Page 9 - Banking Finance July 2022
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RBI CORNER
returns filed by the regulated entities est and had resorted to undue harass- home loans extended on a floating in-
at least once in three years to ascer- ment of customers for loan recovery terest rate basis. Housing loans issued
tain their relevance and periodicity. purposes," RBI said. by UCBs should be repayable within a
maximum period of 20 years, the cir-
It has also been recommended to shift As such, the above companies shall not
cular said.
from the current prescription of sub- transact the business of a Non-Banking
mitting data on a fortnight reporting Financial Institution (NBFI), as defined
basis to a system of reporting data on in clause (a) of Section 45-I of the RBI RBI asks SFBs to focus on
the 15th and last working day of every Act, 1934, according to the Central
sustainable growth
month. bank.
RBI has asked small finance banks
The RRA submitted its report recently (SFBs) to focus on sustainable growth
RBI doubles home loan
containing a set of recommendations
and accord importance to business
that will supposedly reduce the burden ceiling for co-op banks model and governance.
on regulated entities (REs) by stream-
RBI has doubled the limit on home RBI Deputy Governors M. K. Jain and
lining the regulatory instructions and
loans issued by urban cooperative M. Rajeshwar Rao held discussions
rationalizing reporting requirements.
banks (UCB). With this, tier-I UCBs can with managing directors (MDs) and
RRA 2.0 was set up by RBI in April last
issue individual housing loans of up to chief executive officers (CEOs) of SFBs.
year with an aim to reduce the com-
Rs. 60 lakh while tier-II UCBs are al- Executive directors of supervision and
pliance burden on REs by streamlining
lowed to offer loans of up to Rs. 1.4 regulation and other senior officials of
the regulatory instructions and ratio-
crore, the central bank said in a mas- the RBI also attended the meeting,
nalizing reporting requirements.
ter circular. The RBI had made the the central bank said in a statement.
announcement in its June monetary
"In the meeting, the emphasis on ac-
Reserve Bank cancels reg- policy. The revision in lending limits for
cording due importance to these
istrations of 5 NBFCs UCBs was last done in 2011. themes for sustainable growth of SFBs,
The Reserve Bank has cancelled the "Taking into account the increase in particularly their business model and
certificate of registration issued to five housing prices since the limits were last governance, was reiterated after tak-
Non-Banking Financial Companies revised and considering the customer ing stock of the developments in the
(NBFCs) - UMB Securities and Anashri needs, it has been decided to increase sector," the statement said.
Finvest (both Bengaluru-based), the existing limits on individual housing
SFBs were advised to continue to
Chadha Finance (New Delhi), Alexcy loans by cooperative banks," the RBI
evolve in tune with the differentiated
Tracon (Kolkata) and Jhuria Financial had said.
banking licence given to them with
Services (Guwahati) - due to irregular
The central bank has also revised the proportionate growth in their capital
lending practices. prudential lending norms for these base.
The certificates of the above men- banks. According to the circular, the
tioned NBFCs have been cancelled on RBI has reduced the exposure limits of
Govt clears 4 names for
account of violation of RBI's guidelines UCBs to a group of connected borrow-
ers to 25% of its total tier-I capital from RBI Board
on outsourcing and Fair Practices Code
in their digital lending operations un- 40% earlier. The exposure limit for a The government has nominated Anand
dertaken through third party apps; this single borrower for UCBs remains at Mahindra, Venu Srinivasan, Pankaj
was considered detrimental to public 15% of the tier-I capital. The exposure Ramanbhai Patel and Ravindra H
interest, said the Central bank's state- of UCBs to housing, real estate and Dholakia as part-time non-official Di-
ment. commercial real estate loans is limited rectors on the Central Board of Re-
to 10% of their total assets. serve Bank of India (RBI).
"These companies were also not com-
plying with the extant regulations per- UCBs cannot charge foreclosure As per an official statement, the Ap-
taining to charging of excessive inter- charges or pre-payment penalties on pointments Committee of the Cabinet
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