Page 11 - Banking Finance August 2024

RBI CORNER

RBI cancels registration of Chief General Manager-in-Charge in purposes allowed under RBI's
the Department of Supervision. Liberalised Remittance Scheme. The
2 NBFCs scheme allows every individual to send
As executive director, he will look af-
The Reserve Bank said it has cancelled ter Deposit Insurance and Credit Guar- up to $250,000 abroad annually.
the certificates of registration of two
antee Corporation (DICGC), foreign So far, money transfers under LRS to
NBFCs -- Star Finserv India and Polytex exchange department, and interna- International Financial Services Cen-
India -- due to irregular lending prac- tional department, the RBI said in a tres (IFSCs) were allowed only for in-
tices.
statement. vesting in securities within IFSCs, ex-
Hyderabad-based Star Finserv India Prior to being promoted as executive cluding Indian companies, and for pay-
was offering the service under director, Kar was serving as Chief Gen- ing education fees to foreign universi-
'Progcap' (owned and operated by eral Manager-in-Charge in the Human ties or institutions in IFSCs.
Desiderata Impact Ventures Private Resource Management Department, Now, RBI allows remittances under LRS
Limited).
the RBI said in a separate statement. for deposits, purchasing immovable
Polytex India, headquartered in She will look after the Department of property, investing in equity and debt,
Mumbai, was providing services under Communication, Human Resource giving gifts, making donations, travel-
the 'Z2P' mobile application (owned ling, maintaining close relatives, re-
Management Department, and Right
and operated by Zaitech Technologies ceiving medical treatment as well as
to Information (First Appellate Au-
Private Limited). thority). studying abroad. The foreign currency
Giving reasons for cancelling the Cer- account in GIFT City can be used for all
tificate of Registration (CoR) of Star RBI slaps Rs. 1.32 crore these purposes.
Finserv, RBI said the company has vio- The funds in the foreign currency ac-
lated guidelines on the code of con- penalty on PNB counts can be used to invest in portfo-
duct in outsourcing financial services in RBI imposed a monetary penalty of Rs lio management schemes that invest in
its digital lending operations by 1.32 crore on Punjab National Bank foreign securities and also in depository
outsourcing its core decision-making (PNB) for violating loans and advances receipts of foreign stocks trading in
functions, such as credit appraisal, loan and Know Your Customer (KYC) related IFSC exchange. Residents, however,
sanctioning as well as KYC verification norms. are not allowed to invest in stocks of
process to the service provider. According to the RBI's press release, Indian companies listed on IFSC but
the bank had sanctioned working capi- can invest in foreign listings. An IFSC is
RBI appoints Arnab Kumar tal demand loans to two state govern- a jurisdiction where business is done in
ment-owned corporations against foreign currency and for all regulatory
Chowdhury, Charulatha S purposes, treated as an international
amounts receivable from the govern-
Kar as executive directors ment by way of subsidies, refunds, or financial hub. In India, GIFT City is the

The Reserve Bank of India announced reimbursements. In addition, the only IFSC to have been approved by
govt.
the appointment of Arnab Kumar state-owned lender failed to preserve
Chowdhury and Charulatha S Kar as the records pertaining to the identifi-
executive directors. Chowdhury and cation of customers and their ad- RBI flage 'lakhs' of ac-
Kar will look after three departments dresses obtained during the course of counts used for fraud,
each. the business relationship in certain ac-
counts. evergreening
Kar has been appointed as Executive The Reserve Bank of India has raised
Director (ED) with effect from July 1 an alarm over certain banks having
while Chowdhury has been appointed RBI allows forex A/cs in 'lakhs' of accounts used for fraudulent
ED with effect from June 3, 2024, ac- GIFT transactions and evergreening of loans
cording to the RBI. Indian residents can now open foreign during an interaction with chief finan-

Prior to being promoted as executive currency accounts in GIFT City into cial officers and auditors of banks and
director, Chowdhury was serving as which they can remit money for all financial institutions.

10 | 2024 | AUGUST | BANKING FINANCE