Annual Report

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Date : Aug 30, 2017
Annex: Chronology of Major Policy Announcements: July 2016 to June 2017*
Date of Announcement Policy Initiative
Monetary Policy Department
August 5, 2016 Inflation target was notified for the period from August 5, 2016 to March 31, 2021.
September 29 The constitution of the Monetary Policy Committee was notified.
October 4 The policy repo rate was reduced by 25 bps to 6.25 per cent.
November 26 An incremental CRR (ICRR) of 100 per cent on the increase in NDTL between September 16, 2016 and November 11, 2016 was introduced from the fortnight beginning November 26, 2016.
December 7 The ICRR was withdrawn from the fortnight beginning December 10, 2016.
February 8, 2017 The stance of monetary policy was changed from accommodative to neutral while the policy rate was kept on hold.
April 6 The LAF corridor was narrowed from 100 bps to 50 bps. Accordingly, the reverse repo rate was changed from 5.75 per cent to 6.0 per cent, and the marginal standing facility (MSF) rate from 6.75 per cent to 6.50 per cent.
June 7 The SLR was reduced from 20.5 per cent of NDTL to 20.0 per cent of NDTL from the fortnight beginning June 24, 2017.
Financial Inclusion and Development Department
July 28, 2016 The limit of bank loans of less than 24 months to MFIs for on-lending under the priority sector lending was raised to ₹30,000 from ₹15,000.
August 4 Banks were advised that the Government approved the implementation of the interest subvention scheme for 2016-17 for short term crop loans up to ₹3 lakh.
August 11 Factoring transactions ‘with recourse’ basis including through TReDS upon its operationalisation were classified as part of the priority sector lending.
August 25 Banks were communicated to implement the revised guidelines on interest subvention scheme under the Deendayal Antyodaya Yojana -National Rural Livelihoods Mission for 2016-17.

Banks were advised to instruct their branches to feed the relevant data including land and crop details of all loanee and non-loanee farmers, availing crop insurance through their branches in the unified portal for crop insurance.

Banks were advised about the revised reporting format for furnishing details on Financial Literacy Centres.
September 1 Banks were advised that the applicable system-wide average figure of lending to non-corporate farmers for computing achievement under the priority sector lending for 2016-17 would be 11.70 per cent.
September 29 Banks were advised about the government strategy, as announced in the Union Budget 2016-17, to achieve the goal of doubling the income of farmers by 2022.

Instructions on submission of data on credit assistance provided to the members of minority communities were issued to banks.
October 6 Banks were advised about the modified quarterly/annual reporting formats for reporting priority sector lending.
October 13 Banks were issued the modified instructions on asset/accident/health insurance under the revised KCC scheme.
December 26 Banks were advised about the decision of the Government to provide an additional grace period of 60 days, for prompt repayment incentive of 3 per cent, to those farmers whose crop loan dues were falling due during November- December, 2016.
December 29 Banks were advised to use the facility of providing ‘additional working capital limit’ (approved by their Boards) to their MSE borrowers up to March 31, 2017, in view of the withdrawal of legal tender status of Specified Bank Notes (SBNs).
February 16, 2017 Lead bank responsibility in respect of 21 new districts created in Telangana was assigned to various banks.
March 2 The policy on conduct of camps by FLCs and rural branches of banks was revised with a focus on going digital.
March 9 Lead bank responsibility in respect of seven new districts created in Manipur was assigned to various banks.
March 30 Following the merger of associate banks with the State Bank of India (SBI), effective April 1, 2017, SLBC convenorship of Telangana was assigned to SBI. Lead bank responsibility of districts was also assigned to SBI.
April 13 Banks were advised to observe June 5-9, 2017 as financial literacy week with focus on four broad themes, viz. KYC, Exercising Credit Discipline, Grievance Redressal and Going Digital (UPI and *99#).
April 27 Lead bank responsibility of a new district created in Haryana was assigned to Punjab National Bank.
May 25 Lead Bank responsibility of the three newly created districts in Arunachal Pradesh was assigned to SBI.

Interest subvention scheme on short term crop loans upto ₹3 lakh extended on the interim basis for 2017-18.
June 8 Banks were advised to align the roadmap for unbanked villages having population more than 5000 with the revised guidelines on Branch Authorisation Policy issued by Department of Banking Regulation, Reserve Bank.
June 15 Lead Bank responsibility of one new district created in West Bengal was assigned to SBI.
Financial Markets Regulation Department
July 28, 2016 Demat account holders of NSDL and CDSL were allowed to trade in G-sec on the NDS-OM platform through their respective depository participant banks which should be SGL Account Holders and direct members of NDS-OM and CCIL.
August 25 Brokers registered with SEBI and authorised as market makers in corporate bond were allowed to undertake repo/ reverse repo in corporate debt securities.

