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Premature redemption under Sovereign Gold Bond (SGB) Scheme

Excerpts:
  • SGB 2018-19, Series VI - Issue date February 12, 2019
  • The next due date of premature redemption of the above tranche shall be February 12, 2024
  • The redemption price for premature redemption shall be Rs6,263.
    It is to be noted that the Issue Price of the Bond was Rs.3,276 for online investers and Rs 3326 for others.
    Investers will get a return of Rs 2987 -nearly 48% return over five years apart from 2.5% interest on the investment made.

  • Read here RBI press release.

  • February 09, 2024.

    RBI Monetary Policy Statement, 2023-24 Dated 08.02.2024.

    Excerpts:
    RBI Keeps the policy Repo Rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent
    The Standing Deposit Facility (SDF) rate remains unchanged at 6.25 per cent
  • Marginal Standing Facility (MSF) rate and the Bank Rate at 6.75 per cent.

    Read here the detailed statement.

  • Know all about
  • Repo Rate,
  • Reverse Repo Rate,
  • Bank Rate,
  • Cash Reserve Ratio,
  • Standing Liquidity Ratio etc

  • February 01, 2024.

    HIGHLIGHTS OF THE INTERIM UNION BUDGET 2024-25

    Direct taxes
    FM proposes to retain same tax rates for direct taxes

    Direct tax collection tripled, return filers increased to 2.4 times, in the last 10 years
    Government to improve tax payer services
    Outstanding direct tax demands upto Rs 25000 pertaining to the period upto FY 2009-10 withdrawn
    Outstanding direct tax demands upto Rs 10000 for financial years 2010-11 to 2014-15 withdrawn
    This will benefit one crore tax payers
    Tax benefits to Start-Ups, investments made by Sovereign wealth funds or pension funds extended to 31.03.2025
    Tax exemption on certain income of IFSC units extended by a year to 31.03.2025 from 31.03.2024

    Indirect taxes


    FM proposes to retain same tax rates for indirect taxes and import duties
    GST unified the highly fragmented indirect tax regime in India
    Average monthly gross GST collection doubled to Rs 1.66 lakh crore this year
    GST tax base has doubled
    No tax liability for income upto Rs 7 lakh, up from Rs 2.2 lakh in FY 2013-14
    taxation threshold for retail businesses increased to Rs 3 crore from Rs 2 crore
    Presumptive taxation threshold for professionals increased to Rs 75 lakh from Rs 50 lakh

    Corporate income tax decreased to 22% from 30% for existing domestic companies
    Corporate income tax rate at 15% for new manufacturing companies

    Read more

    Also you may be interested to read "Finance Bill 2024".

    January 25, 2024.

    The current financial year 2023-24 is fast approaching its closure. All salaried tax payers may be interested to know the eligible deductions from their salary to reducce their tax liabilty. You may follow the following link to get some idea on your eligibility.

    Deductions allowable from salary for FY 2023-24.

    Various Threshold Limits under the Income Tax Act-
    FY 2022-23.
    Read more


    January 21, 2024.
    EXPLANATORY CIRCULAR CIRCULAR EXPLAINING THE PROVISIONS OF THE FINANCE ACT, 2023. AMENDMENTS OF THE INCOME-TAX ACT, 1961 CARRIED OUT THROUGH FINANCE ACT, 2023
    January 21, 2024.

    Premature redemption under Sovereign Gold Bond (SGB) Scheme - Redemption Price for premature redemption due on January 25, 2024 (January 26, 27 and 28 being holiday, non-working Saturday and Sunday respectively) (SGB 2017-18 Series II)

    RBI Press release dated January 19, 2024-Excerpts:
    The next due date of premature redemption of the above tranche will be January 25, 2024 (January 26, 27 and 28 being holiday, non-working Saturday and Sunday respectively).
    The redemption price for premature redemption due on January 25, 2024 (January 26, 27 and 28 being holiday, non-working Saturday and Sunday respectively) shall be Rs 6,239/- (Rupees Six thousand two hundred and thirty-nine only) per unit of SGB .

    Read more.
    Note: The issue price of the bond was Rs2780. The redemption price is fixed at Rs 6239

    January 15, 2024.

    Draft circular on Review of regulatory framework for HFCs and harmonisation of regulations applicable to HFCs and NBFCs



    Experts
    Guidelines regarding Acceptance of Public Deposits (applicable only to HFCs holding CoR to accept/ hold deposits)
    The revised regulations as stated in subsequent paragraphs would be applicable to HFCs accepting or holding public deposits.

    All deposit taking HFCs shall maintain, on an ongoing basis, liquid assets to the extent of 15 per cent of the public deposits held by them, in a phased manner .

    The instructions contained in para 33 of Master Direction – Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 20161 on Safe Custody of Liquid Assets / Collection of Interest on SLR Securities shall mutatis-mutandis be applicable to deposit taking HFCs;

    Henceforth, it would be incumbent upon the HFC concerned to inform NHB in case the above asset cover falls short of the liability on account of public deposits.

    To be eligible for accepting public deposits, the deposit taking HFCs shall invariably obtain minimum investment grade credit rating as specified in para 25 of Master Direction – Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021 at least once a year. In case their credit rating is below minimum investment grade, such HFCs shall not renew existing deposits or accept fresh deposits thereafter till they obtain an investment grade credit rating.

    The ceiling on quantum of public deposits held by deposit taking HFCs, which comply with all prudential norms and minimum investment grade credit rating as specified, shall stand reduced from 3 times to 1.5 times of net owned fund

    With effect from the date of this circular, the public deposits accepted or renewed by HFCs shall be repayable after a period of twelve months or more but not later than sixty months.

    NBFCs shall devise a proper system of acknowledging the receipt of duly completed form of nomination, cancellation and/or variation of the nomination. Such acknowledgement shall be given to all the customers irrespective of whether the same is demanded by the customers. Further, NBFCs shall introduce the practice of recording on the face of the passbooks/ receipts the position regarding availment of nomination facility with the legend “Nomination Registered” and they shall also indicate the name of the Nominee in the passbook/ receipt, in case the customer is agreeable to the same.

    It shall be the obligation of NBFC to intimate the details of maturity of the deposit to the depositor at least 14 days before the date of maturity of the deposit.

