vijayaraghavan’s notes on banking- for promotion test 2016 ... › materials ›...

By Vijayaraghavan R updated on 15.09.16 1

Vijayaraghavan’s Notes on Banking- for Promotion Test 2016

Tidbits and Important Recap:

General Banking

Snippets on KYC Guidelines

Important points for easy recapitulation

1. Bank accounts can be opened with out introduction. 2. Documents required for opening bank account-One Photo, Id proof and

address proof. Customers who are minors have to submit fresh photograph on becoming major.

3. GOI notified 6 documents as Officially Valid Documents ( OVD) Viz Passport, Driving Licence, Voters’ Identity Card, PAN Card, Aadhaar Card issued by UIDAI and NREGA Job Card.

4. Should submit OVD for id proof. If Id proof carries the current address, it is enough to submit one proof, other wise address proof also to be furnished.

5. If OVD could not be provided , Either Small account can be opened or based on Bank discretion a Normal account can be opened by submitting a copy of any one of the following documents as Proof of Identity (PoI): (i) Identity card with person’s photograph issued by Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions; or

(ii) letter issued by a Gazetted officer, with a duly attested photograph of the person.

For Proof of Address (PoA), you may submit the following documents:

i. Utility bill, which is not more than two months old, of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);

ii. Property or Municipal Tax receipt; iii. Bank account or Post Office savings bank account statement; iv. Pension or family Pension Payment Orders (PPOs) issued to retired

employees by Government Departments or Public Sector Undertakings, if they contain the address;

v. Letter of allotment of accommodation from employer issued by State or Central Government departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies. Similarly, leave and license agreements with such employers allotting official accommodation; and

vi. Documents issued by Government departments of foreign jurisdictions or letter issued by Foreign Embassy or Mission in India.

6. Small accounts, with a initial validity period of 1 year can be opened with


photo and with out id /address proof.( Max Bal 50,000/- total credits in a year not to exceed Rs1 lac, total withdrawal per month not to exceed Rs 10,000)

7. Bank account in a different location can be opened if the permanent address proof produced carries an address in a different location, based on the self declaration of the customer( to be used for communication purpose )

8. PAN number needs to be quoted for transactions, such as, account opening, transactions above Rs.50,000 ( cash/non cash)

9. KYC exercise needs to be done for all those who want to make domestic remittances of Rs. 50,000 and above and all foreign remittances.

10. Demand Draft/Payment Order/Travelers Cheques for Rs.50,000/- and above can be issued only by way of debiting the customer's account or against cheques.

a. Different periodicities have been prescribed for updation of KYC records depending on the risk perception of the bank. KYC is required to be done at least every two years for high risk customers, at least every eight years for medium risk customers and ten years for low risk customers. This exercise would involve all formalities normally taken at the time of opening the account. If there is no change in status with respect to the identity (change in name, etc.) and/or address, such customers who are categorized as ‘low risk’ by the banks may now submit a self-certification to that effect at the time of periodic updation. (This address may be verified by the bank through ‘positive confirmation’ such as acknowledgment of receipt of (i) letter, cheque books, ATM cards; (ii) telephonic conversation; (iii) visits; etc. In the event of change in this address due to relocation or any other reason, customers may intimate the new address for correspondence to the bank within two weeks of such a change.)

11. In case of change of address of such ‘low risk’ customers, they could merely forward a certified copy of the document (proof of address) by mail/post, etc. Physical presence of such low risk customer is not required at the time of periodic updation.

12. At the time of periodic updation, if KYC documents are not provided, bank has the option to close the account, after imposing partial freezing of the account under due notice( 3 months notice period+3 Months reminder period). Partial freezing- Only credits, no debits. After 6 months of Partial freezing account becomes Inoperative with no debit and no credits)

13. In case the person who proposes to open an account does not have an OVD as ‘proof of address’, such person shall provide OVD of the relative as provided at sub-section 77 of Section 2 of the Companies Act, 2013, read with Rule 4 of Companies (Specification of definitions details) Rules, 2014, with whom the person is staying, as the ‘proof of address’. A declaration from the relative that the said person is a relative and is staying with him/her shall be obtained.

14. Partial freezing is imposed in the following ways:

Banks have to give due notice of three months initially to the customers before exercising the option of ‘partial freezing’.


After that a reminder for further period of three months will be issued. Thereafter, banks shall impose ‘partial freezing’ by allowing all credits and

disallowing all debits with the freedom to close the accounts. If the accounts are still KYC non-compliant after six months of imposing initial

‘partial freezing’ banks shall disallow all debits and credits from/to the accounts, classifying them inoperative.

Meanwhile, the account holders can revive accounts by submitting the KYC documents.

15. Documents to be given for Name Change: (If the name is changed and the person is not having any OVD in the new name-)

A copy of the marriage certificate issued by the State Government or Gazette notification indicating change in name together with a certified copy of the ‘Officially Valid Documents’ in the prior name of the person is to be furnished for opening of account in cases of persons who change their names on account of marriage or otherwise.

16. Banks required to categorize their customers based on risk assessment and classify them into ‘low’, ‘medium’ and ‘high’ risk categories depending on their AML risk assessment. Banks do not inform customers about this risk categorisation.

17. e-KYC refers to electronic KYC:e-KYC is possible only for those who have Aadhaar numbers. While using e-KYC service, persons to authorise the Unique Identification Authority of India (UIDAI), by explicit consent, to release your identity/address through biometric authentication to the bank branches/business correspondent (BC). The UIDAI then transfers your data comprising r name, age, gender, and photograph electronically to the bank. Information thus provided through e-KYC process is permitted to be treated as an ‘Officially Valid Document’ under PML Rules and is a valid process for KYC verification.

18. Period of preservation of KYC records: Different periodicities have been prescribed for updation of KYC records depending on the risk perception of the bank. KYC is required to be done at least once in two years for high risk customers, once in eight years for medium risk customers and once in ten years for low risk customers. This exercise would involve all formalities for KYC normally taken at the time of opening the account.

19. For Minor Accounts- Documents required -Date of Birth proof of the Minor + KYC of the Parent./guardian ( even for Self operated Minor accounts above 10 years)

IFRS & Ind As. Time limit for introduction of Ind AS for Scheduled Commercial Banks in India.

IFRS-International Financial Reporting system. Ind AS-Indian accounting Standards.


01.01.2018

RBI Governor-Dr Urjit R.Patel

Policy Rates-Repo-6.50%, Reverse Repo- 6.00%, MSf-7%, Bank Rate-7%

CRR-4%, SLR-21%

Range of MCLR (overnight ) rates in SCBs-8.85% to 9.15%

Differentiated Banks

The Payments Banks and the Small Finance Banks are called Differentiated Banks.