Eligibility conditions and other terms of participation in market repo in G-sec were relaxed.

Towards greater predictability, auction results would be published by the Reserve Bank at 1.30 pm for T-bills and 2 pm for G-sec. Otherwise, they would be announced at half hourly intervals thereafter.
September 30 The limits for investment by FPIs in central G-sec for the next half year were proposed to be increased in two tranches, each of ₹100 billion from October 3, 2016 and January 2, 2017 respectively. The limits for SDLs would also be increased in two tranches, each of ₹35 billion, over the same period.
October 20 FPIs would be allowed to trade G-sec in the secondary market through the primary members of NDS-OM including the web-module, effective December 1, 2016.
October 28 Money market futures based on any money market instrument/interest rate, over and above 91-day T-Bill futures which have already been allowed, were permitted.
November 17 The investment basket of eligible instruments by FPIs under the corporate bond route was expanded to include (i) unlisted corporate debt securities in the form of non-convertible debentures/bonds and (ii) certain specified securitised debt instruments.
December 27 FPIs were allowed to transact non-convertible debentures/bonds issued by Indian companies either directly or in any manner as per the approved market practice.
December 29 Interest rate options would be introduced, effective January 31, 2017.
February 2, 2017 NRIs were allowed access to the exchange traded currency derivatives market to hedge the currency risk arising out of their investments in India.
February 16 Banks were advised to stop sending the hardcopy of the fortnightly return on FRA/IRS to the Reserve Bank. The existing procedure for reporting OTC foreign exchange and interest rate derivative transactions to the trade repository of CCIL would continue.
March 31 The limits for investment by FPIs for Q1 2017-18 were proposed to be increased by ₹110 billion and ₹60 billion, respectively for central G-sec and SDLs.
June 1 The LEI system for all participants in the OTC markets for rupee interest rate derivatives, foreign currency derivatives and credit derivatives in India was decided to be implemented in a phased manner. Accordingly, all current and future participants would be required to obtain the unique LEI code as per the indicated respective timelines.
Financial Markets Operations Department
November 10, 2016 The valuation of collateral under LAF was changed from face value to market value, based on FIMMDA prices, effective November 26, 2016.

Re-repoing of securities received under reverse repo was introduced, effective November 26, 2016.
November 25 Oil bonds issued by the government were made eligible securities for repo, reverse repo and MSF, effective November 28, 2016.

The margin requirement for the securities provided by RBI in reverse repo was withdrawn effective November 28, 2016.
April 12, 2017 Security substitution was introduced effective April 17, 2017, for securities placed as collateral under LAF.
Foreign Exchange Department
July 7, 2016 AD Banks were allowed to discontinue submission of invocation of bank guarantee for service imports, but were advised to maintain records.
October 06 Category-I banks were advised that IDPMS would go live effective October 10, 2016 and they should use IDPMS for reporting and monitoring of import transactions.
October 20 Three FEMA notifications : 14, 16 and 17 relating to the manner of receipts and payments were combined and a revised notification : 14 R was issued.

Designated AD category-I banks were delegated powers for extension of matured but unpaid ECB and for conversion of such ECB into equity.

Payments permitted for trade transactions under the rupee drawing arrangements should not exceed ₹1.5 million per transaction.

100 per cent FDI was permitted under the automatic route in other financial services regulated by any financial sector regulator, effective September 9, 2016.

Any Foreign Venture Capital Investor (FVCI) which obtained registration under the SEBI (FVCI) Regulations, 2000, would not require approval from the Reserve Bank; and was allowed to invest in any Indian start-ups.

‘Total foreign investment’ in an Indian company was to be calculated as sum total of direct and indirect foreign investments, effective February 15, 2016.

100 per cent foreign investment was permitted in limited liability partnership (LLP) for sectors where 100 per cent FDI was allowed, and foreign investment in specified plantation sectors was put under automatic route.

Rent income on lease of a property, not amounting to transfer, would not be considered as ‘real estate business’ for foreign investment purpose.

Precise definition of manufacturing for purpose of foreign investment was notified.