    Read here RBI circular .

    January 10, 2024.

    Are you thinking of investments for Income Tax purpose ?

    Less than three months for the current final year 2023-24 to end. You may be interested to know your tax liability and the ways to invest and reduce your tax
    . Follow the link given below to know the deductions available under various sections of relevant acts.

    Income tax deductions available for FY2023-24

    January 08, 2024.

    Inoperative Accounts/ Unclaimed Deposits in banks- Revised Instructions


    Reserve Bank of India issued revised instructions on Inoperative Accounts/ Unclaimed Deposits in banks.
    This circular is applicable to all Commercial Banks (including RRBs) and all Co-operative Banks.
    The revised instructions shall come into effect from April 1, 2024.

    Excerpts :


    Inoperative Account- A savings/ current account shall be treated as inoperative, if there are no customer induced transactions in the account for a period of over two year

    Unclaimed Deposits- The credit balance in any deposit account maintained with banks, which have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more as mentioned in paragraph 3(iii) of the Depositor Education and Awareness (DEA) Fund Scheme, 2014.

    Unclaimed Deposit Reference Number (UDRN)- It is a unique number generated through Core Banking Solution (CBS) and assigned to each unclaimed account/ deposit transferred to DEA Fund of RBI. The number shall be such that the account holder or the bank branch where account is maintained, cannot be identified by any third party.

    Banks shall undertake atleast an annual review in respect of accounts, where there is no customer induced transactions for more than a year. In cases where there is no explicit mandate to renew the term deposit, the banks should review such accounts if the customers have not withdrawn the proceeds after maturity or transferred these to their savings/current account in order to prevent such deposits from becoming unclaimed.

    For the purpose of classifying an account as ‘inoperative’, only customer induced transactions and not bank induced transactions shall be considered

    The banks shall activate the inoperative accounts/ unclaimed deposits,
    including those which are under freeze by orders of various agencies like Courts, Tribunals, Law Enforcement Agencies, only after adhering to the KYC guidelines provided in the Master Direction - Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time) such as Customer Due Diligence (CDD), customer identification, risk categorisation, etc.

    Interest on savings accounts shall be credited on a regular basis irrespective of the fact that the account is in operation or not.

    The banks are not permitted to levy penal charges for non-maintenance of minimum balances in any account that is classified as an inoperative account.

    No charges shall be levied for activation of inoperative accounts.

    The banks shall not allow any debit transaction in an inoperative account unless there is a customer induced activation
    as per the procedure mentioned in paragraph 6 of these guidelines

    Read more

    January 03, 2024.

    Master Direction - Reserve Bank of India (Internal Ombudsman for Regulated Entities) Directions, 2023

    Excerpts:
    The Internal Ombudsman mechanism has been set up with a view to strengthen the Internal Grievance Redress system of the regulated entities.

    These Directions shall come into effect from December 29, 2023 and shall apply to the whole of India.

    Internal Ombudsman means any person appointed under clause 5 of these Directions;

    These Directions shall apply to
    (a) Banks as defined under clause 3(1)(a) of these Directions and having 10 or more banking outlets in India, whether such bank is incorporated in India or outside India;
    (b) NBFCs as defined under clause 3(1)(j) of these Directions and fulfilling the following criteria as on date:
    Deposit-taking NBFCs (NBFCs-D) with 10 or more branches;
    Non-Deposit taking NBFCs (NBFCs-ND) with asset size of Rs.5,000 crore and above and having public customer interface; --apart from other entities

    (f) Deficiency in service means a shortcoming or an inadequacy in any service, which the regulated entity is required to provide statutorily or otherwise, which may or may not result in financial loss or damage to the customer;

    Read more


    --Happy New Year 2024--

    Best wishes to all our visitors.Wish you very happy and prosperous new year.
    May all your dreams and all the things that make life beautiful come true.

    aiohomepagenewhtml

    PO Small Savings Interest -January 2024 to March 2024.

    PPF,NSC,SCSS,Sukhanya Samriddhi Interest
  • Three year time deposit interest changed from 7.00% to 7.10 % and Sukanya Samruthi Scheme interest changed from 8.00% to 8.20%.
  • No change in interest rates for other schemes.

  • Read details here


    Central Sector Interest Subsidy (CSIS) Scheme

    Are you in need of loan to pursue your study ? Do you know Central Government is providing subsidy to economically weaker eligible students?
    Read more

    Premature redemption under Sovereign Gold Bond Scheme -(SGB 2017-18 Series XII)

    RBI press release dated December 15, 2023.
    Excerpts
  • Redemption due on December 18, 2023.
  • The redemption price for premature redemption due on December 18, 2023 shall be Rs 6199/- per unit of SGB.
  • Read more.

    National savings Certificate(NSC) Interest Accretion year wise Chart .

    Investments in NSC and interest accrued are eligible deductions u/s 80c of Income Tax Act.

    Investments made during the financial year and interest accrued for the first four completed years are also eligible as deductions.
    Show the accrued interest as income and claim deductions for the same u/s 80c.


    Bank Fixed Deposit Interest Rates- Public and Private Sector Banks-Updated on December 14, 2023.

    A.Public Sector Banks


  • For one year Fixed Deposit Canara bank offers interest 6.80% pa .
  • For three year Fixed Deposit Bank of Baroda offers interest 7.25 % pa .
  • For five year Fixed Deposit Canara bank and Union Bank offers interest 6.70 % pa .


  • Read More.

    B.Private Sector Banks


  • For one year Fixed Deposit IndusInd bank offers interest 7.50 % pa .
  • For three year Fixed Deposit Development Credit Bank offers interest 7.60 % pa .
  • For five year Fixed Deposit Development Credit Bank offers interest 7.40 % pa .

  • Please note interest rates are subject to change. Before taking any decision confirm the interest rates from respective banks.

    Read More.

    OFFICERS’ WAGE REVISION- MOU Signed between bank unions and IBA

    . Excerpts
  • The wage revision will be effective from 1.11.2022 for five years.
  • Wage increase is agreed at 17% which works out to Rs 12449 crores.
  • Merger of Dearness Allowance corresponding to 8088 points for construction of new pay scale.
  • Loading of 3% amounting Rs 1795 crores.
  • One time measure - Pension as an ex-gratia up to 31.10.2022 retirees, which will not attract dearness allowance.
  • 5 Day Banking recommended to Govt. will be pursued by IBA
  • Payment of ex-gratia to pensioners and family pensioners of private sector Banks and foreign Banks will be settled to the mutual satisfaction.