Recommended by Committee: Shri Nachiket Mor,( , on Comprehensive Financial Services for Small Businesses and Low-Income Households)

RBI recently granted ‘in principle’ licenses to 11 entities to form Payments Banks.

The objective of setting up of Payments Banks will be to further financial inclusion; the strategies will be by providing (i) small savings accounts and (ii) payments / remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users. The scope of the activities permitted for the Payment Banks included a. Acceptance of demand deposits. Payments Bank will initially be restricted to holding a maximum balance of ₹ 1 lakh per individual customer, b. Issuance of ATM / debit cards c. Payments and remittance services through various channels and some ancillary activities.

The deposits collected by them can be only in current or savings account; they cannot accept fixed deposits. The payments banks are prohibited from lending activity. They can deploy the deposits largely in government securities only; a small portion, upto 25% of their deposits, can be held in deposits with other banks.

The public deposits in the Payments Banks will be covered by the deposit insurance of the DICGC. As the deposit ceiling is ₹ 1 lakh and the deposit insurance ceiling is also ₹ 1 lakh, it means that the depositors of the Payments Banks will be fully insured.

The payments bank will be required to have at least 25 per cent of physical access points including BCs in rural centres.

Sovereign Gold Bond Scheme 2015- Resident s- individuals, HUFs, trusts, universities, charitable institutions, Minors etc. Joint acs allowed. Denominations of one gram of gold and in multiples thereof. Minimum investment in the Bond shall be one gram with a maximum buying limit of 500 grams per person per fiscal year (April – March). In case of joint holding, the limit applies to the first applicant.

Gold Monetisation Scheme, 2015 The minimum deposit at any one time shall be 30 grams of raw gold (bars, coins, jewellery excluding stones and other metals). There is no maximum limit for deposit under the scheme.


Short Term Bank Deposit- The deposit will be made with the designated banks for a short term period of 1-3 years (with a roll over in multiples of one year) and will be treated as their on-balance sheet liability. The deposit will attract CRR and SLR requirements . The designated banks are free to fix the interest rates on these deposits. Redemption of principal and interest at maturity will, at the option of the depositor be either in Indian Rupee equivalent of the deposited gold and accrued interest based on the price of gold prevailing at the time of redemption, or in gold. The option in this regard shall be made in writing by the depositor at the time of making the deposit and shall be irrevocable: Medium and Long Term Government Deposit (MLTGD)- The deposit under this category will be accepted by the designated banks on behalf of the Central Government. This deposit will not be reflected in the balance sheet of the designated banks.

The Medium Term Government Deposit (MTGD) can be made for 5-7 years and Long Term Government Deposit (LTGD) for 12-15 years or for such period as may be decided by the Central Government from time to time.

The rate of interest on such deposit will be decided by Central Government and notified by Reserve Bank of India from time to time. The current rate of interest as notified by the Central Government are as under:

(i) On medium term deposit – 2.25% p.a.

(ii) On long term deposit – 2.50% p.a.

MTGD Lock in period-3 Years

LTGD Lock in period- 5 Years.

“Bulk Deposit” means : Single Rupee term deposits of Rupees one crore and above

BSBDA-'Basic Savings Bank Deposit Account' (BSBDA)?

i. The ‘Basic Savings Bank Deposit Account’ should be considered a normal banking service available to all.

ii. This account shall not have the requirement of any minimum balance.

iii. The services available in the account will include deposit and withdrawal of cash at bank branch as well as ATMs; receipt/credit of money through electronic payment channels or by means of deposit/collection of cheques drawn by Central/State Government agencies and departments;

iv. While there will be no limit on the number of deposits that can be made in a month, account holders will be allowed a maximum of four withdrawals in a month, including ATM withdrawals; and


v. Facility of ATM card or ATM-cum-Debit Card.

The above facilities will be provided without any charges. Further, no charge will be levied for non-operation/activation of in-operative ‘Basic Savings Bank Deposit Account’.

The existing facility available in a normal saving bank account of five free withdrawals in a month in other banks' ATMs , will not hold good for BSBDA.

A person can have only one account. No other SB account is possible. Subject to KYC. It is available to all customers of all income group. If to be opened on Simplified KYC then BSBDA- Small account to be opened. Norms for Small account.

i. Total credits in such accounts should not exceed one lakh rupees in a year.

ii. Maximum balance in the account should not exceed fifty thousand rupees at any time

iii. The total of debits by way of cash withdrawals and transfers will not exceed ten thousand rupees in a month

iv. Foreign remittances cannot be credited to Small Accounts without completing normal KYC formalities

v. Small accounts are valid for a period of 12 months initially which may be extended by another 12 months if the person provides proof of having applied for an Officially Valid Document.

vi. Small Accounts can only be opened at CBS linked branches of banks or at such branches where it is possible to manually monitor the fulfillments of the condition

Net worth of a Bank would comprise of Paid-up capital plus Free Reserves including Share Premium but excluding Revaluation Reserves, plus Investment Fluctuation Reserve and credit balance in Profit & Loss account, less debit balance in Profit and Loss account, Accumulated Losses and Intangible Assets. No general or specific provisions should be included in computation of net worth. Infusion of capital through equity shares, either through domestic issues or overseas floats after the published balance sheet date, may also be taken into account for determining the ceiling on exposure to capital market.

Ceiling for donations by Bank-1% of profit published in the previous year( Subject to exclusions like Contribution to PM Relief fund etc)

Payment of agency commission- Payments related to Pension-at Rs. 65 per transaction for handling pension computation, payment and related services(As per the norms followed by the


Government, a pensioner’s account should not have more than 14 credit transactions in a calendar year attributable to pension and related arrear payments) Payments other than Pension- on a turnover basis at 5.5 paise per Rs. 100/- Receipts- Physical mode-Rs 50/- per transaction. e-mode- Rs 12/- per transaction.

Mobile Banking: Transactions up to Rs 5000/- can be facilitated by banks without end-to-end encryption. Banks are permitted to offer mobile banking facility to their customers without any daily cap for transactions involving purchase of goods/services. However, banks may put in place per transaction limit depending on the bank’s own risk perception, with the approval of its Board. Funds Transfer: n case of cash out, the maximum value of such transfers shall be Rs 10,000/- per transaction. Banks may place suitable cap on the velocity of such transactions, subject to a maximum value of Rs 25,000/- per month, per beneficiary.

IMPS( Immediate Payment Services) Currently majority of interbank mobile fund transfer transactions are channelized through NEFT mechanism. Under NEFT, the transactions are processed and settled in batches, hence are not real time. Also, the transactions can be done only during the working hours of the RTGS system.

