vii) borrow money from the Central Government, to NBFiD for borrowings from multilateral institutions,
scheduled banks, financial institutions, mutual funds; sovereign wealth funds, and other foreign institutions.
(viii) receive grants, aids, subsidies, funds or donations, ACCOUNTS, AUDIT AND REPORT
etc., from national and international sources;
(1) The Institution shall establish a reserve fund to
(ix) issue guarantee, letters of comfort, or letters of which it will transfer min 20% of the annual profits;
credit for loans or credit arrangements made;
(2) It may pay dividend out of its net profit, after making
(x) borrow money from RBI repayable on demand or provisions for bad and doubtful debts and depreciation.
fixed periods not up to 90 days;
(3) The balance-sheet and accounts shall be prepared
(xi) borrow money from RBI against bills of exchange as on the 31st day of March each year.
or promissory notes arising out of bona fide commercial
(4) It shall furnish to Central Govt. and RBI within 4
or trade transactions maturing within five years;
months a copy of its balance-sheet and accounts
(xii) convert debt extended to a borrower into equity together with a copy of the auditor’s report.
Guarantee by Central Government : Govt. may, on MISCELLANEOUS
a request being made by NBFiD, guarantee the bonds,
(1) Any person who intends to set up a development
debentures and loans issued by NBFiD for repayment
financial institution, in addition to the Institution
of principal and the payment of interest at such rate.
established under this Act, shall make an application to
Prohibited business. the Reserve Bank for licence.
(1) The Institution shall not make any loan or advance
Most-used book Banking Problems Practice Sets For Banking infor- For all types of
OUR by bankers 50th & Rationales 8th Mock Tests 20th mation in Hindi bank interviews
(2021) Edn Rs.500 (2017) Edn Rs400 Edn Rs.275 11th Edn Rs.275 13th Edn Rs.300
WIDELY
READ
BANKING
PROMOTION
BOOKS
6 ♦ Banking events updatE ♦ April 2021

Co-lending by Banks & NBFCs to by the NBFC in their books or retain the
Priority Sector discretion to reject certain loans subject to its
RBI had initially implemented guidelines on co-origination of loans due diligence.
by banks and NBFCs for lending to priority sector on 21.9.18. a. If the Agreement entails a prior, irrevocable
On Nov 05, 2020, RBI updated the guidelines. The arrangement commitment on the part of the bank to take
entails joint contribution of credit at the facility level by both the into its books its share of the individual loans
lenders as also sharing of risks and rewards. as originated by the NBFC, the arrangement
RBI decided to provide greater operational flexibility to the lending must comply with the extant guidelines on
institutions, while requiring them to conform to the regulatory Managing Risks and Code of Conduct in
guidelines on outsourcing, KYC, etc. The primary focus of the Outsourcing of Financial Services by Banks
revised scheme, rechristened as “Co-Lending Model” (CLM), (March 11, 2015). In particular, the partner
is to improve the flow of credit to the unserved and underserved bank and NBFC shall have to put in place
sector of the economy and make available funds to the ultimate suitable mechanisms for ex-ante due diligence
beneficiary at an affordable cost, considering the lower cost of by the bank as the credit sanction process
funds from banks and greater reach of the NBFCs. Detailed cannot be outsourced under the extant
features are furnished in the Annex. guidelines.
1. In terms of the CLM, banks can co-lend with all registered b. The bank shall also be required to comply
NBFCs (including HFCs) based on a prior agreement. The co- with the Know Your Customer (KYC)
lending banks will take their share of the individual loans on a Direction, 2016, which already permit
back-to-back basis in their books. NBFCs shall be required to regulated entities, at their option, to rely on
retain a minimum of 20% share of individual loans on their books. customer due diligence done by a third party,
subject to specified conditions.
2. The banks and NBFCs shall formulate Board approved policies
for entering into the CLM and place the approved policies on c. However, if the bank can exercise its
their websites. Based on their Board approved policies, a Master discretion regarding taking into its books the
Agreement may be entered into between the two partner loans originated by NBFC as per the
institutions which shall inter-alia include, terms and conditions of Agreement, the arrangement will be akin to a
the arrangement, the criteria for selection of partner institutions, direct assignment transaction. Accordingly,
the specific product lines and areas of operation, along with the taking over bank shall ensure compliance
provisions related to segregation of responsibilities as well as with all the requirements in terms of Guidelines
customer interface and protection issues, as detailed in the Annex. on Transactions Involving Transfer of Assets
through Direct Assignment of Cash Flows and
3. The Master Agreement may provide for the banks to either the Underlying Securities (dated 7.5.12 and
mandatorily take their share of the individual loans originated by 21.8.12), with the exception of Minimum
the NBFCs in their books as per the terms of the agreement, or Holding Period which shall not be applicable
to retain the discretion to reject certain loans after their due in such transactions undertaken as per CLM.
diligence prior to taking in their books, subject to the conditions
specified in the Annex. d. Minimum holding period exemption shall
be available in cases where prior agreement
4. The banks can claim priority sector status in respect of their between banks and NBFCs has a back-to-
share of credit while engaging in the CLM adhering to the back basis clause and complies with all other
specified conditions. conditions in guidelines for direct assignment.
5. The CLM shall not be applicable to foreign banks (including 2. Banks shall not be allowed to enter into
WOS) with less than 20 branches. co-lending arrangement with an NBFC
Annexture - Essential Features of Co-Lending Model belonging to the promoter Group.
between Banks and NBFCs 3. The NBFC shall be the single point of
1. The Master Agreement entered into by the banks and NBFCs interface for the customers and shall enter
for implementing the CLM may provide either for the bank to into a loan agreement with the borrower,
mandatorily take their share of the individual loans as originated which shall clearly contain the features of the
 Banking events updatE ♦ April 2021 ♦ 7