  • Paving the Way to 12th Bipartite Settlement

    MOU signed between Bank Unions and IBA on 7-12-2023

    Excerpts
  • 12th BPS will be effective from 1-11-2022 and for a period of 5 years.
  • Merger of DA with existing Basic Pay upto 8088 points of Index and with an additional loading of 3% thereon.
  • The total increase in payslip components cost will be 17%
  • The total cost of the wage revision for employees and officers put together will be Rs. 12,499 crores. ( In last Settlement it was Rs. 7898 crores).
  • 5 Day Banking recommended to Govt. will be pursued by IBA
  • For all pensioners/family pensioners, ex-gratia pension will be considered.

  • Monetary Policy Statement, 2023-24 Resolution of the Monetary Policy Committee (MPC) December 6 to 8, 2023


    Excerpts
    On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (December 8, 2023) decided to:
    Keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent.
    The standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
    The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.
    These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.
    Read more

    Sovereign Gold Bond Scheme 2023-24-Date:Dec 08, 2023

    Excerpts
    Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds (SGBs) in tranches as per the calendar specified below:
    S. No. 1. Tranche 2023-24 Series III Date of Subscription December 18 – December 22, 2023 Date of Issuance December 28, 2023
    2.Tranche 2023-24 Series IV Date of Subscription February 12 – February 16, 2024 Date of Issuance February 21, 2024
    Read more

    Final redemption under Sovereign Gold Bond (SGB) Scheme - Price for final redemption of SGB 2015-I due on November 30, 20

    Excerps from RBI Press release dated November 24, 2023. (SGB 2015-I - Issue date November 30, 2015) The Gold Bonds shall be repayable on the expiration of eight years from the date of the issue of the Gold Bonds. Accordingly, the final redemption date of the above tranche shall be November 30, 2023. The price for the final redemption due on November 30, 2023 shall be ₹6132/- (Rupees Six thousand one hundred thirty-two only) per unit of SGB
    Read more

    RegulatoryMaster Direction on Information Technology Governance, Risk, Controls and Assurance Practices


    RBI Notifications dated November 07, 2023 Read more

    Regulatory measures towards consumer credit and bank credit to NBFCs

    RBI press release dated November 16, 2023 addressed to Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks) Non-Banking Financial Companies (including HFCs)

    Please refer to Governor’s Statement dated October 6, 2023 flagging the high growth in certain components of consumer credit and advising banks and non-banking financial companies (NBFCs) to strengthen their internal surveillance mechanisms, address the build-up of risks, if any, and institute suitable safeguards, in their own interest.
    The high growth seen in consumer credit and increasing dependency of NBFCs on bank borrowings were also highlighted by Governor in the interactions with MD/CEOs of major banks and large NBFCs in July and August 2023, respectively.
    2. In this context, it has been decided to effect the following measures as under:
    A. Consumer credit exposure
    (a) Consumer credit exposure of commercial banks
    As per extant instructions applicable to commercial banks1, consumer credit attracts a risk weight of 100%. On a review, it has been decided to increase the risk weights in respect of consumer credit exposure of commercial banks (outstanding as well as new), including personal loans, but excluding housing loans, education loans, vehicle loans and loans secured by gold and gold jewellery, by 25 percentage points to 125%. (b) Consumer credit exposure of
    In terms of extant norms, NBFCs’ loan exposures generally attract a risk weight of 100%2. On a review, it has been decided that the consumer credit exposure of NBFCs (outstanding as well as new) categorised as retail loans, excluding housing loans, educational loans, vehicle loans, loans against gold jewellery and microfinance/SHG loans, shall attract a risk weight of 125%.
    (c) Credit card receivables
    As per extant instructions, credit card receivables of scheduled commercial banks (SCBs) attract a risk weight of 125%3 while that of NBFCs attract a risk weight of 100%4. On a review, it has been decided to increase the risk weights on such exposures by 25 percentage points to 150% and 125% for SCBs and NBFCs respectively.
    B. Bank credit to NBFCs
    In terms of extant norms, exposures of SCBs to NBFCs, excluding core investment companies, are risk weighted as per the ratings assigned by accredited external credit assessment institutions (ECAI)5. On a review, it has been decided to increase the risk weights on such exposures of SCBs by 25 percentage points (over and above the risk weight associated with the given external rating) in all cases where the extant risk weight as per external rating of NBFCs is below 100%. For this purpose, loans to HFCs, and loans to NBFCs which are eligible for classification as priority sector in terms of the extant instructions shall be excluded.

    C. Strengthening credit standards

    (a) The REs shall review their extant sectoral exposure limits for consumer credit and put in place, if not already there, Board approved limits in respect of various sub-segments under consumer credit as may be considered necessary by the Boards as part of prudent risk management. In particular, limits shall be prescribed for all unsecured consumer credit exposures. The limits so fixed shall be strictly adhered to and monitored on an ongoing basis by the Risk Management Committee.

    (b) All top-up loans extended by REs against movable assets which are inherently depreciating in nature, such as vehicles, shall be treated as unsecured loans for credit appraisal, prudential limits and exposure purposes.

    3. The above instructions have been issued in exercise of the powers conferred by the Sections 21 and 35A of the Banking Regulation Act, 1949; Chapter IIIB of the Reserve Bank of India Act, 1934 and Sections 30A, 32 and 33 of the National Housing Bank Act, 1987.

    4. The above instructions, other than paragraph 2C(a), shall come into force with immediate effect. All REs shall endeavour to comply with the provisions at paragraph 2C(a) at the earliest, but in any case shall implement them by no later than February 29, 2024.

    Read more.


    Premature redemption under Sovereign Gold Bond (SGB) Scheme - Redemption Price for premature redemption due on November 20, 2023 (SGB 2017-18 Series VIII)

    RBI press release dated November 17, 2023- Excerpts :
    The next due date of premature redemption of the above tranche shall be November 20, 2023.
    The redemption price for premature redemption due on November 20, 2023 shall be ₹6076/- (Rupees Six thousand seventy six only) per unit of SGB
    Incidentally the issue price at the time of issue in Novemmber 13-15 ,2017 was Rs2911-and the present redemtion price is Rs 6076-an appreciation of nearly 100% in 5 years.