IMPS offers an instant, 24X7, interbank electronic fund transfer service through mobile phones. IMPS is an emphatic tool to transfer money instantly within banks across India through mobile, internet and atm which is not only safe but also economical both in financial and non financial perspectives.

This facility is provided by NPCI through its existing NFS switch.

Number of participants in IMPS; 4(Remitter (Sender),Beneficiary (Receiver),Banks, National Financial Switch – NPCI

The IMPS funds transfer has been made possible using Beneficiary account number and IFS code as well, in addition to Beneficiary mobile number and MMID

Using Aadhaar number (ABRS)

In ABRS, a remitter can initiate IMPS transaction using the beneficiary's AADHAAR number, which acts as a financial address & which will be linked to the beneficiaries account number. ABRS facilitates in simplifying the IMPS payment initiation process as in this service the customer will have to input only AADHAAR number of the beneficiary for initiating an IMPS transaction. Another important utility of this service will be in disbursal of subsidy payment i.e. Electronic Benefit Transfer (EBT)/ Direct Benefit transfer (DBT) by the Government. ABRS will act as a catalyst in expanding financial Inclusion reach.


Query Service on Aadhaar Mapper (QSAM). To facilitate the effective implementation of ABRS, a new feature is being added to the existing NUUP (USSD based platform on *99#) service. Under this new service, known as "Query Service on Aadhaar Mapper" the customer will be able to know

Whether his/her AADHAAR number is seeded/linked to any bank account number or not?

If yes, then with which bank and when was it last updated.

Appropriate existing two-factor authentication method would be used for all the channels. The limit as prescribed by the bank for these channels would apply while transferring money using either of these channels.

Maximum Limit for Funds Transfer through IMPS-Rs 2 lacs per customer per day. Monthly cap is Rs. 62,00,000 per customer.

MMID - Mobile Money Identifier (7 digit code). Each MMID is linked to a unique Mobile Number. Different MMIDs can be linked to same Mobile Number

IFS Code - 11 digit alphanumeric number, available in the users Cheque book.

Atal Pension Yojana (APY)

Government of India, Ministry of Finance has announced the launch of Atal Pension Yojana (APY) on May 9, 2015. The scheme, is an universal social security measure specially for the poor and the under-privileged , which will provide a defined pension, depending on the contribution, and its period to its subscribers. The APY will be focussed on all citizens in the unorganised sector, who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA). Under the APY, the subscribers would receive the fixed minimum pension of Rs. 1000-Rs 5000 per month at the age of 60 years, depending on their contributions, which itself would be based on the age of joining the APY. The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by any subscriber under APY would be 20 years or more. The benefit of fixed minimum pension would be guaranteed by the Government.

The Central Government would also co-contribute 50% of the total contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, i.e., from Financial Year 2015-16 to 2019-20, who join the NPS before 31st December, 2015 and who are not members of any statutory social security scheme and who are not income tax payers


Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY)

Government of India, Ministry of Finance intends to roll out Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) Scheme and Pradhan Mantri Suraksha Bima Yojana (PMSBY) from June 1st, 2015. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) Scheme offers life insurance worth Rs 2 lakhs at Rs 330 per annum while Pradhan Mantri Suraksha Bima Yojana (PMSBY) offers accident insurance worth Rs 2 lakhs at Rs 12 per annum.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

All savings bank account holders in the age 18 to 50 years in participating banks will be entitled to join. In case of multiple saving bank accounts held by an individual in one or different banks, the person would be eligible to join the scheme through one savings bank account only. Aadhar would be the primary KYC for the bank account. Enrolment period : Initially on launch for the cover period 1 st June 2015 to 31 stMay 2016, subscribers will be required to enroll and give their auto debit consent by 31 st May 2015. Benefits :Rs.2 lakhs is payable on member’s death due to any reason Premium:Rs.330/-per annum per member. The savings bank account holders of the participating banks aged between 18 years(completed)and 50 years(age nearer birthday)

Pradhan Mantri Suraksha Bima Yojana (PMSBY)

All savings bank account holders in the age 18 to 70 years . Aadhar would be the primary KYC. The cover shall be for the one year period stretching from 1stJune to 31stMay. Benefits: Death-Rs 2 lakhs. Loss of both eyes or loss of both hands or feet, loss of one eye and loss of hand and foot-Rs 2 lakhs Loss of one eye or one hand or foot-Rs 1 lakh. Premium-Rs 12 per annum per member.

Current Structure for filing Police/CBI complaints by PSBs

Amount involved in the fraud-Below Rs 3 Crore-state Police

Rs 3 crore and above & up to Rs 25 Crore-CBI (Anti Corruption Branch of CBI (where staff involvement is prima facie evident, Economic Offences Wing of CBI (Where staff involvement is prima facie not evident)

More than Rs 25 Crore-CBI (Banking Security and Fraud Cell (BSFC) of CBI (irrespective of the involvement of a public servant)


Jeevan Pramaan:

It is a digital Life Certificate, for pensioners, based on Aadhaaar Biometric Authentication.

Usage of ATMs : Number of Free Transactions

The number of mandatory free ATM transactions (inclusive of both financial and non-financial transactions) for savings bank account customers at other banks’ ATMs is reduced from the present five to three transactions per month for transactions carried out at the ATMs located in six metro centres, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad., wef 01.11.14.

Important points:

1. Even if the base/home branch where the customer account is attached, is in Non Metro , if the transactions are carried out in ATMs in 6 Metros , exceeding the prescribed limit, the Charges are applicable.

2. For Transactions carried out on other banks’ ATM , for SB customers , free transactions , for both financial and non financial reduced from 5 to 3, per month. For BSBDA/Small account holders, this limit is maximum of 4, subject to conditions.

3. In other Centres, for transactions carried out in Other Banks’ ATM, the free transactions( both financial and non financial) remain the same viz-5.

4. If there is combination of transactions in a month carried out both in 6 Metros and in other locations, total number of free transactions (inclusive of both financial and non-financial) at other bank ATMs would continue to remain at FIVE.( 3 in Metro +2 in Non Metro.)

5. Free transactions limit for use at own bank ATMs- 5 free transactions (inclusive of financial and non financial transactions) per month should be permitted to the savings bank account customers for use of own bank ATMs at all locations.

6. The ceiling / cap on customer charges of Rs.20/- per transaction (plus service tax, if any) will be applicable.

7. For BSBDA/Small SB account holders, the maximum limit of withdrawal ,including ATM, remain at 4.( for Small accounts, additionally the total of debits by way of cash withdrawals and transfers will not exceed ten thousand rupees in a month)

8. The above are only Minimum. Banks are free to offer more number of free transactions in any location both for transactions on other bank ATMs as well as own ATMs as per Board approved policy.