Entities engaged in single brand retail trading through brick and mortar stores were permitted to undertake retail trading through e-commerce.
October 24 A wholly owned subsidiary, set up in India by a non-resident entity, operating in a sector where 100 per cent foreign investment was allowed under the automatic route and there were no FDI linked conditionalities, might issue FDI compliant instruments to the said non-resident entity against pre-incorporation/pre-operative expenses incurred by the said non-resident entity up to a limit of five per cent of its capital or US$ 500,000 whichever was less.
October 27 Asset Reconstruction Companies were allowed to receive foreign investment up to 100 per cent under automatic route. The total shareholding of a single FII/FPI should be below 10 per cent of the total paid-up capital. FIIs/FPIs could invest up to 100 per cent in the security receipts issued by ARCs.

Startups were allowed to raise ECBs up to US$ 3 million or equivalent per financial year either in INR or in any convertible foreign currency or a combination of both.
November 3 Indian banks were permitted to issue within the limit set for foreign investment in corporate bonds: (i) perpetual debt instruments qualifying as Additional Tier 1 capital and debt capital instruments qualifying as Tier 2 capital, by way of rupee denominated bonds overseas; and (ii) long term rupee-denominated bonds overseas for financing infrastructure and affordable housing.
November 4 49 per cent foreign investment was permitted under automatic route in pension funds.
November 7 Wherever hedging was mandated by the Reserve Bank, ECB borrower was to cover principal as well as coupon through financial hedges for minimum tenor of one year. Natural hedge, in lieu of financial hedge, was to be considered only to the extent of offsetting projected cash flows/revenues in matching currency, net of all other projected outflows. Any other arrangements/structures, where revenues were indexed to foreign currency, would not be considered as natural hedge.
November 9 Older series banknotes in the denominations of ₹500 and ₹1000 were allowed to be exchanged to the extent of ₹5000 until November 11, 2016 at international airports for arriving and departing passengers and for foreign tourists.
November 11 Authorised persons were allowed to issue pre-paid instruments to foreign tourists in exchange of foreign exchange tendered in terms of the instructions issued by the Reserve Bank.
November 17 Foreign Exchange Management (Insurance) Regulations, 2015 were rationalised and the memorandum on general/ health insurance and life insurance in India was modified.
November 25 Foreign tourists were permitted to exchange foreign exchange for Indian currency notes up to a limit of ₹5000 per week till December 15, 2016.
December 07 Foreign investment limits in sectors such as agriculture and animal husbandry, manufacturing and cable networks were amended.
January 10, 2017 Residents outside India (except from Pakistan or Bangladesh) were allowed to purchase convertible notes issued by an Indian startup for an amount of ₹2.5 million or more in a single tranche.

49 per cent foreign investment was permitted under automatic route in infrastructure companies in securities markets, viz., stock exchanges, commodity derivative exchanges, depositories and clearing corporations.
January 12 The practice of submission of hardcopy of evidence of import documents was discontinued from December 1, 2016.
January 25 Indian entities were prohibited from direct investment in an overseas entity (joint venture/wholly owned subsidiary/step down subsidiary) located in countries identified by the Financial Action Task Force as “non-co-operative countries and territories”.
February 2 Regional Offices were delegated powers to compound contravention/s regarding delay in filing the Annual Return on Foreign Liabilities and Assets by all Indian companies which had received foreign direct investment in the previous year(s) including the current year.
February 16 Multilateral and regional financial institutions, where India is a member country, were permitted to invest in Rupee denominated bonds.
February 22 The standard operating practice for movement of cash (foreign exchange), amongst authorised dealers, full-fledged money changers, their offices/branches, their customers and their franchisees during elections, was announced.
March 3 Foreign investment was permitted under automatic route either through capital contribution or by acquisition/transfer of profit shares in the capital structure of an LLP operating in sectors/activities where 100 per cent FDI was allowed through automatic route and there were no FDI-linked performance conditions.
March 9 100 per cent foreign investment was permitted under automatic route in B2B e-commerce activities and market place model of e-commerce.
March 30 Limits operating prior to November 8, 2016 for purchase of foreign exchange from foreign citizens, were restored.
May 15 Reporting mechanism was introduced for issuance and transfer of convertible notes (CNs) by start ups to a person resident outside India.
May 19 Prior permission of the Reserve Bank was not required for closure of vostro accounts and remitting back funds (in foreign currency), if any, under the rupee drawing arrangement.
June 7 The framework for issuance of masala bonds was revised in respect of maturity period, all-in-cost ceiling and recognised lenders.
June 23 Retention of duplicate copies of exchange control copies of the shipping bills at authorised dealer bank was discontinued.
Department of Banking Regulation
July 8, 2016 All regulated entities (REs) including SCBs were advised to upload the KYC data with CERSAI on new individual accounts opened on or after July 15, 2016 for the live run of the Central KYC Records Registry. REs which were not ready to join CKYCR were advised to prepare their systems in a time bound manner. KYC norms for FPIs were revised.
July 21 Banks were permitted to reckon G-secs held by them up to another 1 per cent of their NDTL under the facility to avail liquidity for the liquidity coverage ratio (LCR) within the mandatory SLR requirement as level 1 HQLA for the purpose of computing their LCR. With this, the total carve-out from SLR amounted to 11 per cent of banks’ NDTL.
August 4 Banks were advised to have an appropriate and transparent policy on dishonour of cheques approved by the boards or committees.