    Read more.


    Non-Callable Deposits - Master Direction on Interest Rate on Deposits

    RBI press release dated October 26, 2023- Excerpts :
    (i) the minimum amount for offering non-callable TDs may be increased from Rupees fifteen lakh to Rupees one crore
    i.e., all domestic term deposits accepted from individuals for amount of Rupees one crore and below shall have premature-withdrawal-facility and
    (ii) these instructions shall also be applicable for Non-Resident (External) Rupee (NRE) Deposit / Ordinary Non-Resident (NRO) Deposits.
    Read more.



    October 12, 2023.
     

    Post Office Small Savings Interest Rates

    October 2023 to December 2023.

    Savings Account
    4.0%.
     
    1 Year Time Deposit
    6.9%.
     
    2 Year Time Deposit
    7.0%.
     
    3 Year Time Deposit
    7.0%.
     
    5 Year Time Deposit
    7.5%.
     
    5 Year Recurring Deposit
    6.7%.
     
    5 Year Senior Citizen's Savings
    8.2%.
     
    5 Year Monthly Income Deposit
    7.4%.
     
    5 Year National Savings Certificate.
    7.7%.
     
    Public Provident Fund
    7.1%.
     
    Kisan Vikas Patra
    7.5%.
     
    Sukanya Samriddhi
    8.0%.





    Deposit Interest Rates -PSB

    Deposit Interest Rates -Private Banks

    P.O Small Savings Schemes interest rates-
    1st January 2019 to 31st December 2023.



    September 30, 2023.

    Post office Small Savings Interest Rates for the quarter from october -December 2023

    Interest rates kept unchanged except 5 year Recurring deposit rate changed from 6.5% to 6.7%.
    Read details here


    September 29, 2023.

    Responsible Lending Conduct – Release of Movable / Immovable Property Documents on Repayment/ Settlement of Personal Loans

    Excerpts:

    1.Release of Movable / Immovable Property Documents

    2.The REs shall release all the original movable / immovable property documents and remove charges registered with any registry within a period of 30 days after full repayment/ settlement of the loan account.

    3. The borrower shall be given the option of collecting the original movable / immovable property documents either from the banking outlet / branch where the loan account was serviced or any other office of the RE where the documents are available, as per her / his preference.

    4. The timeline and place of return of original movable / immovable property documents will be mentioned in the loan sanction letters issued on or after the effective date.

    5. In order to address the contingent event of demise of the sole borrower or joint borrowers, the REs shall have a well laid out procedure for return of original movable / immovable property documents to the legal heirs. Such procedure shall be displayed on the website of the REs along with other similar policies and procedures for customer information.

    Compensation for delay in release of Movable / Immovable Property Documents

    6. In case of delay in releasing of original movable / immovable property documents or failing to file charge satisfaction form with relevant registry beyond 30 days after full repayment/ settlement of loan, the RE shall communicate to the borrower reasons for such delay. In case where the delay is attributable to the RE, it shall compensate the borrower at the rate of ₹5,000/- for each day of delay.

    7. In case of loss/damage to original movable / immovable property documents, either in part or in full, the REs shall assist the borrower in obtaining duplicate/certified copies of the movable / immovable property documents and shall bear the associated costs, in addition to paying compensation as indicated at paragraph 6 above. However, in such cases, an additional time of 30 days will be available to the REs to complete this procedure and the delayed period penalty will be calculated thereafter (i.e., after a total period of 60 days).

    8. The compensation provided under these directions shall be without prejudice to the rights of a borrower to get any other compensation as per any applicable law.

    More




    Date : August 22, 2023.

    Fair Lending Practice - Penal Charges in Loan Accounts

    Excerpts:
    Reserve Bank of India issued revised instructions on Regulated Entities (RE)for charging penal interest/charges on loans
    • On a review of the practices followed by REs for charging penal interest/charges on loans, the following instructions are issued for adoption.
    • Penalty, if charged, for non-compliance of material terms and conditions of loan contract by the borrower shall be treated as ‘penal charges’ and shall not be levied in the form of ‘penal interest’ that is added to the rate of interest charged on the advances. There shall be no capitalisation of penal charges i.e., no further interest computed on such charges. However, this will not affect the normal procedures for compounding of interest in the loan account.
    • The REs shall not introduce any additional component to the rate of interest and ensure compliance to these guidelines in both letter and spiri.
    • The quantum of penal charges shall be reasonable and commensurate with the non-compliance of material terms and conditions of loan contract without being discriminatory within a particular loan / product category.
    • The penal charges in case of loans sanctioned to ‘individual borrowers, for purposes other than business’, shall not be higher than the penal charges applicable to non-individual borrowers for similar non-compliance of material terms and conditions.
    • The quantum and reason for penal charges shall be clearly disclosed by REs to the customers in the loan agreement and most important terms & conditions / Key Fact Statement (KFS) as applicable, in addition to being displayed on REs website under Interest rates and Service Charges.
    • Whenever reminders for non-compliance of material terms and conditions of loan are sent to borrowers, the applicable penal charges shall be communicated. Further, any instance of levy of penal charges and the reason therefor shall also be communicated.
    • These instructions shall come into effect from January 1, 2024.

    • Read more.

      RBI launches UDGAM-Centralised Web Portal for searching Unclaimed Deposits

      The Governor, Reserve Bank of India today launched a Centralised Web Portal उद्गम UDGAM (Unclaimed Deposits – Gateway to Access inforMation). This portal has been developed by RBI for use by members of public to facilitate and make it easier for them to search their unclaimed deposits across multiple banks at one place.

      The Reserve Bank of India had announced the development of a centralised web portal for searching unclaimed deposits as part of the Statement on Developmental and Regulatory Policies dated April 06, 2023. Given the increasing trend in the amount of unclaimed deposits, RBI has been undertaking public awareness campaigns from time to time to sensitise the public on this matter. Further, through these initiatives, the RBI has been encouraging members of public to identify and approach their respective banks for claiming unclaimed deposits.