As per RBI Instructions, for SB accounts, the number of Free transactions allowed in six metros is 3 and in other centres 5 per month, for transactions carried out in other Banks’ ATMs. For use of own Bank ATMs, at all locations the number of free transactions is minimum 5 per month, for SB account holders. Therefore in total, in locations other than Metros, SB account holders can have a minimum of 10 free


ATM transactions per month( 5 at own bank + 5 at other Banks) and in Metros total of 8 ( 5 at Own Bank + 3 at other Banks)

RBI CLASSIFICATION OF CENTRES -POPULATION 2001 CENSUS

CENTRES-TIER WISE POPULATION GROUP WISE-

Classification of Centres

TIER 1 Centre 100,000& above Rural centre Up to 9,999

TIER 2 Centre 50,000-99,999 Semi Urban 10,000-99,999

TIER 3 Centre 20,000-49,999 Urban 1,00,000-9,99,999

TIER 4 Centre 10,000-19,999 Metro 10,00,000 & above

TIER 5 Centre 5,000- 9,999

TIER 6 Centre Less than 5,000

Important Committees:

1. Dr. Urjit R. Patel Committee-on strengthening Monetary Policy frame work.

2. Dr Bimal Jalan High Level Advisory Committee -on Licensing New banks

3. Shri B. Mahapatra working Group - Constituted to operationalise the countercyclical capital buffer framework in India.

4. B. Mahapatra Working Group -Disclosure Requirements on Restructured Advances

5. Committee on Financial Benchmarks- Chairman: Shri P. Vijaya Bhaskar

6. Dr. Nachiket Mor Committee -on Comprehensive Financial Services for Small Businesses and Low Income Households.

7. Shri R. Gandhi Working Group -on Enhancing Liquidity in the Government Securities and Interest Rate Derivatives Markets.

8. Shri P. Vijaya Bhaskar Committee- on Financial Benchmarks .

9. Shri B. Sambamurthy Technical Committee - On Mobile Banking.

10. Dr. Arvind Mayaram and Shri Anand Sinha working Group on a Resolution Regime for Financial Institutions. The Group has recommended the setting up of a single Financial Resolution Authority (FRA).

11. Shri P J Nayak Expert Committee to Review Governance of Boards of Banks


in India

12. Shri G.Gopalakrishna Committee on Capacity Building in Banks . 13. Shri Harun R Khan Committee on use of unclaimed amount lying in various

small savings schemes in post offices and banks 14. Shri G. Padmanabhan: Technical committee on Services/Facilities to

Exporters. Some of the recommendations accepted are1. an increase in the limit of e-commerce transactions and 2.extending the time period for submission of documents under project exports, 3.simplification of reporting requirement of forward contracts booked over-the-counter (OTC) and 4.extending the limit for exporters to cancel and rebook the forward contracts.

15. Shri G Padmanabhan Committee- to study the feasibility of feasibility of implementation of GIRO based payment systems and to finalise the modalities of implementing the GIRO payment system-–both electronic and cheque based in India.

ADVANCES:

Following categories are exempt from Bench Mark ( MCLR- Tenor Linked Bench mark) and Spread

(a) Loans covered by schemes specially formulated by Government of India

(b) Working Capital Term Loan (WCTL), Funded Interest Term Loan (FITL), etc. granted as part of the rectification/restructuring package

(c) Loans granted under various refinance schemes formulated

(d) The following categories of loans shall be priced without being linked to Base rate/MCLR as the benchmark for determining interest rate:

(i) Advances to banks’ depositors against their own deposits.

(ii) Advances to banks’ own employees including retired employees.

(iii) Advances granted to the Chief Executive Officer / Whole Time Directors.

(iv) Loans linked to a market determined external benchmark.

(v) Fixed rate loans of tenor above three years.

MCLR: All rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016 shall be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal benchmark for such purposes.

The MCLR shall comprise of:

a. Marginal cost of funds;


b. Negative carry on account of CRR; c. Operating costs; d. Tenor premium.

Marginal Cost of funds: The marginal cost of funds shall comprise of Marginal cost of borrowings and return on networth.

The tenor premium will not be for contractual tenor. It will be the appropriate premium for the residual period up to the next reset date. Denominator used for arriving at the operating cost for computing MCLR- Banks may calculate all operating costs as a percentage of marginal cost of funds for computing MCLR. Definition of Short Term Borrowing: A short term borrowing means borrowing of tenor up to but less than one year. The interest charged on fixed rate loans will be the interest rate mentioned in the sanction letter and not as prevailing as on date of disbursement.

Banks shall publish the internal benchmark for the following maturities:

a. overnight MCLR, b. one-month MCLR, c. three-month MCLR, d. six month MCLR, e. One year MCLR.

In addition to the above, banks shall have the option of publishing MCLR of any other longer maturity.

Banks shall review and publish their Marginal Cost of Funds based Lending Rate (MCLR) of different maturities every month on a pre-announced date.

Banks which do not have adequate systems to carry out the review of MCLR on a monthly basis, shall review their rates once a quarter on a pre-announced date for the first one year i.e. up to March 31, 2017.

Loan against Shares- Max Rs 10 lakhs( physical form), Rs 20 lakhs( Demat form) Minimum Margin 50% (Cash Margin 25%)

FOREIGN EXCHANGE

EEFC: Resident individuals are permitted to include resident relative(s) as a joint holder(s) in their EEFC account on ‘former or survivor’ basis.

100% of FEX earnings can be credited( subject to the condition that The sum total of the accruals in the account during a calendar month should be converted into Rupees on or before the last day of the succeeding calendar month after adjusting for utilization of the balances for approved purposes or forward commitments.

Diamond Dollar account- For exporters- in USD- Maximum number of accounts-5 per exporter.


Remittances: Maximum permissible limit for remittances from NRO account( subject to conditions)-USD 1 million per financial year Maximum Limit for remittances under LRS( Liberalized Remittances Scheme)-USD 2,50,000/-per Financial Year. The individual will have to designate a branch of an AD through which all the capital account remittances under the Scheme will be made. The applicants should have maintained the bank account with the bank for a minimum period of one year prior to the remittance. For small amounts aggregating up-to USD 25,000 per year, ADs need not obtain any document including Form A-2, except a simple letter from the applicant (containing the basic information, viz., names and the addresses of the applicant and the beneficiary, amount to be remitted and the purpose of remittance) .