All-India Term Lending and Refinancing Institutions - Exim Bank, NABARD, NHB and SIDBI - were advised to follow the Indian Accounting Standards as notified under the Companies (Indian Accounting Standards) Rules, 2015 for financial statements beginning April 01, 2018.
August 11 Banks were advised to prepare a comprehensive policy for implementation of the recommendations of the Committee on Capacity Building in respect of certification of staff by end-December 2016 and the same be implemented under the guidance and monitoring of the board.
August 25 The aggregate exposure limit towards partial credit enhancement for a given bond issue from the banking system was increased to 50 per cent from 20 per cent of the bond issue size, with a limit up to 20 per cent of the bond issue size for an individual bank.

Cash settlement of only the change in mark-to-market value of the restructured derivative contract was clarified as a requirement.

All unrated claims on corporates, Asset Financing Companies (AFCs), and NBFC-IFCs having aggregate exposure of more than ₹2 billion from the banking system would attract a risk weight of 150 per cent, effective June 30, 2017. However, such claims on these entities having aggregate exposure of more than ₹1 billion from the banking system, which were rated earlier and turned unrated subsequently would attract a risk weight of 150 per cent with immediate effect.

Guidelines were issued on enhancing credit supply for large borrowers through market mechanism, allowing banks to subscribe to bonds issued by specified borrowers over and above normally permitted lending limit in 2017-18.
September 01 An improved framework governing sale of stressed assets by banks to SCs/RCs/other banks/NBFCs/financial institutions was put in place to strengthen banks’ ability to resolve such assets effectively.

Credit Information Companies were advised to provide access in electronic format, upon request and after due authentication of the requester, to one free full credit report including credit score, once in a calendar year, to individuals whose credit history was available with them.
September 08 Banks were advised to invariably accept cash, irrespective of amount, over the counters from all declarants who desired to deposit cash at the counters, including deposits under the Income Declaration Scheme, 2016 through challan ITNS- 286, while ensuring compliance with the KYC requirements.
September 29 New ‘Certificate of Registration’ for carrying on the business of credit information was granted to the Credit Information Bureau (India) Limited which changed its name to Transunion CIBIL Limited.
September 29 Lending institutions were advised to consider publication of the photographs of only those borrowers, including proprietors/partners/directors/guarantors of borrower firms/companies, who were declared as wilful defaulters following the mechanism set out by the Reserve Bank.
October 04 Bank rate was reduced by 25 bps to 6.75 per cent, effective October 04, 2016.
October 06 Operating guidelines for Payments Banks and Small Finance Banks were issued. Their prudential regulatory framework was drawn largely from the Basel standards incorporating suitable calibrations.
October 13 SLR securities acquired from the Reserve Bank under LAF were made eligible assets for SLR maintenance from October 3, 2016.
October 20 New ‘Certificate of Registration’ was granted to the Experian Credit Information Company of India Private Ltd. for carrying on the business of credit information.

Exposure to HFCs was advised to be risk weighted as per the rating assigned by the rating agencies registered with SEBI and accredited by the Reserve Bank, in a manner similar to that of corporates, AFCs, NBFC-IFCs and NBFC-IDFs as prescribed.
November 03 Banks were allowed to raise funds through issuance of rupee denominated bonds overseas for the specified purposes.
November 10 Changes were made in various regulatory measures to deal with stressed assets.