      The launch of the web portal will aid users to identify their unclaimed deposits/ accounts and enable them to either claim the deposit amount or make their deposit accounts operative at their respective banks. Reserve Bank Information Technology Pvt Ltd (ReBIT), Indian Financial Technology & Allied Services (IFTAS) and participating banks have collaborated on developing the portal.

      To begin with, users would be able to access the details of their unclaimed deposits in respect of seven banks presently available on the portal. The search facility for remaining banks on the portal would be made available in a phased manner by October 15, 2023.
       

      Reserve Bank of India to Launch the Pilot Project for Public Tech Platform for Frictionless Credit

      Read details here.


    Date : August 15, 2023.

    Group Medical Insurance Scheme - Minutes of Meeting held on 19-07-2023 between IBA and UFBU.

    Read details here.

    Reserve bank issued notification on Requirement for maintaining additional CRR.

      Effective from the fortnight beginning August 12, 2023, all Scheduled Commercial Banks / Regional Rural Banks / all Scheduled Primary (Urban) Co-operative Banks / all Scheduled State Co-operative Banks to maintain with the Reserve Bank of India, an incremental CRR (I-CRR) of 10 per cent on the increase in NDTL between May 19, 2023 and July 28, 2023.
      You may be interested to read this also
      Statement on Developmental and Regulatory Policies
    Date:July 26, 2023.
    National Savings Certificates (NSC)- Scheme Details:
    • Excerpts :-
    • Minimum Rs. 1000 and in multiple of Rs. 100 , no maximum limit.
    • Any number of accounts can be opened under the scheme.
    • Deposits qualify for deduction under section 80C of Income Tax Act.
    • The deposit shall mature on completion of five years from the date of the deposit.
    • NSC may be pledged or transferred as security.
    • NSC may not be prematurely closed before 5 years except the following conditions
      On the death of a single account,
      or any or all the account holders in a joint account
    • NSC may be transferred from one person to another person on the following conditions only.
      (i) On the death of account holder to nominee/legal heirs.
      (ii) On the death of account holder to joint holder(s).
      (ii) On order by the court.
      (iii) On pledging of account to the specified authority.
    Read more on NSC Scheme Details
    Some useful links on National Savings Certificates:

    National Savings Certificates (NSC )Year wise interest rates , interest accretion,maturity value and Accrued Interest eligible for deduction u/s80c calculator.

    Latest Post office Small Savings Schemesinterest rates-From 1st January 2019 to 30th September 2023.

    Date:July 12,2023.

    National Savings Certificates (NSC ) VIII th Issue -
    New Investment and Interest accrued eligible for deduction U/S 80C
    Financial Year 2023-24.

    Click here for calculator

    Date:May 20,2023.

    Reserve Bank of India withdraws Rs2000 Denomination Banknotes from circulation-the notes Will continue as Legal Tender-

    • Excerpts from RBI press release:
      This denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public.
    • It has been decided to withdraw the Rs2000 denomination banknotes from circulation.
    • The banknotes in Rs2000 denomination will continue to be legal tender.
    • Members of the public may deposit Rs2000 banknotes into their bank accounts and/or exchange them into banknotes of other denominations
    • Members of the public are encouraged to utilise the time up to September 30, 2023 to deposit and/or exchange the Rs2000 banknotes.
    • Read FAQ for further clarifications.

    FAQ-Rs2000 Denomination Banknotes-Withdrawal from Circulation; Will continue as Legal Tender-

    Implementation of Indian Accounting Standards (Ind AS)

    Excerps from RBI Circular To address the prudential concerns arising from continued recognition of unrealised income, it has been decided that ARCs preparing their financial statements as per Ind AS, shall reduce the following amounts from their net owned funds while calculating the Capital Adequacy Ratio and the amount available for payment of dividend: (a) Management fee recognised during the planning period1 that remains unrealised beyond 180 days from the date of expiry of the planning period. (b) Management fee recognised after the expiry of the planning period that remains unrealised beyond 180 days of such recognition. (c) Any unrealised management fees, notwithstanding the period for which it has remained unrealised, where the net asset value of the Security Receipts has fallen below 50 per cent of the face value
    Read more....

    February 02,2023.

    Income tax fy 2023-24 (ay 2024-25) finance act and important links


    India Budget Website.

    Budget 2023 Finance Minister speech.

    Budget 2023 at a glance.

    Key features of Budget 2023-24.

    Finance Bill 2023.

    Income Tax Act 1961 (as amended by Finance Act 2022).

    TAX DEDUCTION FROM SALARIES U/S 192 OF THE INCOME-TAX ACT, 1961 - FINANCIAL YEAR 2022-23.
     

    Some Important Sections


    Deduction u/s 80C in respect of life insurance premia, contributions to provident fund, etc.

    Deduction U/S 80CCA in respect of deposits under National Savings Scheme

    Deduction U/S 80CCB in respect of investment made under Equity Linked Savings Scheme.

    Deduction U/S 80CCC in respect of contribution to certain pension funds.

    Deduction U/S 80CCD in respect of contribution to pension scheme of Central Government.

    Section 80CCE :Limit on deductions under sections 80C, 80CCC and 80CCD.

    Section 80CCF Deduction in respect of subscription to long-term infrastructure bonds. 80CCF

    Section 80CCG-Deduction in respect of investment made under an equity savings scheme.

    Section 80D-Deduction in respect of health insurance premia.

    Section 80DDB-Deduction in respect of medical treatment, etc.

    Deduction U/S 80E in respect of interest on loan taken for higher education.

    Deduction U/S 80EE in respect of interest on loan taken for residential house property.

    Deduction U/S 80EEA in respect of interest on loan taken for certain house property.

    Deduction U/S 80G in respect of donations to certain funds, charitable institutions, etc.

    Deductions U/S 80GG in respect of rents paid.

    Deductions U/S 80TTA CA-Deductions in respect of other incomes -Deduction in respect of interest on deposits in savings account..

    Deductions U/S 80TTB-Deduction in respect of interest on deposits in case of senior citizens. .

    Deductions U/S 80U-Deduction in case of a person with disability..

    Deductions U/S 87-Rebate to be allowed in computing income-tax..

    Deductions U/S 87A-Rebate of income-tax in case of certain individuals..