Individuals can avail of foreign exchange facility for the following purposes within the LRS limit of USD 2,50,000 on financial year basis:

i. Private visits to any country (except Nepal and Bhutan) ii. Gift or donation iii. Going abroad for employment iv. Emigration v. Maintenance of close relatives abroad vi. Travel for business, or attending a conference or specialised training or for

meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/ check-up

vii. Expenses in connection with medical treatment abroad viii. Studies abroad ix. Any other current account transaction which is not covered under the

definition of current account in FEMA 1999.

AD Category I banks and AD Category II, may release foreign exchange up to USD 2,50,000 or its equivalent to resident individuals for studies abroad without insisting on any estimate from the foreign University. However, AD Category I bank and AD Category II may allow remittances (without seeking prior approval of the Reserve Bank of India) exceeding USD 2,50,000 based on the estimate received from the institution abroad.

Foreign Currency for Travel: Travellers going to all countries other than (a) and (b) below are allowed to purchase foreign currency notes / coins only up to USD 3000 per visit. Balance amount can be carried in the form of store value cards, travellers cheque or banker’s draft. Exceptions to this are (a) travellers proceeding to Iraq and Libya who can draw foreign exchange in the form of foreign currency notes and coins not exceeding USD 5000 or its equivalent per visit; (b) travellers proceeding to the Islamic Republic of Iran, Russian Federation and other Republics of


Commonwealth of Independent States who can draw entire foreign exchange (up-to USD 250,000) in the form of foreign currency notes or coins.

Import of Currency: A resident of India, who has gone out of India on a temporary visit may bring into India at the time of his return from any place outside India (other than Nepal and Bhutan), currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.25,000.

Export of Currency: Any person resident in India may take outside India (other than to Nepal and Bhutan) currency notes of Government of India and Reserve Bank of India up to an amount not exceeding Rs.25,000 (Rupees twenty five thousand only); and

(ii) Any person resident outside India, not being a citizen of Pakistan and Bangladesh and also not a traveler coming from and going to Pakistan or Bangladesh, and visiting India may take outside India currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs. 25,000 (Rupees twenty five thousand only) while exiting only through an airport.

A person coming into India from abroad can bring with him foreign exchange without any limit. However, if the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in exceeds USD 10,000 or its equivalent and/or the value of foreign currency alone exceeds USD 5,000 or its equivalent, it should be declared to the Customs Authorities at the Airport in the Currency Declaration Form (CDF), on arrival in India.

Permissible foreign exchange can be drawn 180 days in advance by an individual, resident in India.

Foreign exchange for travel abroad can be purchased from an authorized person against rupee payment in cash below Rs.50,000/-. However, if the sale of foreign exchange is for the amount equivalent to Rs 50,000/- and above, the entire payment should be made by way of a crossed cheque/ banker’s cheque/ pay order/ demand draft/ debit card / credit card / prepaid card only.

Surrender of Foreign Exchange-On return from a foreign trip, travellers are required to surrender unspent foreign exchange held in the form of currency notes and travellers cheques within 180 days of return. However, they are free to retain foreign exchange up to USD 2,000, in the form of foreign currency notes or TCs for future use or credit to their Resident Foreign Currency (Domestic) [RFC (Domestic)] Accounts. The residents can hold foreign coins without any limit.

NRE /FCNR Accounts: Loan against NRE/FCNR Deposits to the depositor/third party-with out limit.( subject to conditions) Joint accounts can be opened with a resident relative(s) on ‘former or survivor’ basis.

Reserve Bank has now permitted that AD banks may include an NRI close relative (relatives as defined in Section 6 of the Companies Act, 1956) in existing / new resident bank accounts as joint holder with the resident account holder on “Either or Survivor” basis subject to conditions.Such account will be treated as resident bank account for all purposes and all regulations applicable to a resident bank


account shall be applicable.

Imports:

Time limit for Normal Imports

In terms of the extant regulations, remittances against imports should be completed not later than six months from the date of shipment, except in cases where amounts are withheld towards guarantee of performance, etc.

Issue of Bank Guarantees:

No guarantee for an amount exceeding USD 500,000 or its equivalent shall be issued on behalf of a service importer other than a Public Sector Company or a Department / Undertaking of the Government of India / State Government:

where the service importer is a Public Sector Company or a Department / Undertaking of the Government of India / State Government, no guarantee for an amount exceeding USD 100,000 or its equivalent shall be issued without the prior approval of the Ministry of Finance, Government of India.

Advance Remittances for Import of goods: With out ceiling. If the amount exceeds USD 2,00,000 counter guarantee by an international Bank. In cases where the importer (other than a Public Sector Company or a Department/Undertaking of the Government of India/State Government/s) is unable to obtain bank guarantee from overseas suppliers and the AD Category – I bank is satisfied about the track record and bonafides of the importer, the requirement of the bank guarantee / standby Letter of Credit may not be insisted upon for advance remittances up to USD 5,000,000 (US Dollar five million). A Public Sector Company or a Department/Undertaking of the Government of India / State Government/s which is not in a position to obtain a guarantee from an international bank of repute against an advance payment, is required to obtain a specific waiver for the bank guarantee from the Ministry of Finance, Government of India before making advance remittance exceeding USD 100,000.

Advance Remittance for the Import of Services: banks may allow advance remittance for import of services without any ceiling subject to the following conditions:

(a) Where the amount of advance exceeds USD 500,000 or its equivalent, a guarantee from a bank of international repute situated outside India, or a guarantee from an AD Category – I bank in India, if such a guarantee is issued against the counter-guarantee of a bank of international repute situated outside India, should be obtained from the overseas beneficiary.

(b) In the case of a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments, approval from the Ministry of Finance, Government of India for advance remittance for import of services without bank


guarantee for an amount exceeding USD 100,000 (USD One hundred thousand) or its equivalent would be required.

Evidence of Import in Lieu of Bill of Entry

(i) AD Category – I bank may accept, in lieu of Exchange Control Copy of Bill of Entry for home consumption, a certificate from the Chief Executive Officer (CEO) or auditor of the company that the goods for which remittance was made have actually been imported into India provided :-

(a) The amount of foreign exchange remitted is less than USD 1,000,000 or its equivalent and

(b) The importer is a company listed on a stock exchange in India and whose net worth is not less than Rs.100 crore as on the date of its last audited balance sheet, or, the importer is a public sector company or an undertaking of the Government of India or its departments.

Documents under Imports-preservation period- Documents evidencing import into India should be preserved by AD Category – I bank for a period of one year from the date of their verification. However, in respect of cases which are under investigation by investigating agencies, the documents may be destroyed only after obtaining clearance from the investigating agency concerned.

