Page 8 - Banking Finance September 2023

RBI CORNER

Reserve Bank

News

Give borrowers option to He added that pre-payments take place RBI has decided to review the regula-
because of an increase in income, wind- tory framework for NBFC-Infrastruc-
prepay : RBI
fall gains or sale of property. ture Debt Funds (IDFs) in consultation
RBI is worried about the long exten- with the government.
RBI proposes conversa-
sion of home loan tenures. Deputy
The revised framework envisages with-
governor M Rajeshwar Rao said that tional payments on UPI drawal of the requirement of a spon-
the regulator is not considering defin-
RBI has proposed to launch "conversa- sor for the IDFs, permission to finance
ing an "unreasonable elongation" as
tional payments" on UPI so that users 'Toll Operate Transfer' projects as di-
the bank's board will have to consider
can engage in conversation with an AI- rect lenders, access to ECBs and mak-
this. "It is for the bank board to decide
powered system to initiate and com- ing tripartite agreement optional for
having regard to the tenor and the
plete transactions. The facility will ini- public-private partnership projects.
repayment capacity of the individual
tially be available in Hindi and English.
borrowers," he said. RBI fines 4 PSUs for late
It plans to facilitate offline transactions
"We have already discussed this with using Near Field Communication tech- reporting
the CEOs of the banks and conveyed our
nology. This will enable payments in The Reserve Bank of India (RBI) has
concerns and what actions they need to
situations with weak connectivity. imposed late submission fees (LSF) of
take," said Rao, adding that RBI will Rs. 2,000 crore on ONGC Videsh Ltd
RBI has increased per transaction limit
issue detailed guidelines shortly. (OVL), Indian Oil Corp. Ltd, GAIL (India)
to Rs. 500 from Rs. 200 for small value
A retired central banker said that be- digital payments in offline mode includ- Ltd, and Oil India Ltd for delayed re-
sides hiding the stress in the system, ing for National Common Mobility Card porting of their overseas investments.
elongating tenures also blunts the im- and UPI Lite. The overall limit is, how- The move may impact the overseas
pact of the monetary policy as borrow- ever, retained at Rs. 2000 to contain work commitments of these four state-
ers do not immediately feel the pres- the risks associated with relaxation of run energy majors, prompting efforts
sure of rising rates, especially when two-factor authentication. by them to secure an extension from
home loans are the biggest drivers of RBI, which has imposed a late submis-
The central bank has proposed to put
credit growth. sion fee of Rs. 500 crore each on the
in place a comprehensive, risk-based
four firms.
According to bankers, a temporary ex- framework covering administration of
tension of tenure is not always a cause all benchmarks related to foreign ex- State Bank of India (SBI) is the autho-
for worry as interest rates move in change, interest rates, money markets rized dealer (AD) bank for these public
cycles, and should RBI cut rates in two and government securities such as sector undertakings' (PSUs') foreign
years, the loan would revert to the origi- benchmarks on certificate of deposits transactions. It is the work of the AD
nal tenure. "The average tenure of loans rates, repo rates, and FX Options Vola- bank to report and reconcile their over-
is still below 10 years because of repay- tility Matrix as well as other bench- seas direct investments (ODIs) within
ments and refinancing," said a banker. marks on government securities. the requisite timelines.

8 | 2023 | SEPTEMBER | BANKING FINANCE