The asset classification norms were revised for loans under the Scheme for Sustainable Structuring of Stressed Assets where there was no change of promoters.

Guidelines in line with the BCBS were issued, effective April 1, 2018, for measuring exposure for counterparty credit risk arising from derivatives transaction which would replace the current exposure method being used by banks.

Final guidelines on capital requirements for banks’ exposures to central counter parties was issued, effective April 1, 2018.

IBUs were permitted to undertake certain activities/transactions with resident and non-resident entities other than individuals including HNIs/retail customers.
November 21 Consequent upon withdrawal of Specified Bank Notes, it was decided to provide an additional 60 days for a regulated entity concerned for recognition of a loan account as substandard in select cases.
November 24 It was decided to broaden the fields of specialisation to include (i) information technology, (ii) payment & settlement systems, (iii) human resources, (iv) risk management and (v) business management, for appointment of director in banks’ boards (excluding RRBs).
December 01 Banks and select All India Term-Lending and Refinancing Institutions were advised to follow the definition of ‘infrastructure lending’ as published by the government in Gazette Notifications.

After examining the feedback on draft large exposure framework, final guidelines were issued, effective April 1, 2019,
December 06 Regulated entities were advised to take steps for preserving the customer account information, including preservation of records pertaining to the identification of the customers and their addresses obtained while opening the account, for at least five years after the business relationship ended.
December 08 It was decided to allow One Time Pin (OTP) based e-KYC subject to certain restrictions. SCBs were advised to invariably upload the KYC data pertaining to all new individual accounts opened on or after January 1, 2017, with the Central KYC Records Registry.

The KYC Directions 2016 were amended in terms of the definition of non-profit organisation and the KYC procedure.
December 15 Regulated entities were advised to strictly comply with the requirement of KYC verification by concurrent/internal audit system and conditions for operating small accounts. BSBD accounts, which are not KYC compliant were to be treated as ‘small accounts’ and subjected to the limitations applicable to such accounts.
December 28 It was decided to provide 30 days in addition to 60 days for recognition of certain categories of loans as substandard by the regulated entities.
February 02, 2017 The extant instructions for coupon payment on perpetual debt instruments eligible for AT 1 capital were modified to permit payment of coupons out of statutory/available reserves subject to certain conditions.
February 16 It was decided to increase the quantum of gold loan with bullet repayment plan that could be granted by RRBs from ₹0.1 million to ₹0.2 million subject to certain conditions.
April 06 Bank rate was reduced by 25 bps to 6.50 per cent, effective April 06, 2017.
April 10 The list of permissible activities for IFSC Banking Units (IBUs) was amended.
April 18 Repatriation of accumulated profits should not be considered by banks as disposal or partial disposal of interest in non-integral foreign operations as per AS 11 [The Effects of Changes in Foreign Exchange Rates].

Banks were allowed to participate in Real Estate Investment Trusts and Infrastructure Investment Trusts subject to conditions.

Banks were advised to make suitable disclosures in the notes to accounts to the annual financial statements as per the prescribed format, wherever either (a) the additional provisioning requirements assessed by the Reserve Bank exceeded 15 per cent of the published net profits after tax for the reference period or (b) the additional gross NPAs identified by the Reserve Bank exceeded 15 per cent of the published incremental gross NPAs for the reference period, or both.

Banks were advised to put in place a board-approved policy for making additional provisions for standard assets at rates higher than the regulatory minimum, based on the evaluation of risk and stress in various sectors. Board of Directors might review the telecom sector latest by June 30, 2017.
April 27 Banks were advised to lay down a board-approved policy clearly defining the role and responsibilities of the chief risk officer.
May 05 To facilitate timely decision making, banks were advised that the decisions agreed upon by a minimum of 60 per cent of creditors by value and 50 per cent of creditors by number in the JLF would be the basis for deciding the corrective action plan.
May 11 RRBs were advised to submit Form-VIII returns in Extensible Business Reporting Language (XBRL) from April 2017.
May 18 SCBs (excluding RRBs) were advised to stipulate minimum qualifications and experience for the posts of chief financial officer and chief technology officer, while inviting applications for the posts.

In the books of partial credit enhancement provider, capital requirement might be recalculated without reference to the constraints of capital floor and difference in notches, if the reassessed standalone credit rating at any time during the life of the bond showed improvement over the corresponding rating at the time of bond issuance. Corporate bonds were to be rated by a minimum of two external credit rating agencies at all times and rating reports, both initial and subsequent, should disclose both standalone credit rating as well as the enhanced credit rating.