Follow-up for Import Evidence

(i) In case an importer does not furnish any documentary evidence of import, within 3 months from the date of remittance involving foreign exchange exceeding USD 100,000, the AD Category – I bank should rigorously follow-up for the next 3 months, including issuing registered letters to the importer.

BEF statement -on half-yearly basis as at the end of June & December of every year, in form BEF furnishing details of import transactions, exceeding USD 100,000 in respect of which importers have defaulted in submission of appropriate document evidencing import within 6 months from the date of remittance. To be submitted with in 15 days in Jan and July. AD Category – I bank need not follow up submission of evidence of import involving amount of USD 100,000 or less provided they are satisfied about the genuineness of the transaction and the bonafides of the remitter.

Exports: Export trade is regulated by the Directorate General of Foreign Trade (DGFT) .

Realization and repatriation of proceeds of export of goods / software / services

It is obligatory on the part of the exporter to realize and repatriate the full value of goods / software / services to India within a stipulated period from the date of export, as under:

(i) the period of realization and repatriation of export proceeds shall be nine months from the date of export for all exporters including Units in Special


Economic Zones (SEZs), Status Holder Exporters, Export Oriented Units (EOUs), Units in Electronic Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) & Bio-Technology Parks (BTPs) until further notice.

(ii) For goods exported to a warehouse established outside India, the proceeds shall be realized within fifteen months from the date of shipment of goods.

Time Limit for Submitting EDF - Within 21 days from the date of export, exporter shall lodge the duplicate copy together with relative shipping documents and an extra copy of the invoice to the AD named in the EDF.

Grant of EDF waiver

AD Category – I banks may consider requests for grant of EDF waiver from exporters for export of goods free of cost, for export promotion up to 2 per cent of the average annual exports of the applicant during the preceding three financial years subject to a ceiling of Rs.5 lakhs. For Status Holder exporters, this limit as per the present Foreign Trade Policy is Rs.10 lakhs or 2 per cent of the average annual export realization during the preceding three licensing years (April-March), whichever is lower.

Exporters Under Caution List:

AD Category – I banks should follow the procedure mentioned below while handling shipping documents in respect of caution listed exporters:

(a) They will intimate the exporters about their caution listing, giving the details of outstanding shipping bills. When caution listed exporters submit shipping documents for negotiation / purchase/ discount/ collection, etc. the AD Category – I bank may accept the documents subject to following conditions:-

i. The exporters concerned should produce evidence of having received advance payment or an irrevocable letter of credit in their favour covering the full value of the proposed exports;

ii. In case of usance bills, the relative letter of credit should cover full export value and also permit such drawings. Besides, the usance bills should also mature within prescribed realisation period reckoned from date of shipment.

iii. Except under the above mentioned conditions given in 2 (a) (i) and (ii), AD banks should not handle the shipping documents of caution listed exporters.

(b) AD Category – I banks should obtain prior approval of the Reserve Bank for issuing guarantees for caution-listed exporters.

PRIORITY SECTOR

Targets: Total Ps-40% of ANBC. Or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher. Agriculture-18%( Sub target- 8% for Small and Marginal farmers-7% by March 2016, 8% by March 2017) Micro enterprises-7.50%(7% by March 2016, 7.50% by March 2017) Advances to weaker Sections-10%


Bank loans up to ₹ 5 crore per unit to Micro and Small Enterprises and ₹ 10 crore to Medium Enterprises engaged in providing or rendering of services and defined in terms of investment in equipment under MSMED Act, 2006 are eligible for classification under priority sector.

Bank loans up to a limit of ₹ 5 crore per borrower for building social infrastructure for activities namely schools, health care facilities, drinking water facilities and sanitation facilities (including loans for construction/ refurbishment of toilets and improvement in water facilities in the household) in Tier II to Tier VI centres are eligible for classification under priority sector.

Bank loans up to a limit of ₹ 15 crore to borrowers for purposes like solar based power generators, biomass based power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities viz. street lighting systems, and remote village electrification are eligible to be classified under priority sector loans under ‘Renewable Energy’. For individual households, the loan limit is ₹ 10 lakh per borrower.

Loans to individuals for educational purposes including vocational courses upto ₹ 10 lakh irrespective of the sanctioned amount are eligible for classification under priority sector.

Loans to individuals up to ₹ 28 lakh in metropolitan centres (with population of ten lakh and above) and loans up to ₹ 20 lakh in other centres for purchase/construction of a dwelling unit per family, are eligible to be considered as priority sector provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed ₹ 35 lakh and ₹ 25 lakh, respectively.

Definition of Micro, Small and Medium Enterprises

Manufacturing sector

Enterprises Investment in plant and machinery

Micro Do not exceed Rs 25 lakh

Small More than Rs 25 lakh but does not

exceed Rs 5 crore

Medium More than Rs 5 crore rupees but does

not exceed Rs 10 crore

Service Sector

Enterprises Investment in equipment

Micro Does not exceed Rs 10 lacs

Small More than Rs 10 lacs but does not

exceed Rs 2 crore

Medium More than Rs 2 crore but does not

exceed Rs 5 crore

MSME Targets:

Banks have been advised to achieve a 20 per cent year-on-year growth in credit to


micro and small enterprises, a 10 per cent annual growth in the number of micro enterprise accounts and 60% of total lending to MSE sector as on preceding March 31st to Micro enterprises.

In order to ensure that sufficient credit is available to micro enterprises within the MSE sector, banks should ensure that:

(a) 40 per cent of the total advances to MSE sector should go to micro (manufacturing) enterprises having investment in plant and machinery up to Rs. 10 lakh and micro (service) enterprises having investment in equipment up to Rs. 4 lakh ;

(b) 20 per cent of the total advances to MSE sector should go to micro (manufacturing) enterprises with investment in plant and machinery above Rs. 10 lakh and up to Rs. 25 lakh, and micro (service) enterprises with investment in equipment above Rs. 4 lakh and up to Rs. 10 lakh. Thus, 60 per cent of MSE advances should go to the micro enterprise.

Working Capital assessment for MSE Sector: RBI guidelines-as per Nayak Committee- up to the credit limit of Rs 5 crores Turn Over method( in our Bank up to Rs 7.50 Crores)

Single Window System –Composite Loans to MSME- up to Rs 1Crore

Mandated Collateral free loans to MSME- up to Rs 10 lakhs. Based on track record Banks may increase this limit to Rs 25 lakhs. The CGTMSE would provide cover ( up to 85%)for credit facility up to Rs. 100 lakh which have been extended by lending institutions without any collateral security and /or third party guarantees

Delayed payment to MSME by buyers-Max date 45 days. Failure attracts penal interest of 3 times of Bank rate compounded monthly.

