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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 30 , 2022.
RBI Increase the policy repo rate by 50 basis points
Monetary Policy Statement, 2022-23 Resolution of the Monetary Policy Committee (MPC) September 28-30, 2022-Excerpts
Increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.90 per cent with immediate effect.
standing deposit facility (SDF) rate stands adjusted to 5.65 per cent and the marginal standing facility (MSF) rate and the Bank Rate to6.15 per cent.
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.
revised Rates :
Policy Repo Rate : 5.90%
Standing Deposit Facility Rate : 5.65%
Marginal Standing Facility Rate : 6.15%
Bank Rate : 6.15%
Fixed Reverse Repo Rate : 3.35%
Cash Reserve Ratio (CRR) : 4.50%
Standing Liquidity Ratio(SLR): 18.00%
Read more .
Click here to know
Latest RBI Policy Rates-Repo Rate, Bank Rate, CRR, SLR etc---
Reverse Repo Rate.
Cash Reserve Ratio(CRR).
Statutory Liquidity Ratio(SLR).
September 08 , 2022.
Guidelines on Digital Lending.
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.
Excerpt from RBI Circular.
Master Directions-Priority Sector Lending(PSL)-Targets and Classification(Updated as on August 02, 2022)
July 31 , 2022.
Dearness Allowance payable to Bank Officers and Staff from August 2022.
Average CPI(IW) Index for the Quarter : 8456.18
Increase in slabs for current quarter : 54 slabs
Number of Slabs for DA for current quarter : 526 slabs
D A Percentage : 36.82 %
Click here for DA Chart for August 2022 to October 2022.
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.
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
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.
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.
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.
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.
July 16 , 2022.
Additional arrangement for invoicing, payment, and settlement of exports / imports in INR- Excerpts:
Invoicing: All exports and imports under this arrangement may be denominated and invoiced in Rupee (INR).
Exchange rate between the currencies of the two trading partner countries may be market determined.
The settlement of trade transactions under this arrangement shall take place in INR in accordance with the procedure laid down in Para 3 of this circular.
AD banks in India have been permitted to open Rupee Vostro Accounts
Indian exporters may receive advance payment against exports from overseas importers in Indian rupees through the above Rupee Payment Mechanism
Issue of Bank Guarantee for trade transactions, undertaken through this arrangement, is permitted subject to adherence to provisions of FEMA
The balance in Special Vostro Accounts can be used for:
Payments for projects and investments.
Export/Import advance flow management
Investment in Government Treasury Bills, Government securities, etc. in terms of extant guidelines and prescribed limits, subject to FEMA and similar statutory provision.
Click to read RBI Circular -International Trade Settlement in Indian Rupees (INR)
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."
Reserve Bank increases repo rate with immediate effect.
Increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 4.90 per cent with immediate effect.
Consequently, the standing deposit facility (SDF) rate stands adjusted to 4.65 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.15 per cent.
The revised Policy Rates and Reserve Ratios as on 08.06.2022:
Policy Repo Rate : 4.90%
Standing Deposit Facility Rate : 4.65%
Marginal Standing Facility Rate : 5.15%
Bank Rate : 5.15%
Fixed Reverse Repo Rate : 3.35%
Cash Reserve Ratio (CRR) : 4.50%
Standing Liquidity Ratio(SLR): 18.00%
Read RBI Monetary Policy Statement, 2022-23 -(MPC) June 6-8, 2022
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
Implementation of Bharat Bill Payment System (BBPS) - Guidelines.
The Bharat Bill Payment System (BBPS) will function as a tiered structure for operating the bill payment system in the country with a single brand image providing convenience of ‘anytime anywhere’ bill payment to customers.
The objective of the BBPS is to implement an integrated bill payment system in the country that offers interoperable and accessible bill payment services to customers through a network of agents, enabling multiple payment modes, and providing instant confirmation of payment. Hence, it has been decided that the existing players (both banks & non-banks) catering to the requirements of bill payments as well as aggregation of payment services will be a part of BBPS.
Customer protection and grievance redressal
Under the BBPS, the BBPOUs shall disclose all important terms and conditions in clear and simple language (preferably in English, Hindi and the local language) comprehensible to the customers of various billers/users of its services.