Guidelines were revised on branch authorization, clarifying on banking outlet and harmonising the treatment of different forms of banking presence for the purpose of opening outlets in underserved areas.
May 22 The Reserve Bank outlined the action plan to implement the Banking Regulation (Amendment) Ordinance, 2017, which empowered the Bank to issue directions to any banking company or banking companies to initiate insolvency resolution process in respect of a default, under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC).
June 7 As a countercyclical measure, LTV ratios, risk weights and standard asset provisioning rate for individual housing loans were revised.
June 13 Banks were permitted to use the ratings assigned by the INFOMERICS Valuation and Rating Pvt. Ltd., in addition to the existing six credit rating agencies for assigning risk weights to credit exposures for capital adequacy assessment under the Basel framework.

The Internal Advisory Committee, constituted pursuant to the promulgation of the Banking Regulation (Amendment) Ordinance, 2017 to advise cases that might be considered for reference for resolution under the Insolvency and Bankruptcy Code, 2016 (IBC), held its first meeting on June 12, 2017. The committee agreed to focus on large stressed accounts at this stage and also arrived at an objective, non-discretionary criterion for referring accounts for resolution under the IBC.
June 22 Banks were advised to provide adequate relevant details of transactions in the passbooks and/or statements of accounts and also incorporate information about ‘deposit insurance cover’ along with the limit of coverage, subject to change from time to time, upfront in the passbooks.

The Overseeing Committee (OC), constituted by IBA, was brought under the aegis of the Reserve Bank and the membership of the same was enlarged to five pursuant to the Banking Regulation (Amendment) Ordinance, 2017. The reconstituted OC would work with an expanded mandate to review resolution of cases where the aggregate exposure of the banking sector to the borrowing entity was greater than ₹5 billion.
June 29 Instructions were issued on limits on balances in customer accounts with payment banks under sweep out arrangements with other banks wherein payment banks were allowed to act as Business Correspondents.
Department of Cooperative Bank Regulation
July 07, 2016 Co-operative banks fulfilling certain criteria were allowed to issue/redeem Long Term (Subordinated) Deposits without prior approval of the Reserve Bank.
July 14 State/Central co-operative banks were permitted to invest in non-SLR instruments.
September 01 Salary earners’ UCBs were permitted to grant advances against term deposits of non-members.
April 28, 2017 Guidelines were issued on merchant acquisition for card transactions.
May 25 Regulatory requirements for issuance of prepaid payment instrument were issued.
Department of Non-Banking Regulation
July 28, 2016 Guidelines for relief measures by banks in the areas affected by natural calamities were extended, mutatis mutandis, to NBFCs.
September 02 Master Directions for NBFC-Account Aggregator were issued.
February 02, 2017 NBFC-MFIs were advised to ensure that the average interest rate on loans sanctioned during a quarter did not exceed the average borrowing cost during the preceding quarter plus the margin, within the prescribed cap.
March 02 For the purpose of definition of ‘infrastructure lending’, NBFCs were advised to go by the Gazette Notifications issued by the government from time to time.
March 09 NBFCs were advised that for disbursal of loan in cash, the requirements, under the Income Tax Act, 1961, as amended from time to time, would be applicable.
April 28 Minimum net owned fund requirement for ARCs was fixed at ₹ 1 billion on an ongoing basis, effective April 28, 2017.
Department of Banking Supervision
July 01, 2016 Master Directions on frauds – classification and reporting by commercial banks and select FIs consolidated and updated all the instructions issued on the subject up to June 30, 2016.
July 28 Reporting formats of half yearly/quarterly review of accounts of PSBs were revised.
August 25 Banks were permitted to engage the services of their retired officials for assisting in internal audit subject to conditions.
April 13, 2017 The existing PCA framework for banks was revised and set to be implemented from April 1, 2017, based on the financials of banks for the year ended March 31, 2017. The framework would be reviewed after three years.
April 13 PSBs were advised to formulate a fair and transparent policy and procedure in the matter of selection and appointment of statutory branch auditors and host the same on their websites.
April 20 Banks were advised that while implementation of the Ghosh Committee recommendations need not be reviewed by the Audit Committee of the Board (ACB), they may ensure that it is complete, sustained and appropriately factored for internal inspection/audit purposes.
Department of Non-Banking Supervision
June 08, 2017 Master Direction was issued on information technology framework for the NBFC Sector, focussing on IT governance/ policy/operations/services outsourcing, information and cyber security, IS audit and business continuity planning.
Consumer Education and Protection Department
June 16, 2017 The Banking Ombudsman Scheme 2006 was amended, effective July 1, 2017.
Internal Debt Management Department
Dec 17, 2016 The government launched a tax amnesty scheme, ‘Pradhan Mantri Garib Kalyan Deposit Scheme, 2016’, which would be available from December 17, 2016 to March 31, 2017.
Jan 30, 2017 The discount rate on 14 day ITBs was re-fixed at reverse repo rate minus 200 bps with a ceiling of 5 per cent and the rediscount rate at reverse repo rate minus 150 bps with a ceiling of 5.5 per cent.
Department of Currency Management
July 20, 2016 A scheme of penalties for bank branches based on performance in rendering customer service to the members of public was introduced.
September 15 The Reserve Bank would issue banknotes of ₹20 with numerals in ascending size in number panels and without intaglio printing
September 23 The Reserve Bank would issue banknotes of ₹50 with numerals in ascending size in number panels and without intaglio printing.
November 08 The legal tender status for banknotes of the Mahatma Gandhi Series in the denominations of ₹500 and ₹1000 was withdrawn from November 9, 2017.