arrangement and the roles and responsibilities of NBFCs and banks. statutory audit within banks and NBFCs
4. All the details of the arrangement shall be disclosed to the to ensure adherence to their respective
customers upfront and their explicit consent shall be taken. internal guidelines, terms of the agreement
and extant regulatory requirements.
5. The ultimate borrower may be charged an all-inclusive interest
rate as may be agreed upon by both the lenders conforming to the 15. Any assignment of a loan by a co-lender
extant guidelines applicable to both. to a third party can be done only with the
consent of the other lender.
6. The extant guidelines on customer service and fair practices
code and obligations of banks and NBFCs therein shall be applicable 16. Both the banks and the NBFCs shall
mutatis mutandis in respect of loans given under the arrangement. implement a business continuity plan to
ensure uninterrupted service to their
7. The NBFC should be able to generate a single unified statement
borrowers till repayment of the loans under
of the customer, through appropriate information sharing
the co-lending agreement, in the event of
arrangements with the bank.
termination of co-lending arrangement
8. With regard to grievance redressal, suitable arrangement must between the co-lenders.
be put in place by the co-lenders to resolve any complaint registered
by a borrower with the NBFC within 30 days, failing which the Extension of Cheque Truncation System
borrower would have the option to escalate the same with the (CTS) across all bank branches in India
concerned Banking Ombudsman/Ombudsman for NBFCs or the As per circular dated 5.2.2021, RBI had
Customer Education and Protection Cell (CEPC) in RBI. announced pan-India coverage of CTS by bringing
all branches of banks in the country under image-
9. The co-lending banks and NBFCs shall maintain each individual based CTS clearing mechanism.
borrower’s account for their respective exposures. However, all The CTS is in use since 2010 and presently covers
transactions (disbursements/ repayments) between the banks and around 1,50,000 branches. All the erstwhile 1219
NBFCs relating to CLM shall be routed through an escrow account non-CTS clearing houses (ECCS centres) have
been migrated to CTS effective September 2020.
maintained with the banks, in order to avoid inter-mingling of funds. RBI observed that there are branches of banks
The Master Agreement shall clearly specify the manner of that are outside any formal clearing arrangement
appropriation between the co-lenders. and their customers face hardships due to longer
time taken and cost involved in collection of
10. The Master Agreement may contain necessary clauses on cheques presented by them.
representations and warranties which the originating NBFC shall To leverage the availability of CTS and provide
be liable for in respect of the share of the loans taken into its books uniform customer experience irrespective of
by the bank. location of her/his bank branch, RBI decided to
extend CTS across all bank branches in the country.
11. The co-lenders shall establish a framework for monitoring and To facilitate this, banks are to ensure that all their
recovery of the loan, as mutually agreed upon. branches participate in image-based CTS under
respective grids by Sept 30, 2021. They are free
12. The co-lenders shall arrange for creation of security and charge to adopt a model of their choice, like deploying
as per mutually agreeable terms. suitable infrastructure in every branch or following
a hub & spoke model, etc. and concerned banks
13. Each lender shall adhere to the asset classification and
shall coordinate with the respective Regional
provisioning requirement, as per the respective regulatory guidelines Offices of RBI to operationalise this.
applicable to them including reporting to Credit Information Banks are to RBI, the roadmap to achieve pan-
Companies, for its share of the loan account. India coverage of CTS and submit a status report
before April 30, 2021.
14. The loans under CLM shall be included in the scope of internal/
Bank Fin Mgmt Accounting & Legal Aspects of Principles of
Adv Bank Mgmt Banking/General
Finance 16th Edn Banking 16th Edn Banking 16th Edn
10th Edn Rs.275 10th Edn Rs.225 Awareness
JAIIB BOOKS
OUR CAIIB &