These disclosures should include:
All charges and fees associated with the use of bill payment facility, and
The customer service telephone numbers and website URL
Each complaint will be assigned and identified by a unique complaint reference number within the BBPS.
After the complaint is lodged at any location, the BBPCU and/or the concerned BBPOU will escalate the complaint to the respective biller for redressal.
A suitable tracking system has to be enabled so that the fate of the complaint is known to the customer (on the basis of the unique complaint reference number) at any location.
The customer should not be levied any charges for lodging any complaints in the BBPS.
New Pension Scheme for Public Sector Banks and Private Banks in India-
Joining Bank on or after 01.04.2010
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 .
National Savings Certificate accrued Interest eligible for deduction from salary for financial year 2021-22.
One of the popular investment options for salaried persons to reduce tax liability is regular yearly investments in national Savings Certificate. Apart from claiming the entire amount invested in the respective financial year, one can claim the accrued interest on the certificates bought earlier years U/S 80C of Income Tax Act.
Here is a calculator to know the interest you can claim as deductions for FY 2021-22.
Income Tax Calculator FY 2022-23.
Know your estimated tax liability under " NEW AND OLD TAX REGIME"
and choose the quatum of investments required to reduce your tax liability.
Income Tax Calculator FY 2021-22.
Before filing income tax returns, know your tax liability under " NEW AND OLD TAX REGIME"
and choose the one favorable to you.
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
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.
Bank Fixed Deposit Schemes-How to Choose the right Scheme meeting your requirement.
We quite often come across various deposit schemes from banks.
REINVESTMENT DEPOSIT .
MONTHLY INCOME FIXED DEPOSIT ETC .
Some time we get confused to select the right scheme. If you understand the way interest is calculated and the periodicity by which you wish to avail the interest and the maturity proceeds,all your confusions will get cleared. Your return on the deposit depends on just three factors.
The period of deposit.
The periodicity of interest you intend to receive.
The rate of interest.
Except the rate of interest ,other two factors depend on your requirements. So your job is simplified in looking for the Bank offering highest interest for the period of deposit you intend to keep with the bank. As per existing norms for calculation of interest ,it is uniform among the banks. Interest on your deposit is calculated at the specified rate and compounded quarterly. The fixed deposit schemes can be classified under two broad category. Ordinary Fixed Deposit wherein you receive the interest every quarter. We may call this "Non-Cumulative Fixed Deposit" or simply "Fixed Deposit" For example if you deposit Rs100000 for one year at interest 10 % pa, you will receive Rs2500 on completion of every quarter and the Principal amount on completion of the deposit period(here 1 year).
In the other scheme called as Cumulative Deposit Scheme, as you are not availing the quarterly interest, Banks take it as your investment and give additional interest for the same. Hence you earn more interest than what you otherwise earn under Non-Cumulative Fixed Deposits.
Under Cumulative Deposit Scheme ,Interest will be paid on completion of Deposit Period. If you deposit Rs100000 for one year at interest 10 % pa, you will receive Rs110381 on completion of one year- Rs10381 being interest. You receive Rs381 more than what you may get under Ordinary Fixed Deposit Scheme.
For the convenience of depositors who want to receive interest every month, Banks have a scheme called "Monthly Interest Deposit Scheme". Under this scheme,you will get interest on every month. As you are receiving the interest before it is due for credit, interest under this scheme will be a little bit less than what you may get under Ordinary Fixed Deposit Scheme. You will get interest of Rs826 every month.Total interest will be Rs9912 To put it in a nutshell,apart from receiving your deposit amount on completion of deposit period you will receive towards interest as under:
Cumulative Deposit Scheme :Rs10381 on completion of deposit period.
Ordinary Fixed Deposit Scheme :Rs10000 (Rs2500 on completion of every quater-2500*4=10000)
Monthly Interest Deposit Scheme:Rs9912 (Rs826 every month-826*12=9912)
So you can choose the deposit scheme as per your requirement forgetting about the hundreds of schemes offered under different names .
Deposit Interest Rates of Banks.
Use the calculator to compare interest and the Maturity values for different deposit schemes.
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