Sick unit Definition- a. Any of the borrowal account of the enterprise remains NPA for three months or more OR b. There is erosion in the net worth due to accumulated losses to the extent of 50% of its net worth during the previous accounting year.

Weaker Sections under PS:

1. Small and Marginal Farmers

2. Artisans, village and cottage industries where individual credit limits do not exceed ₹ 1 lakh

3. Beneficiaries under Government Sponsored Schemes such as National Rural Livelihoods Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS)

4. Scheduled Castes and Scheduled Tribes

5. Beneficiaries of Differential Rate of Interest (DRI) scheme

6. Self Help Groups


7. Distressed farmers indebted to non-institutional lenders

8. Distressed persons other than farmers, with loan amount not exceeding ₹ 1 lakh per borrower to prepay their debt to non-institutional lenders

9. Individual women beneficiaries up to ₹ 1 lakh per borrower

10. Persons with disabilities

11. Overdrafts upto ₹ 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts, provided the borrowers’ household annual income does not exceed ₹ 100,000/- for rural areas and ₹ 1,60,000/- for non-rural areas

12. Minority communities as may be notified by Government of India from time to time

Deendayal Antyodaya Yojana - National Rural Livelihoods Mission ( DAY-NRLM) Replaced Swarnjayanti Gram Swarozgar Yojana (SGSY).. 50% of the beneficiaries are SC/STs, 15% are minorities and 3% are persons with disability, the ultimate target 100% coverage of BPL families. DAY-NRLM is a Centrally Sponsored Scheme and the financing of the programme would be shared between the Centre and the States in the ratio of 75:25 (90:10 in case of North Eastern States including Sikkim; completely from the Centre in case of UTs). Revolving Fund (RF): DAY-NRLM would provide Revolving Fund (RF) support to SHGs in existence for a minimum period of 3/6 months and follow the norms of good SHGs, i.e. they follow ‘Panchasutra’ – regular meetings, regular savings, regular internal lending, regular recoveries and maintenance of proper books of accounts. Only such SHGs that have not received any RF earlier will be provided with RF, as corpus, with a minimum of ₹ 10, 000 and up to a maximum of ₹ 15,000 per SHG. The purpose of RF is to strengthen their institutional and financial management capacity and build a good credit history within the group. No Capital Subsidy will be sanctioned to any SHG. Interest subvention, to cover the difference between the Lending Rate of the banks and 7%, availed by women SHGs, for a maximum of ₹ 3,00,000 per SHG in 250 districts.( direct). In 250 identified districts, banks will lend to the women SHGs @7% up to an aggregated loan amount of ₹ 3,00,000/-.The SHGs will also get additional interest subvention of 3% on prompt payment, reducing the effective rate of interest to 4%. Eligibility ::

• SHG should be in active existence at least since the last 6 months as per the books of account of SHGs and not from the date of opening of S/B account.

• SHG should be practicing ‘Panchasutras’ i.e. Regular meetings; Regular savings; Regular inter-loaning; Timely repayment; and Up-to-date books of accounts;

• Qualified as per grading norms fixed by NABARD. As and when the federations of the SHGs come to existence, the grading exercise can be done by the Federations


to support the Banks.

• The existing defunct SHGs are also eligible for credit if they are revived and continue to be active for a minimum period of 3 months.

Loan amount: The amount of various doses of credit should be as follows:

• First dose: 4-8 times to the proposed corpus during the year or ₹ 50,000 whichever is higher.

• Second dose: 5-10 times of existing corpus and proposed saving during the next twelve months or ₹ 1 lakh, whichever is higher.

• Third dose: Minimum of ₹ 2 lakhs, based on the Micro credit plan prepared by the SHGs and appraised by the Federations /Support agency and the previous credit History.

• Fourth dose onwards: Loan amount can be between ₹ 5-10 lakhs for fourth dose and/or higher in subsequent doses. The loan amount will be based on the Micro Credit Plans of the SHGs and their members.

The loans may be used for meeting social needs, high cost debt swapping and taking up sustainable livelihoods by the individual members within the SHGs or to finance any viable common activity started by the SHGs.

Repayment :

The first dose of loan will be repaid in 6-12 instalments Second dose of loan will be repaid in 12-24 months. Third dose will be sanctioned based on the micro credit plans, the repayment

has to be either monthly/quarterly /half yearly based on the cash flow and it has to be between 2 to 5 Years.

Fourth dose onwards: repayment has to be either monthly / quarterly / half yearly based on the cash flow and it has to be between 3 to 6 Years.

Security and Margin: No collateral and no margin will be charged up to ₹ 10.00 lakhs limit to the SHGs. No lien should be marked against savings bank account of SHGs and no deposits should be insisted upon while sanctioning loans.

Deendayal Antyodaya Yojana- National Urban Livelihoods Mission (DAY-NULM)- Restructured the existing Swarna Jayanti Shahari Rozgar Yojana (SJSRY).Focus on Urban poor. Reservation under SEP-30% for Women, 3% for Differently abled, SC/ST-proportionate, 15% for minority communities. No minimum educational qualification


is required. Minimum age-18 years. Individual Loan : Project Cost (PC): The Maximum unit Project Cost for individual micro-enterprises cases is ₹ 2,00,000 (₹ Two Lakhs). No collateral required. Repayment: Repayment schedule ranges from 5 to 7 Years after initial moratorium of 6-18 months as per norms of the banks. Margin : No margin money should be taken for loans up to ₹ 50,000 and for loans ranging from ₹ 50,000 - ₹ 10 lakhs, preferably 5% should be taken as margin money and it should in no case be more than 10% of the Project cost. Group Loan: Eligibility Criteria: The group should have minimum 5 members with a minimum of 70% members from urban poor families. More than one person from the same family should not be included in the same group. Project Cost (PC): The Maximum unit Project Cost for a group finance for enterprise is ₹ 10,00,000 (₹ Ten Lakhs). Loan and Margin Money: Project Cost less the beneficiary contribution (Margin Money) would be made available as loan amount to the group enterprise by the bank. No margin money should be taken for loan up to ₹ 50000 and for higher amount loans, preferably 5% should be taken as margin money and it should in no case be more than 10% of the project cos. No collateral/ guarantee required. Repayment schedule ranges from 5 to 7 Years after initial moratorium of 6-18 months as decided by banks.

Shri V.K. Sharma Working Group to Review the Credit Guarantee Scheme for Micro and Small Enterprises (MSEs) - Based on this WG recommendation ,Banks are mandated not to accept collateral security in the case of loans up to ₹ 10 lakhs extended to units in the MSE sector.

