Page 10 - Banking Finance March 2022

RBI CORNER

The decision comes days after Finance PCFS is primarily engaged in mobile- spective of asset size, non-deposit tak-
Minister Nirmala Sitharaman proposed based lending operations through its ing NBFCs with asset size of Rs 1,000
to up spending to support the app Cashbean. With the announce- crore and above. Similarly, upper layer
economy's world-beating recovery. ment, the Cashbean app will cease to NBFCs consist of finance companies
conduct any business in India. which are specifically identified by the
"The government's thrust on capital
RBI as warranting enhanced regula-
expenditure and exports are expected Incorporated in 1995 as an Indian
tory requirements.
to enhance productive capacity and company, PCFS got the NBFC licence in
strengthen aggregate demand. This 2002 and received RBI nod in 2018. Forex reserves jump by
would also crowd in private invest- Afterwards, the ownership of the com-
ment," Das said. pany was transferred and it became a $2.76 bn to $632.95 bn:

Other decisions include curtailment of Chinese controlled company. RBI data
the hours when reverse repo and MSF The country's foreign exchange re-
windows can be availed -- a return to RBI asks NBFCs to enable serves increased by USD 2.762 billion
pre-pandemic methods of managing Core Fin Services Solution to USD 632.952 billion for the week
liquidity. ended February 18 on a healthy rise in
akin to that in banks
the value of gold reserves and core
RBI Cancels Registration of The Reserve Bank of India (RBI) said currency assets, the RBI said.
non-banking finance companies
Chinese-Owned Lending (NBFCs) in the upper and middle layer, In the previous reporting week, the
App Cashbean with ten or more fixed point service overall reserves had declined by USD
1.763 billion to USD 630.19 billion.
The Reserve Bank of India (RBI) on delivery units as of October 1, 2022,
February 24 cancelled the registration will have to mandatorily implement During the reporting week, the rise in
of fintech startup, Cashbean for flout- "Core Financial Services Solution overall reserves was on account of an
increase in the foreign currency assets
ing a slew of norms. The central bank (CFSS)" by September 30, 2025, a sys- (FCA), a major component of the over-
said that it has nullified the CoR of PC tem akin to the Core Banking Solution all reserves, the Reserve Bank of India's
Financial Services (PCFS) - the parent used by banks.
(RBI) weekly data released showed.
company of Cashbean - for 'supervisory It will provide seamless customer inter-
concerns such as gross violations of RBI face in digital offerings and transac- FCA increased by USD 1.496 billion to
directions on outsourcing and Know tions relating to products and services USD 567.06 billion in the week ended
Your Customer norms.' with anywhere / anytime facility, the February 18, it said.
The Non-Banking Financial Institution RBI said in a statement. Further, it will Expressed in dollar terms, the foreign
(NBFI) is also in the dock for charging enable integration of NBFCs' functions, currency assets include the effect of
exorbitant rates of interest and other provide centralised database and ac- appreciation or depreciation of non-US
charges to its borrowers 'in an opaque counting records, and be able to gen- units like the euro, pound and yen held
manner.' The action was also initiated erate a suitable management informa- in the foreign exchange reserves.
against the NBFI for unauthorised us- tion system (MIS), both for internal Gold reserves increased by USD 1.274
age of logos of RBI and CBI for recov- purposes and regulatory reporting. billion to USD 41.509 billion in the re-
ery from its borrowers. Earlier, the RBI had said, NBFCs with porting week, the data showed.
The decision was taken by RBI under ten and more branches will be man- The special drawing rights (SDRs) with
Section 45-IA (6) (iv) of the Reserve dated to adopt Core Banking Solution. the International Monetary Fund (IMF)
Bank of India Act, 1934. Under the rule, And a glide path of three years with decreased by USD 11 million to USD
RBI has the power to cancel the CoR effect from October 01, 2022 will be 19.162 billion, RBI said.
of any NBFC if it flouts directions issued provided. The country's reserve position with the
by RBI or if it fails to maintain accounts According to the scale-based frame- IMF increased by USD 4 million to USD
in accordance with the requirements work for NBFCs, the middle layer con- 5.221 billion in the reporting week, the
of the law. sists of all deposit taking NBFCs, irre- data showed. T

10 | 2022 | MARCH | BANKING FINANCE