Page 10 - Banking Finance November 2022

RBI CORNER

Reserve Bank

RBI tightens disclosure the reported profit before provisions RBI ban on M&M recovery
and contingencies.
norms on NPA divergence agents
Norms that applied to commercial RBI releases 'alert list' of The RBI barred Mahindra & Mahindra
banks on disclosing divergence in asset Financial Services from appointing any
34 entities barred from
classification and provisioning will hold
agents for recovery or repossession.
good for urban cooperative banks forex trades
The move comes in the wake of the
(UCBs) also, the Reserve Bank of India After receiving repeated enquiries on private lender's recovery agents mow-
(RBI) said. the authorisation status of certain elec- ing down a pregnant borrower during
The regulator also revised specified tronic trading platforms for foreign a vehicle repossession in Hazaribagh,
thresholds for commercial banks to dis- exchange transactions, the Reserve Jharkhand.
close divergence from this financial Bank of India has released a list of en-
Recently recovery agents of Mahindra
year (FY23). tities that are not authorised to under-
& Mahindra Financial Services, while
take such trades.
Banks will make disclosures if they sat- repossessing a tractor from a borrower
isfy either of the two conditions: First, The list, which will be referred to as an Mithilesh Kumar Mehta, ran over his
when additional provisioning for non- 'alert list', is not exhaustive and is 22-year-old pregnant daughter, who
performing assets (NPAs) assessed by based on the latest information avail- had asked to see their identity cards.
the RBI exceeds 10 per cent of the able to the RBI at the time, the cen- Following an uproar, M&M Financial
reported profit before provisions and tral bank said. The list includes entities Services said it would investigate and
contingencies; second, when addi- that are neither authorised to deal in review the practice of using third-party
tional gross NPAs identified by the regu- foreign exchange under the Foreign
collection agencies.
lator exceed 10 per cent of the re- Exchange Management Act, 1999 nor
RBI stepped in, while allowing the
ported incremental gross NPAs. to operate electronic trading platforms
lender to continue with recovery ac-
for forex transactions.
It gives a leeway to UCBs, for which the
tivities using its employees. "This ac-
threshold for reported incremental The central bank's list has a total of 34
tion is based on certain material super-
gross NPAs will be 15 per cent. This entities. Some of the entities listed are
visory concerns observed in the said
threshold will be reduced progressively Alpari, AnyFX, Ava Trade, Binomo, e
NBFC, with regard to the management
for UCBs in a phased manner after re- Toro, Exness, Expert Option, FBS,
of its outsourcing activities," it said.
view, RBI said. FinFxPro and Forex.com.
The disclosure norm will become OctaFX, one of the entities which has
Idea to link all credit cards
stricter from FY24. Banks will have to been listed, is an official sponsor of the
with UPI: RBI ED
disclose divergence when the GNPAs Delhi Capitals team in the Indian Premier
assessed by RBI exceed 5 per cent of League cricket tournament, reports said. Reserve Bank of India (RBI) has started
10 | 2022 | NOVEMBER | BANKING FINANCE