Interest Subvention Scheme for the year 2016-17 for short term crop loans upto Rs 3 lakh:

i) A subvention of 2% per annum will be made available to Public Sector Banks (PSBs) and in respect of loans given by the rural and semi–urban branches of Private Sector Scheduled Commercial Banks, for short term crop loan upto Rs.3,00,000/- per farmer provided the lending institutions make available short term credit at the ground level at 7% per annum to farmers. The 2% interest subvention will be calculated on the crop loan amount from the date of its disbursement/ drawal upto the date of actual repayment of the crop loan by the farmer or upto the due date of the loans fixed by the banks, whichever is earlier, subject to a maximum period of one year.

ii) An additional interest subvention of 3% per annum will be available to the prompt payee farmers from the date of disbursement of the crop loan upto the actual date of repayment by farmers or upto the due date fixed by the bank for repayment of crop loan, whichever is earlier, subject to a maximum period of one year from the date of disbursement. This also implies that the farmers paying promptly would get short


term crop loans @ 4% per annum during the year 2016-17. This benefit would not accrue to those farmers who repay after one year of availing such loans.

iii) In order to discourage distress sale by farmers and to encourage them to store their produce in warehouses against warehouse receipts, the benefit of interest subvention will be available to small and marginal farmers having Kisan Credit Card for a further period of upto six months post-harvest on the same rate as available to crop loan against negotiable warehouse receipt for keeping their produce in warehouses.

iv) To provide relief to farmers affected by natural calamities, the interest subvention of two percent will continue to be available to banks for the first year on the restructured amount. Such restructured loans may attract normal rate of interest from the second year onwards as per the policy laid down by the RBI

Internal Working Group to Revisit the Existing Priority Sector Lending Guidelines (Chair: Lily Vadera)

The key recommendations of the Report include:

i) Overall Priority sector target: The target for lending to the redefined priority sector is retained uniformly at 40 per cent of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposure (CEOBE), whichever is higher, for all scheduled commercial banks. However, foreign banks, which will all now come under the norms, have been given time to comply with the target.

ii) Agriculture: Target of 18 per cent of ANBC retained. A sub target of 8 per cent of ANBC has been recommended for small and marginal farmers to be achieved in a phased manner. More flexibility has been recommended for banks to lend the remaining 10 per cent of the overall agriculture loan target to other farmers, agricultural infrastructure and ancillary activities as defined by the Group. To give a fillip to Agri-infrastructure and Agri-processing, no caps on loan limits have been stipulated.

iii) MSME: In addition to micro and small enterprises, medium enterprises are included within the ambit of priority sector lending. To ensure that the micro enterprises are not crowded out, a sub target of 7.5 per cent for micro enterprises has been recommended, which is to be achieved in a phased manner.

iv) Other Sectors: In addition, loans to sanitation, health care and drinking water facilities and renewable energy will come under the priority sector ambit, as will incremental loans made to exports, with certain ceilings.

v) Priority Sector Lending Certificates: The Working Group recommends introduction of priority sector lending certificates (PSLCs) which will enable banks to meet their PSL requirements even while leveraging their comparative advantage in lending.


IOB-FINANCIAL INDICATORS Rs in Crore

S NO Particulars 30.06.16 31.03.16 31.03.15 31.03.14

1 Global Deposits 218484 224514 246049 227976

2 Global Advances 165556 172727 179041 181081

3 Mix 384040 397241 425090 409057

4 Operating Profit 690.55 2885.46 3322.34 3997.24

5 Net Profit -1450.50 -2897.33 -454.32 601.74

6

CRAR-Basel –III

Basel III Tier I-7.39%

CET I- 6.78% Tier II-2.08% Total-9.47%






CET I-7.13% Tier II-3.31% Total-10.78%

Basel II Tier I % Tier II % Total Basel II-11.15%

7 Dividend 12%

8 Net Int Margin 1.87% 1.94 2.06% 2.28%

9 Return on Assets

-0.16% 0.23%

Return on Equity Negative

10 Weighted average EPS

-5.56% -3.68% 6.05

11 Book Value Per Share

105.71

12 CD ratio 75.77% 76.93% 72.77% 79.43%

13 Gross NPA to Gross Adv

20.48% 33913.15

17.40% 30049

8.33% 14922.45

4.98% 9020.48

14 Net NPA 13.97% 21321.24

11.89% 19213

5.68% 9813.33

3.20% 5658.12

15 Govt share in Equity

73.58% 77.32% 73.80% 73.80%

Public Share Holding

22.68% 26.20% 26.20%

16 Capital 1807.26 1235.35 1235.35

17 Authorized Capital

3000 3000 3000

18 Total capital funds

19988.73

19 CASA Deposits 30.17% 29.10% 25.09% 25.34%

20 Provisional Coverage ratio

47.61% 47.39% 50.92% 54.94%

21 Cost to Income Ratio

63.62% 63.53% 42.43% 48.40%

22 Business Per employee

13.24 13.67

23 Profit per employee

Negative Negative 2.01


During the year 2015-16 the Bank has raised capital to the tune of Rs 2009 crore from

Government of India and Rs 202 crore from LIC of India (including share premium).

IT INITIATIVES: Bank has embarked on Technology Upgrade and IT Transformation, to

improve the operational efficiency and customer service. CBS migration project for all

branches has been completed by February 2016.

Quarter ended 30.06.16

During the quarter ended 30.06.16 bank raised capital of Rs 261.94 crores.

GOI advised their decision of allocating Rs 3101 crores by way of preferential allotment

of equity. Of this Rs1551 crores are marked for immediate infusion. With this our CRAR

position will be 10.37%, well above regulatory minimum of 9.625%.

Bank has completed Technological upgradation and IT transformation to new

outsourced CBS (Finacle ) to improve operational efficiency and customer service.

Bank has also installed Self pas s Book Printers ,Bulk Note accepters, besides hosting

lot of services through alternative delivery channel.

CATEGORY OF BRANCHES

Based on business mix of avg dep+avg Adv for last 2 years.(including20% of Non fund

business)

Category Avg Business Mix Incumbency

Small Below Rs5 Crore Scale-I

Medium Rs5 cr-Below Rs20 cr Scale-II

Large Rs 20 Cr-Below75 cr Scale-III

Very Large Rs75 cr-below Rs200 cr Scale-IV

Excep Large Rs200 cr Scale-V

Excep Very Large Rs1500 cr and above(Min adv-

Rs750 cr

Scale-VI

WISH YOU ALL GOOD LUCK !