Banknotes in the denominations of ₹500 and ₹2000 in Mahatma Gandhi (New) Series were introduced.
November 14 The Reserve Bank clarified that the scheme of exchange/deposit of Specified Bank Notes (SBNs) was not allowed by DCCBs.
December 31 Facility for exchange of SBNs within a grace period was introduced for NRIs and citizens, who were abroad during November 9, 2016 to December 30, 2016.
January 30, 2017 Limits imposed earlier on cash withdrawals from bank accounts and ATMs stand completely withdrawn and status quo ante restored.
February 08 Removal of limits on withdrawal of cash from saving bank account effected in phases and all limits to be withdrawn effective March 13, 2017.
Department of Payment and Settlement Systems
September 01, 2016 In order to enhance transparency in Merchant Discount Rates (MDR) applicable at merchant level, acquiring banks were advised to ensure that MDR are clearly unbundled for different categories of cards and also to educate the merchants regarding this at the time of acquisition.
September 29 Banks were advised to ensure that all new card acceptance infrastructure deployed with effect from January 1, 2017 are enabled for processing payment transactions using Aadhaar-based biometric authentication also.
October 20 Framework was released for imposition of penalty on authorised payment systems operators/banks to cover offenses such as (i) contravention of provisions of the Act, (ii) non-compliance of directions or order made there under and (iii) violations of terms and conditions of authorisation.
November 22 As part of special measures to incentivise electronic payments, the limit of semi-closed Prepaid Payment Instruments (PPIs) issued with minimum details was enhanced from ₹10000 to ₹20000, and dispensation given for higher ceiling for funds transfers from PPIs to bank account for PPIs issued to small merchants.
December 02 Extension of timeline for Aadhaar-based authentication for all new card acceptance infrastructure for processing payment transactions till June 30, 2017.
December 06 Relaxation in Additional Factor of Authentication for payments up to ₹2000 for card network solutions.
December 09 To maintain a robust and fully secure digital ecosystem, the technical audit of PPI issuers was introduced.
December 16 Following the withdrawal of legal tender characteristics of existing ₹500 and ₹1000 Bank Notes (Specified Bank Notes – SBN), in order to facilitate wider acceptance of card payments, rationalisation of Merchant Discount Rate (MDR) for transactions upto ₹2000 was introduced.
December 27 To facilitate greater adoption of digital payments, the instructions contained in paragraph 7.9 of Master Circular on Issuance and Operations of Prepaid Payment Instruments was modified, permitting Banks to issue PPIs to entities for onward issuance to their staff/employees/contract workers etc.
December 30 White Label ATM Operators (WLAOs) were allowed to source cash from retail outlets subject to certain conditions.
May 08, 2017 To enhance the efficiency of the payment system and add to customer convenience, half hourly settlement of National Electronic Funds Transfer (NEFT) was introduced.
Department of Information Technology
July 4, 2016 The Bank’s IT Subsidiary - Reserve Bank Information Technology Pvt Ltd. (ReBIT) was incorporated on July 4, 2016 to take care of the IT requirements including cyber security needs of the Reserve Bank and its regulated entities.
*: Indicative in nature and details available on the Reserve Bank’s website.