Rs.250 Rs.250 Rs.300

Banking events updatE ♦ April 2021 ♦ 8

Multi-option Questions OUR USEFUL BOOKS

01 What is the minimum maturity period of a commercial paper ? FOR BANKERS
a 7 days b 15 days
c 29 days d 45 days Hanbdook of Banking Infor- Rs.500
mation - 2018, 50th Edi-
e 60 days
tion by N S Toor
02 In order to ensure that a coloured photo copy or scanned coloured
image of the cheque is not used, which of the following features is Bank Credit Management Rs.300
included in the cheque under CTS 2010 standards? (2017) edition by N S Toor

a ultra-violet ink b intaglio Banking Problems /

Rs.400
c void pantograph d UV enabled scanning Rationals and Situation
Analysis (2017) N S Toor &
03 While renewing the working capital limits of a partnership firm, the
Arundeep Toor
loan officer observes that the long terms uses are 25% more than
the long terms sources during the previous year. This will lead to: Model Test Papers for Bank
Promotion (2020) N S Toor Rs.275
a improvement in the debt equity ratio
b deterioration in debt equity ratio Analysis of Balance Sheet Rs.250
(2019) N S Toor
c deterioration in current ratio
d improvement in current ratio How to Face Bank Inter-
views? (2018) N S Toor Rs.300
e improvement in debt service coverage ratio
04 If the current assets are 36 and net working capital is 12, what is Bhartiya Banking (Hindi) Rs.475
the current ratio: (2017) N S Toor

