This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1. RBI GENERAL GUIDELINES FOR INFANTA PRIYA POOJA NAIR
BANKS
2. Know Your Customer (KYC) Norms Guidelines The objective of
KYC guidelines is to prevent banks from being used, intentionally
or unintentionally, by criminal elements for money. KYC procedures
also enable banks to know/understand their customers and their
financial dealings better. Banks should keep in mind that the
information collected from the customer for the purpose of opening
of an account is to be treated as confidential (not for cross
selling or any other purposes). Banks should ensure that the
provisions of Foreign Contribution (Regulation) Act, wherever
applicable, are strictly followed. Banks should obtain only the
mandatory information required for KYC purpose at the time of
opening the account/during periodic updation.
3. Contd KYC Policy Banks should frame their KYC policies
incorporating the following four key elements: (a) Customer
Acceptance Policy; (b) Customer Identification Procedure; (c)
Monitoring of Transactions; and (d) Risk Management.
4. Customer Acceptance Policy (CAP) Every bank should develop a
clear Customer Acceptance Policy laying down criteria for
acceptance of customers. Banks should prepare a profile for each
new customer based on risk categorisation. The customer profile may
contain information relating to customers identity,
social/financial status, nature of business activity, their
location, etc. For the purpose of risk categorization, individuals
(other than High Net Worth) whose identities and sources of wealth
can be easily identified, may be categorized as low risk. It is
important to bear in mind that the adoption of the policy and its
implementation should not become too restrictive and must not
result in denial of banking services to general public, especially
to those, who are financially or socially disadvantaged.
5. Customer Identification Procedure (CIP) Customer
identification means identifying the customer and verifying his/her
identity by using reliable data or information. Acceptance of
Aadhaar letter for KYC purposes Acceptance of NREGA Job Card as KYC
document for normal accounts- In order to avoid inconvenience to
customers from rural areas, banks may accept NREGA Job Card as an
'officially valid document' for opening of bank accounts without
the limitations applicable to 'Small Accounts.
6. Monitoring of Transactions Banks can effectively control and
reduce their risk only if they have an understanding of the normal
and reasonable activity of the customer so that they have the means
of identifying transactions that fall outside the regular pattern
of activity. In view of the risks involved in cash intensive
businesses, accounts of bullion dealers and jewellers should also
be categorised by banks as high risk. High risk associated accounts
should be taken into account by banks to identify Suspicious
Transactions Reports.
7. RISK MANAGEMENT The Board of Directors of the bank should
ensure that an effective KYC programme is put in place by
establishing appropriate procedures and ensuring their effective
implementation.
8. GUIDELINES FOR REPORTING FRAUDS TO POLICE/CBI Private sector
banks (including foreign banks operating in India) should follow
the following guidelines for reporting of frauds (negligence and
cash shortages, cheating, forgery, etc. )to the State Police
authorities: In dealing with cases of fraud , banks should not only
try for recovering expeditiously the amount involved, but should
also be motivated by public interest and the need for ensuring that
the guilty persons do not go unpunished. Public sector banks should
report fraud cases involving amount of 300 lakh and above to CBI
and those below 300 lakh to local police, as detailed below:
9. Contd.. Cases to be referred to CBI (a) Cases involving 300.
lakh and above and upto 2500 lakh (b) All cases involving more than
2500 lakh Banking Security and Fraud Cell of the respective
centres, which is specialised cell of the Economic Offences Wing of
the CBI for major bank fraud cases. Cases to be referred to Local
Police Cases below 300 lakh Local Police. Cases of frauds above
10,000/- but below 1 lakh should be reported to the local police
station by the bank branch concerned. Fraud cases involving amounts
of 100 lakh and above should also be reported to the Director,
Serious Fraud Investigation Office (SFIO), Ministry of Company
Affairs. All fraud cases of value below `10,000/- involving bank
officials, should be referred to the Regional Head of the
bank.
10. Guarantees and co-acceptance The banks should confine
themselves to the provision of financial guarantees and exercise
due caution with regard to performance guarantee business. Banks
should guarantee shorter maturities and leave longer maturities to
be guaranteed by other institutions. No bank guarantee should
normally have a maturity of more than 10 years. While issuing such
guarantees, banks are advised to take into account the impact of
very long duration guarantees on their Asset Liability
Management.
11. HOUSING FINANCE GUIDELINES Banks could deploy their funds
under the housing finance allocation in any of the three
categories, i.e. 1. DIRECT HOUSING FINANCE Direct Housing Finance
refers to the finance provided to individuals or groups of
individuals including co-operative societies. The following types
of bank finance may be included under Direct Housing Finance: (i)
Bank finance extended to a person who already owns a house in
town/village where he resides, for buying/ constructing a second
house in the same or other town/ village for the purpose of self
occupation. (ii) Bank finance extended for purchase of a house by a
borrower who proposes to let it out on rental basis on account of
his posting outside the headquarters or because he has been
provided accommodation by his employer.
12. Contd.. (iii) Bank finance extended to a person who
proposes to buy an old house where he is presently residing as a
tenant. (iv) Bank finance granted only for purchase of a plot,
provided a declaration is obtained from the borrower that he
intends to construct a house on the said plot, with the help of
bank finance or otherwise, within such period as may be laid down
by the banks themselves. 2. INDIRECT HOUSING FINANCE Banks should
ensure that their indirect housing finance is channeled by way of
term loans to housing finance institutions, housing boards, other
public housing agencies, etc., primarily for augmenting the supply
of serviced land and constructed units. 3.Investment in bonds of
NHB/HUDCO, or combination thereof. NHB National Housing Bank HUDCO
Housing and Urban Development Corporation Ltd.