    Deductions U/S 89-:Relief when salary, etc., is paid in arrears or in advance..
     

    Excerpts from Budget 2023 speech.

    Personal Income Tax. New personal income tax regime:
    The new tax rates are:

    0 to 3.00 lakhs. Nil.
    3 to 6.00 lakhs. 5%
    6 to 9.00 lakhs. 10%
    9 to 12.00 lakhs. 15%
    12 to 15.00 lakhs. 20%
    Above 15 lakhs 30%
      This will provide major relief to all tax payers in the new regime.
    I propose to reduce the highest surcharge rate from 37 per cent to 25 per cent in the new tax regime.
     
    • the limit of ` 3 lakh for tax exemption on leave encashment on
      retirement of non-government salaried employees
      was last fixed in the year 2002, when the highest basic pay in the government was ` 30,000/- pm.
      In line with the increase in government salaries, I am proposing to increase this limit to ` 25 lakh.
    • 152. We are also making the new income tax regime as the default tax regime.
      However, citizens will continue to have the option to avail the benefit of the old tax regime.
    • 153. Apart from these, I am also making some other changes as given in the annexure.
       

      Annexure to Part B of the Budget Speech 2023-24
      Amendments relating to Direct Taxes
      A. PROVIDING TAX RELIEF UNDER NEW PERSONAL TAX REGIME

    • A.1 The new tax regime for Individual and HUF, introduced by the Finance Act 2020, is now proposed to be the default regime.
    • A.2 This regime would also become the default regime for AOP (other than co-operative), BOI and AJP.
    • A.3 Any individual, HUF, AOP (other than co-operative), BOI or AJP not willing to be taxed under this new regime can opt to be taxed under the old regime. For those person having income under the head “profit and gains of business or profession and having opted for old regime can revoke that option only once and after that they will continue to be taxed under the new regime. For those not having income under the head “profit and gains of business or profession, option for old regime may be exercised in each year.
    • A.4 Substantial relief is proposed under the new regime with new slabs and tax rates as under:
      0 to 3.00 lakhs. Nil.
      3 to 6.00 lakhs. 5%
      6 to 9.00 lakhs. 10%
      9 to 12.00 lakhs. 15%
      12 to 15.00 lakhs. 20%
      Above 15 lakhs 30%
    • A.5 Resident individual with total income up to ` 5,00,000 do not pay any tax due to rebate under both old and new regime. It is proposed to increase the rebate for the resident individual under the new regime so that they do not pay tax if their total income is up to ` 7,00,000.
    • A.6 Standard deduction of ` 50,000 to salaried individual, and deduction from family pension up to ` 15,000, is currently allowed only under the old regime. It is proposed to allow these two deductions under the new regime also.
    • A.7 Surcharge on income-tax under both old regime and new regime is 10 per cent if income is above ` 50 lakh and up to ` 1 crore, 15 per cent if income is above `1 crore and up to ` 2 crore, 25 per cent if income is above ` 2 crore and up to ` 5 crore, and 37 per cent if income is above ` 5 crore. It is proposed that the for those individuals, HUF, AOP (other than co-operative), BOI and AJP under the new regime, surcharge would be same except thatthe surcharge rate of 37 per cent will not apply. Highest surcharge shall be 25 per cent for income above 2 crores. This would reduce the maximum rate from about 42.7 per cent to about 39 per cent. No change in surcharge is proposed for those who opt to be under the old regime.
    • A.8 Encashment of earned leave up to 10 months of average salary, at the time of retirement in case of an employee (other than an employee of the Central Government or State Government), is exempt under sub-clause (ii) of clause (10AA) of section 10 of the Income-tax Act (the Act) to the extent notified. The maximum amount which can be exempted is 3 lakh at present. It is proposed to issue notification to extend this limit to 25 lakh.



    INCOME-TAX DEDUCTION FROM SALARIES UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961 -FINANCIAL YEAR 2022-23


    CIRCULAR NO. 24/2022 of GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) CENTRAL BOARD OF DIRECT TAXES

    Read here the detailed circular.

    October 22 , 2022.
    National Savings Certificate VIIIth issue- Investment and Accrued Interest eligible for deduction from Income for financial year 2022-23.
    Regular investment in National Savings Certificate is one of the attractive investment avenue to reduce tax liability. Here is a simple calculator to know the amount you can claim as deuctions from income U/S 80C for the financial year 2022-23.
    Nsc Accrued Interest Calculator-FY 2022-23.

    September 08 , 2022.
    Guidelines on Digital Lending.
    Excerpt from RBI Circular.
    • Annual Percentage Rate (APR): APR is the effective annualised rate charged to the borrower of a digital loan. .
    • Digital Lending: A remote and automated lending process, largely by use of seamless digital technologies for customer acquisition, credit assessment, loan approval, disbursement, recovery, and associated customer service.
    • Regulated Entities (REs )shall ensure that all loan servicing, repayment, etc., shall be executed by the borrower directly in the RE’s bank account without any pass-through account/ pool account of any third party. The disbursements shall always be made into the bank account of the borrower except for disbursals covered exclusively under statutory or regulatory mandate (of RBI or of any other regulator), flow of money between REs for co-lending transactions2 and disbursals for specific end use, provided the loan is disbursed directly into the bank account of the end-beneficiary. REs shall ensure that in no case, disbursal is made to a third-party account, including the accounts of LSPs and their DLAs, except as provided for in these guidelines.
    • REs shall ensure that any fees, charges, etc., payable to LSPs are paid directly by them (REs) and are not charged by LSP to the borrower directly.
    • The penal interest/charges levied, if any, on the borrowers shall be based on the outstanding amount of the loan. Further, rate of such penal charges shall be disclosed upfront on an annualized basis to the borrower in the Key Fact Statement (KFS).
    • Annual Percentage Rate (APR) - APR as all-inclusive cost of digital loans for the borrower shall be disclosed upfront by REs and shall also be a part of the Key Fact Statement.
    • REs shall provide a Key Fact Statement (KFS) to the borrower before the execution of the contract in a standardized format for all digital lending products.
    • The KFS shall, apart from other necessary information, contain the details of APR, the recovery mechanism, details of grievance redressal officer designated specifically to deal with digital lending/ FinTech related matter and the cooling-off/ look-up period.
    • Any fees, charges, etc., which are not mentioned in the KFS cannot be charged by the REs to the borrower at any stage during the term of the loan.