a 1.17:1 b 1.25:1 Model Papers in Hindi N S Rs.150

c 1.33:1 d 1.50:1 Toor

05 Which of the following instruments represents a share in Indian Banking Rationals and Prob-
Rs.125
company in India and traded in America/Europe? lems (Hindi) N S Toor
a GDR/ADR b IDR/ADR JAIIB Objective Type
c GDR/IDR d Zero Coupon Bonds (all books by N S Toor and
Arundeep Toor):
e Debentures
• Principles of Banking Rs.300
06 As per Income–tax (22nd Amendment) Rules, 2015 (Rule 114B),
• Accounting and Finance Rs.250
w.e.f. 1.1.2016, quoting of permanent account number (PAN) is
for bankers
mandatory for depositing cash _____ with a bank, on any one day:
• Legal Aspects of Banking Rs.250
a above Rs.10000 b above Rs.20000
CAIIB Objective Type
c above Rs.25000 d above Rs.50000
(all books by N S Toor and
07 Which of the following return related to non-resident deposit Arundeep Toor):
accounts, is to be submitted to RBI from March 31, 2015 onwards
• Adv Bank Management Rs.225
to:
• Bank Fin Management. Rs.275
a Stat-5 b Stat-8
c NRD-CSR d none the above IBPS Bank PO/ClerK
• Study Kits Rs.3000
08 Operating profits in bank’s profit and loss account refer to:
• Banking & Financial GK Rs.400
a net profits Rs.1500
• E-Books
b profits before contingencies • E-Learning through Video Rs.3000
c profits before provisions and contingencies - DVDs covering reasoning
d profits after provisions and contingencies ability, quantitative aptitude,
English language, computers
09 One of the female staff members of workman staff had a miscarriage
awareness, Banking & gen-
and has applied for a 6-month maternity leave. What would be done?
eral awareness
a No leave permissible for miscarriage. Hence request would be rejected.
To order these books, please call
b Leave would be sanctioned after verification of the fact. 0172-2665623 (10 am to 6 pm) on
c Sanction the leave after getting it approved from Head Office any working day. OR
d Allow 6 weeks’ leave and for the balance period, ordinary leave Call Skylark Publications, New Delhi
account would be debited (Ph 011 23361966)
 Banking events updatE ♦ April 2021 ♦9
10 The garnishee order is not applicable to: c Pay FD rate for the relevant period interest rate
a Amount lying in foreign accounts of the judgement d a or c whichever lower
debtor 15 The clearing house managing banks extending
b Articles of judgement debtor lying in the safe clearing related overdraft to member banks can
custody charge rate of interest on such overdraft which is
c contents of the locker related to which of the following?
d a to c only a bank rate
e: a and b only b BPLR of the bank concerned
11 For a dishonoured cheque, the punishment c Base of the bank concerned
provided under Section 138 of the Negotiable d LAF Repo Rate
Instruments Act to the drawer is in respect of the 16 As per extant guidelines, which among the
following: following can sign the notice for possession under
a the cheque has been delivered as a gift by the SARFAESI Act 2002, on behalf of the bank?
drawer a Any official of the bank
b the cheque has been issued but the signatures do b Any officer of the bank
not tally
c Any manager of the bank
c the cheque has been presented with in the period
d Any Law Officer of the bank
stipulated by the drawer in the cheque
e An officer in Scale IV or above or approved by the
d the cheque has been dishonoured due to
Board of the Bank
insufficiency of balance
17 As per RBI guidelines, the banks should impose
e c and d above
‘partial freezing’ on KYC non-compliant accounts in
12 Awards of Ombudsman that are not implemented a phased manner. Partial freezing during the first 6
by the bank for ___ are required to be placed by a months period, includes:
bank before ____ for examining the reasons for
a transactions at the discretion of the bank
non-implementation and initiating necessary
remedial action : b only credits to be permitted
a three months, CMD c only debits to be permitted
b three months, Customer Service Committee of d no debit and no credit to be permitted
Board 18 Aggrieved party on the award of Ombudsman, can
c 2 months, Customer Service Committee of Board make application for review to appellate authority
____ within 30 days of the date of receipt of
d 6 months, Board of Directors
award
13 Hari had a saving bank account and a cheque issued
a Governor RBI b Dy. Governor RBI
by him is presented in clearing. Meanwhile a
garnishee order is received. If the cheque is to be c Chairman IBA d Judge of Distt. Court
returned, what should be the reason: 19 In case of crop loss, under Relief Measure, for all
a exceeds arrangement as garnishee order received restructuring cases, the moratorium period should
be minimum ___:
b exceeds arrangement
a 3 months b 6 months
c garnishee order received, refer to drawer
c 12 months d 24 months
d payment cannot be allowed.
20 A firm dealing with your bank wants to raise a pre-
e a or b
shipment credit of Rs.50 lac. On which of the
14 A has a current account with the bank and expires. following basis, the pre-shipment finance would be
The claim is set-tled in favour of his heirs after six computed by the bank:
months. The legal heirs also claim interest. What
a C & F basis
would you do:
b FOR basis
a Pay interest at SB interest rate
c CIF basis
b Will not pay any interest, as the balance was in
current account. d FOB basis
e any of the above, whichever is lower
Disclaimer : We have taken every care to provide information, we
believe to be accurate and reliable and do not assume responsibility of any ANSWERS
kind nor shall be liable for losses & consequence arising from use thereof.
Since this information is based on the published reports mostly, correct- 01-A 02-C 03-C 04-D 05-A 06-D 07-C 08-C 09-D 10-D
ness or otherwise thereof may be verified by the user with the original 11-D 12-B 13-C 14-A 15-D 16-E 17-B 18-B 19-C 20-D
sources, in advance. ..................................... Editor
10 ♦ Banking
Banking events ♦
events updatE updatE April
April ♦2021 ♦ 2021
10 Registration RNI No. 67802/98 Postal Regn No.CHD /0001/2015-17
Practical Problems based on Ombudsman Decisions DATA COLUMN
1) The Managing Trustee of a Trust complained that his bank had allowed
Business of Banks
fraudulent transactions to the tune of Rs. 20.00 lakh through net banking, (Rs.in cr) 10.04.20 26.03.21
even though this facility was not opted for. Aggregate deposits 13714927 15113178
Cash in hand/RBI 486791 633445
The bank submitted that the complainant had agreed for the “Net Banking Investments 3925665 4462521
activation” option in the Account Opening Form and the same was activated Bank Credit: 10339299 109515561
-Food 54073 61254
only after confirmation calls were made to the mobile number provided in -Non-Food 10295226 10890307
the application form. Further, the trust account was opened in compliance Cash-Deposit Ratio 5.27 3.83
Investment-Deposit 28.14 30.23
with KYC norms and account opening form was duly signed by the trustees. Credit-Deposit 72.95 71.74
The bank stated that all the disputed transactions were carried out in the Money Stock
(Rs.in cr) 31.03.20 26.03.21
normal course of business and were duly authenticated by the complainant M3 (Out of which) 16799930 18772693
through confidential card details. Besides, SMS alerts were also for all (a) Currency with public 2349715 2757750
(b) Demand deposits-Banks 1737692 1984256
disputed transactions to the mobile number provided by the complainant, (c) Time Deposits - Banks 12674016 13983341
e-mail alerts were also sent at e-mail address provided in application form. (d) Other deposits with RBI 38507 47347
Sources of Money Supply
Perusal of the copy of Account Opening Form confirmed the fact that the (a) Net Bank credit to Govt 4906583 5692564
complainant had opted for Net Banking facility. However, the mobile (b) Bank credit to Comrcl sectr 11038644 11612099
number mentioned in the Account Opening Form of both the trustees (c) Net Important Forex assets of Banks 3798902
Banking Indicators
4511386

