Page 59 - Banking Finance August 2024

RBI CIRCULAR

RBI

CIRCULAR

Bank Finance against Shares and Deben- DPSS.PD.CO.No.622/02.27.019/2011-2012 dated Octo-
ber 5, 2011. There has been significant increase in the
tures availability of banking outlets, developments in pay-

July 25, 2024 ment systems for funds transfers, and ease in fulfilling
KYC requirements etc., since then; and now users have
multiple digital options for funds transfer. A review was
1. Please refer to the circular UBD.No.DS.PCB.CIR.16/ recently undertaken of various services facilitated in the
13.05.00/2001-02 dated October 22, 2001 and para current framework. Based on the review, the follow-
6.6.5 of Master Circular - Exposure Norms and Statu- ing changes are being made:
tory / Other Restrictions – UCBs dated January 16,
2024, in terms of which Primary (Urban) Co-operative a) Cash Pay-out Service
Banks (UCBs) were advised that the aggregate of their i) The remitting bank shall obtain and keep a
all loans against the security of shares and debentures record of the name and address of the benefi-
should be within the overall ceiling of 20 per cent of ciary.
their owned funds. b) Cash Pay-in Service
2. On a review, it has been decided that the aforemen- i) Remitting banks / Business Correspondents
tioned overall ceiling of 20 per cent shall be linked to (BCs) shall register the remitter based on a veri-
Tier I capital of the bank as on 31st March of the pre- fied cell phone number and a self-certified ‘Of-
vious financial year, as defined in Master Circular - Pru- ficially Valid Document (OVD)’ as per the Mas-
dential Norms on Capital Adequacy - Primary (Urban) ter Direction – Know Your Customer Direction
Co-operative Banks (UCBs) dated April 1, 2024, as 2016, as amended from time to time.
amended from time to time. ii) Every transaction by a remitter shall be vali-
3. The change stipulated at paragraph 2 above shall be dated by an Additional Factor of Authentica-
effective from January 01, 2025. All other related pro- tion (AFA).
visions of the aforesaid circulars remain unchanged. iii) Remitting banks and their BCs shall conform to
provisions of the Income Tax Act, 1961 and the
Domestic Money Transfer – Review of rules / regulations framed thereunder (as

Framework amended from time to time), pertaining to
cash deposits.
July 24, 2024
iv) Remitter bank shall include remitter details as
part of the IMPS / NEFT transaction message.
1. The framework for Domestic Money Transfer (DMT)
was introduced in 2011, vide RBI circular v) The transaction message shall include an iden-

BANKING FINANCE | AUGUST | 2024 | 53