Page 46 - Banking Finance March 2022

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announced certain measures - Resolution Framework 2 and a) The scope of video KYC known as V-CIP (video-based
Resolution for MSMEs - to alleviate uncertainties and stress customer identification process) for new categories
on individual borrowers and small businesses and Micro, Small of customers such as proprietorship firms,
and Medium Enterprises (MSMEs), many of whom are finding authorised signatories and beneficial owners of
it difficult to repay loans on time. These measures are going Legal Entities and for periodic updation of KYC
to help the hard-pressed corporate, msme and individual.
b) Conversion of limited KYC accounts opened on the
basis of Aadhaar e-KYC authentication in non-face-
1. Term liquidity of Rs 50,000 crore for
to-face mode to fully KYC compliant accounts
emergency healthcare services
To ease access to emergency health services, "On-tap c) Enabling the use of KYC Identifier of Centralised KYC
liquidity" of Rs 50,000 crore with tenor up to three Registry (CKYCR) for V-CIP and submission of
years at repo rate. These loans will be continued to electronic documents (including identity documents
classified under the 'priority sector' till repayment or issued through DigiLocker) as identify proof
maturity, whichever is earlier. d) Introduction of more customer-friendly options,

including the use of digital channels for the purpose
2. Special long-term repo operations (SLTRO) for of periodic updation of KYC details of customers.
small finance banks (SFBs):
It has been decided to conduct special 3-year long-term Digital Banking in the times of a Covid-
repo operations (3-year SLTRO) of Rs 10,000 crore at
repo rate for SFBs. The facility was to help them with 19 epidemic
fresh lending of up to Rs 10 lakh per borrowers and it With the advent of Video KYC and rationalization of KYC
was available till October 31, 2021. compliance requirement by RBI (as mentioned above) it is
apparent that our regulator wants that all banks in India
3. Priority lending by SFBs to MFIs should go digital and provide maximum services to their
SFBs are now being permitted to lend to smaller MFIs customer through digital mode. So many banks have already
with asset size of up to Rs 500 crore which will be
started giving maximum services on digital mode through
classified as priority sector lending and this is likely to mobile banking like:
help individual borrowers.
Y Online Opening of accounts through mobile banking as
Video KYC is permitted.
4. Credit to 'unbanked' MSME entrepreneurs
RBI allowed Scheduled Commercial Banks (SCBs) to Y Online sanctioning of loan through Straight Through
deduct credit disbursed to new MSME borrowers from Process (STP) and thereafter direct credit to their
their net demand and time liabilities (NDTL) for accounts as Digital Documentation can be done.
calculation of cash reserve ratio (CRR). This exemption Y Enhanced Customer Service through live chat bots and
currently available for exposures up to Rs 25 lakh and virtual interaction by the Branch people.
for credit disbursed uptil December 31, 2021.
Y Virtual Banking through Whats App.
5. Resolution 2.0 for individuals, small businesses Y Marketing of products through automated platform
The RBI has allowed borrowers (individuals, small and using Big Data for upselling and cross-selling
businesses and MSMEs) with aggregate exposure of up services.
to Rs 25 crore -- who have not availed restructuring
under earlier frameworks and classified as 'Standard' on
In these unsettling times, banks will have to take drastic
March 31, 2021 -- shall be eligible to be considered measures to contend with an unprecedented number of
under Resolution 2.0 framework.
challenges in the months ahead. To reduce cost and increase
6. Rationalisation of KYC compliance requirements customer base, digitization will play a crucial role to fill in
The RBI has also rationalised certain compliance the blanks. How individual bank is responding to this change
will determine their survival as post covid banking will be
requirements in view of the Covid-19 second wave.
These include: different. T

46 | 2022 | MARCH | BANKING FINANCE