was that of their Finance Manager who had made the fraudulent Statutory Liquidity Ratio 18.00% (10.04.2020)
withdrawals and that there was some cancellation in the mobile number Cash Reserve Ratio
Overnight LAF (of NDTL)
03.00% (28.03.2020)
0.25%
column. The e-mail id mentioned was different from the official e-mail id 14days term Repo(of NDTL) 0.75%
Reverse Repo Rate 03.35% (22.05.2020)
of the Trust. The complainant denied bank’s submission about confirmation Repo Rate 04.00% (22.05.2020)
calls and e-mail alerts. The complainant also stated that the mobile number MSF Rate 04.25% (22.05.2020)
and e-mail id mentioned in application form were not correct. It was Bank Rate 04.25% (22.05.2020)
Small Savings Interest Rates
established that PIN for Net Banking was delivered to a 3rd party, not P P F 7.1% (01.04.2020)
authorized to receive it. The bank had also failed to monitor the operations 5-year NSC 6.8% (01.04.2020)
Sukanya Smridhi 7.6% (01.04.2020)
in account as the disputed transactions were not in line with the activities Senior Citizen Saving 7.4% (01.04.2020)
mentioned in the trust deed. Capital & Money Market Indicators
Parameter end-Apr20 end-Apr21
On the complainant’s side, the main reason for the fraud was that the Dollar-spot TT (Rs.) 70.93 75.09
entire financial operations of the trust were carried out by the Finance BSE - Sensex (points) 31863 47822
NSE - Nifty(S&P CNX) 9313 14347
Manager, without proper checks and balances. Further, the complaint Foreign reserves (Million $) 479568 581213
was raised after a considerable lapse of time. Gold /Oz in USD) 1834 1723

In view of the above, the BO ordered that the loss may be shared between
the bank and the complainant in the ratio of 75: 25.
INDIAN ECONOMY-IMPORTANT PARAMETERS
Growth estimate for FY 2021-22 : 11-11.5%
2) The complainant alleged that her SB Account was fraudulently debited GDP@constant mkt prices (cr) 2018-19 : 20442233
to the tune of Rs.7 lakh for various transactions and SMS alerts in respect GVA@2011-12 basic prices (cr) 2018-19 : 12906936
of the disputed transactions were not received. She also stated that she GDP projected by Govt. for 2021-22 : 22287379
had not registered for net banking. Fiscal Deficit Target (2021-22) 6.8% of GDP :1506812 cr

It was observed that the transactions were done online. The bank Revenue Deficit Target (2021-22) 5.1.% of GDP :1140576 cr
Wholesale Price Index : 7.1%
submitted that there were 209 fraudulent transactions to the tune of Exports during 2019-20 (Goods+services) : 528.5 bn
Rs.5,19,100/- of which four transactions of Rs.2500/- each had been Imports during 2019-20 (Goods+services) : 598.6 Bn
refunded. The bank had not clarified the basis of their decision to refund India's share in world merchandise export : 1.70%
four transactions. The bank had not been able to provide the original India's currency rating (S&P) : BB Postv
India's external debt (Jun 2020) US $ : 554.5 Bn
application / online log of the complainant for usage of internet banking.
Tax-GDP ratio (2019-20) : 9.9%
Although the bank said that it had sent SMS alerts for all the debit Apr20- Feb21:Export $ 439.6 bn Imports : 447.4 bn
transactions, the complainant alleged that it was not her registered mobile Per capita GDP 2019-20 (Rs.) : 108620
number. Further, the bank had not taken any note of repetitive transactions Indian economy's ranking in PPP terms : 3rd
which prima facie looked suspicious and should have alerted the customer. Indian economy's ranking in world in value: 7th
The bank had also failed to submit the necessary electronic log and report
relating to the disputed transactions. Due to above deficiencies, BO advised OUR PUBLICATIONS : REFER PAGE 9,11
the bank to pay the entire disputed amount to the complainant. • DATE OF DESPATCH - April 7/ 10, 2021
Published by Chand Singh at 1008, Sector 45-B, Chandigarh - Printed by Chand Singh in digital form. Editor - Chand Singh