13. Guidelines issued on wilful defaulters RBI in consultation
with the Government of India, constituted in May 2001 a Working
Group on Wilful Defaulters (WGWD) for examining some of the
recommendations of the Committee. The Group submitted its report in
November 2001. The recommendations of the WGWD were further
examined by an In House Working Group constituted by the Reserve
Bank. Accordingly, the Scheme was further revised by RBI on May 30,
2002.
14. Master Circular on Branch Licensing - Regional Rural Banks
(RRBs) The opening of branches by banks is governed by the
provisions of the Banking Regulation Act. In terms of these
provisions, banks cannot open a new place of business in India or
abroad or change otherwise than within the same city, town or
village, the location of the existing place of business without the
prior approval of the Reserve Bank of India (RBI). It is mandatory
for RRBs to seek prior approval / license from Rural Planning and
Credit Department (RPCD) of RBI before opening of new branches /
offices. RRBs should fulfill the following conditions, to become
eligible to open new branches : (i) No default in maintenance of
SLR and CRR during the last two years; (ii) Operational profits are
being made; (iii) Net worth shows improvement; (iv) Net NPA ratio
does not exceed 8 per cent.
15. Contd Relaxation in Branch Licensing Policy : RRBs are
permitted to open branches in Tier 2 to Tier 6 centers (with
population of up to 99,999 as per Census 2001) without having the
need to take permission from RBI in each case, provided they
fulfill the following conditions as per the latest inspection
report: i) CRAR of at least 9%; ii) Net NPA ratio less than 5%;
iii) No default in CRR / SLR for the last year; iv) Net profit in
the last financial year; v) CBS compliant
16. RBI GUIDELINES FOR CO-OPERATIVE BANK
17. Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio
(SLR) The various Forms/Returns are given in the Banking Regulation
(Co-operative Societies) Rules, 1966. In order to monitor the
day-to-day position of liquidity of the bank, all Urban Cooperative
Banks (UCBs) are required to maintain a register, as per format
given in Annex 8, showing the daily position of cash reserve and
liquid assets maintained under sections 18 and 24 of the BR Act,
1949 (AACS).
18. Contd The work of maintaining the register on daily basis
may be entrusted to a responsible official and it should be put up
daily to the Chief Executive Officer, who is responsible for
ensuring compliance with the statutory liquidity requirements at
the close of business every day. To facilitate compilation of
figures under various heads of the register, the explanations in
respect of each item which form part of the Rules.
19. Maintenance of Deposit Accounts OPENING OF DEPOSIT ACCOUNTS
Introduction not Mandatory for opening accounts. Photographs of
Account Holders Address of Account Holders. OTHER SAFEGUARDS:
Permanent Account Number (PAN)/General Index Register (GIR) Number:
The banks are required to obtain PAN/GIR number of a depositor
opening an account with an initial deposit of Rs.50,000/- and
above.
20. Contd Authorisation: The opening of new accounts should be
authorised only by the Branch Manager or by the Officer-in-Charge
of the Deposit Accounts Department concerned at bigger branches.
Completion of Formalities: The banks should ensure that all account
opening formalities are undertaken at the bank's premises and no
document is allowed to be taken out for execution.
21. INTERNAL INSPECTION AND AUDIT Internal Audit Machinery: The
head of the inspection department at the Head Office should be a
sufficiently senior person and should report directly to the
Chairman. If the bank has Regional Offices, there should be an
audit machinery under an official of sufficient seniority as the
Regional Office Chief to conduct the periodic audit of branches
under its jurisdiction. Periodicity of Internal Audit: The
periodicity of the internal audit of the branches should be at
least once in every 12 months, which should be really of surprise
character.
22. Contd Compliance with Prudential Norms: Internal auditors
should bring out non-compliance with the prudential norms relating
to income recognition, asset classification and provisioning for
taking suitable action in the matter. Revenue Audit The reasons of
leakage of income unearthed during such audit should be examined
in-depth and action taken against the officials responsible for the
lapses.
23. Contd Cheque Purchase Transactions The internal inspectors
should verify all the cheque purchased/discounted beyond the
sanctioned limit. They should be asked to conduct a sample checking
of transactions. Supplementary Inspections/Audit The annual
internal inspection may be supplemented by surprise short
inspections, revenue audit, credit portfolio audit etc. in large
sized banks.
24. RATE OF INTEREST PAYABLE ON CURRENT ACCOUNTS Primary
(urban) co-operative banks may, at their discretion, pay interest
at a rate not exceeding half per cent per annum on current
accounts. As the discretionary provisions generally lead to
increase in cost of such deposits, banks are encouraged not to pay
interest on current accounts. Interest on current account balances,
wherever paid, shall be calculated on a daily product basis and
paid on quarterly or longer rests.
25. RATE OF INTEREST PAYABLE ON SAVINGS DEPOSITS Banks should
pay interest on domestic savings deposits at the rates specified in
the Annex 1 to this Circular. With effect from November 25, 2011,
the interest rate on saving bank deposit for resident Indian has
been deregulated. Accordingly, banks are free to determine, their
savings bank deposit interest rate. Interest on balances in savings
bank accounts should be calculated on a daily product basis. Such
interest should be paid at quarterly or longer rests. Banks may
continue to credit the interest to the savings bank accounts frozen
by enforcement authorities on a regular basis.
26. ROLE OF DIRECTORS - DOs AND DONTS DOs (a) Discipline &
Involvement (b) Constructive & Developmental Role (c) Business
Specific Contribution DONTS (a) Non-Interference (b) No Sponsorship
(c) Confidentiality
27. REFERENCES RBI Website (www.rbi.org.in) Links referred are
: http://rbi.org.in/scripts/BS_ViewMasterCirculardet
ails.aspx?did=342
http://rbi.org.in/scripts/BS_ViewMasterCirculardet
ails.aspx?did=340