    • Read more

    July 23 , 2022
    The Reserve Bank (Depositor Education and Awareness Fund) Scheme, 2014
    A brief excerpts from RBI Circulars:
    • Any amount remaining unclaimed for ten years or more are to be transferred to the fund including the accrued interest.
    • Banks to display the list of unclaimed deposits/inoperative accounts which are inactive / inoperative for ten years or more on their respective websites.
    • Banks to update their websites at least on a monthly basis.


    • 1.The Depositor Education and Awareness Fund Scheme, 2014
      The amounts to be credited to the Fund shall be the credit balances in any deposit account maintained with banks which have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more, including:-
      (a) savings bank deposit accounts;
      (b) fixed or term deposit accounts;
      (c) cumulative/recurring deposit accounts;
      (d) current deposit account;
      (e) other deposit accounts in any form or with any name;
      (f) cash credit account;
      (g) loan accounts after due appropriation by the banks;
      (h) margin money against issue of Letter of Credit/Guarantee etc., or any security deposit in any account;
      (i) outstanding telegraphic transfers, mail transfers, demand drafts, pay orders, bankers cheques, travelers cheques, sundry deposit accounts, vostro accounts, inter-bank clearing adjustments and other such transitory accounts, unreconciled credit balances on account of ATM transactions, etc.; and
      (j) undrawn balance amounts remaining in any prepaid card issued by banks.
    • Read more.

    2. Operational Guidelines
    As per paragraph 3(vi) of the Scheme, banks shall calculate the cumulative balances in all accounts along with interest accrued, as on the day prior to the effective date, i.e May 23, 2014 and such amounts due should be transferred to the Depositor Education and Awareness Fund (Fund) on June 30, 2014 (before the close of banking hours). Subsequently, as mentioned in paragraph 3(vii) of the Scheme, banks shall transfer to the Fund the amounts becoming due in each calendar month
    Read more

    3. Clarifications on Operational Guidelines
    As per paragraph 3(vi) of the Scheme, banks shall calculate the cumulative balances in all accounts along with interest accrued, as on the day prior to the effective date, i.e, May 23, 2014 and such amounts due should be transferred to the Depositor Education and Awareness Fund (Fund) on June 30, 2014 before the close of banking hours. However, as regards the calculation of interest accrued on such accounts, it has been clearly indicated in paragraph 3(v) of the Scheme that bank shall transfer to the Fund the entire amount as specified in sub-paragraph (iii), including the accrued interest that the bank would have been required to pay to the customer/ depositor as on the date of transfer to the Fund”. It is once again clarified that in all such unclaimed interest bearing deposits that would be transferred to the Fund by the banks on June 30, 2014, interest accrued should be credited in the account till the date of transfer to the Fund. Illustratively, if a bank transfers to the Fund any unclaimed Saving Bank account balance on June 30, 2014 the interest up to and for June 29, 2014 would be paid into the account by the bank. The Fund would pay interest with effect from June 30, 2014 till the date of payment to the customer, at the interest rate notified by the Reserve Bank from time to time.
    Read more

    4.Unclaimed Deposits/ Inoperative Accounts Banks to Display list of Inoperative Accounts
    Banks are, therefore, advised that they should display the list of unclaimed deposits/inoperative accounts which are inactive / inoperative for ten years or more on their respective websites. The list so displayed on the websites must contain only the names of the account holder(s) and his/her address in respect of unclaimed deposits/inoperative accounts. In case such accounts are not in the name of individuals, the names of individuals authorized to operate the accounts should also be indicated. However, the account number, its type and the name of the branch shall not be disclosed on the banks website. The list so published by the banks should also provide a 'Find ' option to enable the public to search the list of accounts by name of the account holder.
    . Read more

    5. Interest rates payable on unclaimed interest bearing deposit
    All the banks are advised to calculate the interest payable on interest bearing deposits transferred to RBI at the rate of 4 per cent p.a. up to June 30, 2018, 3.5 per cent w.e.f. July 1, 2018 up to May 10, 2021 and at 3 per cent with effect from May 11, 2021 till the time of payment to the depositor/claimant.
    Read more

    6. Updation of list of inoperative accounts on their website
    It is observed that banks are not updating their websites with the list of unclaimed deposits/ inoperative accounts which are inactive/ inoperative for ten years or more. Banks are, therefore, advised to update their websites at least on a monthly basis by: i) adding the names and address of the account holders whose deposits have been transferred to the Fund during the month/period. ii) deleting the names and address of account holders whose claim were admitted by the banks during the month/period. In doing this the banks need not wait for refund from the Fund.
    Read more
     


    June 25 , 2022.
    RBI Payment Vision 2025.

    The current Vision document builds on the Payments Vision 2019-21 document and outlines the thought process for the period up to December 2025. It may not necessarily be constrained by what the Payments Vision documents. For instance, recent developments in terms of (a) establishment of Reserve Bank Innovation Hub; (b) framework for security of card transactions like switch on / off facility; (c) guidelines on limiting customer liability in case of unauthorised transactions using Prepaid Payment Instruments (PPIs); (d) enabling Online Dispute Resolution (ODR) for digital payments;

    The Payments Vision 2021 had envisaged to empower every Indian with access to a bouquet of e-payment options that is safe, secure, convenient, quick and affordable, and had set four goalposts of Competition, Cost, Convenience and Confidence with 36 specific action points and 12 expected outcomes.

    The Payments Vision 2025 promises to further elevate our payment systems towards a realm of empowering users with affordable payment options accessible anytime and anywhere with convenience**

    The Payments Vision 2025 document is presented across the five anchor goalposts of Integrity, Inclusion, Innovation, Institutionalisation and Internationalisation..

    Goalposts for Payments Vision 2025 --

    • Weave in alternate authentication mechanism(s) for digital payment transactions (para 4.1.1) --
    • Broaden scope, usage and relevance of LEI in all payment activities --
    • Expand interoperability to contactless transit card payments in offline mode (para 4.1.3)--
    • Enhance scalability and resilience of payment systems (para 4.1.4)--
    • Leverage ODR system for fraud monitoring and reporting (para 4.1.5)--
    • Provide enhancements to CPFIR (para 4.1.6)--
    • Provide payee name look-up for fund transfers (para 4.1.7) --
    • Increase proportionate oversight of PSOs (para 4.1.8)--
    • Include assessment of RTGS & NEFT under Principles for Financial Market Infrastructures (PFMIs) (para 4.1.9) --
    • Explore local processing of payment transactions --
    • Study creation of Digital Payments Protection Fund (DPPF) (para 4.2.10)
    • Make payment systems more inclusive (para 4.1.11--
    • Read full text of "RBI Payment Vision 2025."


    Cash Reserve Ratio (CRR) :CRR is the portion of the deposits (total demand and time liabilities ) of a bank to be kept as cash reserve. The banks can maintain the cash reserve in the form of cash with the bank itself or credit balance in its account maintained with RBI It is a statutory requirement.

    Statutory Liquidity Ratio (SLR) : SLR is the portion of deposits ( net demand and time liabilities )of a bank to be maintained as cash, gold or approved securities.

    Repo Rate: Repo Rate is the rate at which banks can borrow money from RBI against listed securities with agreement to repurchase the securities at a specified future date from RBI.

    Reverse Repo Rate :Reverse Repo Rate is exactly the opposite of the Repo Rate .Banks can park their funds with RBI to take advantage of the higher Reverse Repo Rate.

    Bank Rate:Bank Rate is the rate at which commercial banks can borrow money from RBI. The Bank Rate movement indicates the long term health of the economy. Upward revision of Bank Rate will make funds costlier for banks which may result in banks raising their lending rates.


    For further readings please follow the links :

    Cash Reserve Ratio (CRR) revised

    Master Direction - Reserve Bank of India [Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)] Directions - 2021

    Settlement of Claims of Deceased Depositors:
    Nomination facility simplifies the procedure for settlement of claims of deceased depositors as banks get a valid discharge by making payment of the balance outstanding in a depositor's account at the time of his death or delivering contents of locker or articles kept in safe custody to the nominee.
    A joint account opened as "Either or Survivor" or "Anyone or Survivors" or "Former or Survivor" or "Latter or Survivor" will permit the surviving account holder(s) to have unimpeded access to the credit balance in the account for withdrawal if one of the co-account holders dies.
    Depending on the nature of claimant- Nominee, Survivor, legal heirs etc and amount of claim you may be required to submit among other documents

    New Pension Scheme for Public Sector Banks and Private Banks in India- Joining Bank on or after 01.04.2010
    Salient features:
    • There shall be no separate Provident Fund for employees joining the services of the bank on or after 01.04.2010.
    • Employees joining on or after 01.04.2010 will be covered under "The Defined Contributory Pension Scheme" as governed by the provisions of New Pension Scheme [NPS] introduced for employees of Central Government w.e.f 01.01.2004, available under "All Citizens Model" and as modified from time to time.
    • The new Pension Scheme will work on defined contribution basis and will have two Tiers i.e. Tier I & II
    • The contribution to Tier I will be mandatory for all the members of the scheme whereas contribution to Tier II will be optional and at the discretion of the employee.
    • The Employees shall contribute 10% of the Basic pay and Dearness Allowance towards the Defined Contributory Pension Scheme and the bank shall make 14% contribution in respect of these employees.
    • The scheme shall be regulated and administered by Pension Fund Regulatory And Development Authority (PFRDA) Contribution in Tier I will be kept in non-withdrawable Pension Account. There will be a Central Record Keeping Agency.
    • There will be three Pension Fund Managers namely : a) LIC Pension Fund Limited b) SBI Pension Fund Limited c) UTI Retirement Solutions Limited
    • The deployment of Funds will be done by NPS Trustees among LIC Pension Fund Limited, SBI Pension Fund Limited and UTI Retirement Solutions Limited.
    • Exit from NPS would be governed by" employer - employee" relation but within the overall rules prescribed for the individual subscribers under ALL CITIZENS MODEL
    • Read more .

    Various regulations on Housing Finance-Reserve Bank of India Circular dated 01.04.2022:
    Reserve Bank of India issued updated guidelines under Housing Finance covering various aspects of Housing Finance
    • Purpose
    • Various Regulations.
    • Quantum of Loan.
    • Innovative Housing Loan Products-Upfront Disbursal of Housing Loans.
    • Rate of Interest.
    • Exposure to Real Estate.
    • Housing Loans under Priority Sector.
    • Acquisition of Land.
    • Construction of Building / ready Built House.
    • Loans for repairs to the damaged dwelling units of families.
    • Finance to a person who already owns a house.
    • Purchase of a house by a borrower who proposes to let it out on rental basis.
    • Buying an old house where one is presently residing as a tenant.
    • Finance for construction meant for improving the conditions in slum areas .
    • Credit for slum improvement schemes .

    • Read detailed RBI Circular.
       



      Consolidated RBI Circular on Opening of Current Accounts and CC/OD Accounts by Banks


      1.1 For borrowers, where the aggregate exposure3 of the banking system is less than ₹5 crore, banks can open current accounts without any restrictions placed vide this circular subject to obtaining an undertaking from such customers that they (the borrowers) shall inform the bank(s), if and when the credit facilities availed by them from the banking system becomes ₹5 crore or more.
      1.2 Where the aggregate exposure of the banking system is ₹5 crore or more:
      1.2.1 Borrowers can open current accounts with any one of the banks with which it has CC/OD facility, provided that the bank has at least 10 per cent of the aggregate exposure of the banking system to that borrower. In case none of the lenders has at least 10 per cent of the aggregate exposure, the bank having the highest exposure among CC/OD providing banks may open current accounts.
      1.2.2 Other lending banks may open only collection accounts subject to the condition that funds deposited in such collection accounts will be remitted within two working days of receiving such funds, to the CC/OD account maintained with the above-mentioned bank (para 1.2.1) maintaining current accounts for the borrower. The balances in such collection accounts shall not be used for repayment of any credit facilities provided by the bank, or as collateral/ margin for availing any fund or non-fund based credit facilities. However, banks maintaining collection accounts are permitted to debit fees/ charges from such accounts before transferring funds to CC/OD account.
      1.2.3 Non-lending banks are not permitted to open current/ collection accounts. Read more from RBI Circular


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