Page 11 - Banking Finance September 2025

RBI CORNER

Saraswat Co-operative Bank, effective norms; framework effec- day operations. The panel also pro-
August 4, 2025. This move comes af- posed maintaining the current CRR
ter NICBL was placed under morato- tive from January 2026 rule, requiring 90% daily minimum bal-
rium in February 2025, following a Rs. The Reserve Bank of India (RBI) has ances, to ensure consistent liquidity
122 crore embezzlement involving released the final framework for co- management.
former senior officials. lending arrangements between banks
and NBFCs, effective January 1, 2026. RBI: Digital banking must
The merger is expected to provide re-
lief to over 1.22 lakh NICBL depositors The updated norms introduce blended remain optional for cus-
who have faced withdrawal restric- interest rates, irrevocable funding com-
mitments, and escrow-based fund dis- tomers
tions. Approved under Section 44A(4)
of the Banking Regulation Act, 1949, tribution. Dual lending will be enabled The Reserve Bank of India (RBI) has
the amalgamation will see Saraswat using a single KYC process, aiming to clarified that banks cannot mandate
Bank absorb all assets and liabilities of streamline borrower experience. customers to opt for digital banking
NICBL. NICBL's 27 branches will be However, rating agency ICRA noted services as a prerequisite for availing
rebranded and function as Saraswat that these changes, particularly the 15- other facilities like debit cards. In its
draft guidelines on Digital Banking
Bank outlets. day loan transfer timeline and capital
requirements, may reduce the attrac- Channels Authorisation, the central
Saraswat Bank, India's largest urban bank stressed that access to digital
co-operative bank, had a business vol- tiveness of co-lending for originators. services must be voluntary, and cus-
ume of Rs. 91,814 crore as of March In parallel, the RBI has also allowed tomer consent must be explicitly
2025, while NICBL reported only Rs. banks and NBFCs to provide partial sought and documented.
3,560 crore. The merger is part of credit enhancements for certain bonds While banks can collect mobile num-
RBI's efforts to ensure depositor pro- issued by large NBFCs and municipali- bers for transaction alerts as per KYC
tection, improve governance, and en- ties, subject to eligibility criteria. norms, they cannot link it to compul-
hance stability in India's cooperative An RBI panel has suggested shifting to sory digital banking enrolment. The
banking sector. a 7-day variable rate repo/reverse draft further mandates clear commu-
repo framework as the primary liquid- nication that SMS and email alerts will
RBI finalises co-lending ity tool, phasing out the existing 14- be sent for all financial and non-finan-

cial account activities.
RBI defines digital banking channels to
RBI removes approval requirement for special rupee include services offered via internet,
vostro accounts mobile apps, or other electronic plat-
The Reserve Bank of India (RBI) has eased the process for Indian banks to forms. The move is aimed at ensuring
open Special Rupee Vostro Accounts (SRVAs) by eliminating the need for prior financial inclusion and safeguarding
user choice, especially for customers
approval. This change, effective immediately, is expected to significantly ac-
celerate the onboarding of correspondent banks for rupee-based cross-bor- who may be less comfortable using
digital tools. Public feedback on the
der trade settlements.
draft has been invited.
Initially introduced in 2022 to promote rupee internationalisation, SRVAs
were permitted only with RBI's explicit approval. In a recent notification, Join
the RBI said, "Authorised Dealer banks can now open SRVAs of correspon-
dent banks without referring to the RBI." The facility, first launched to settle Online Certificate Course on
export transactions, was later extended to imports in June 2023.
Artificial Intelligence
The move aligns with India's broader strategy to promote the rupee as a
settlement currency. Meanwhile, RBI Governor Sanjay Malhotra is set to in Insurance
announce the bimonthly Monetary Policy Committee (MPC) resolution, with For details please visit
markets anticipating a pause in the rate cycle after three successive cuts
totaling 100 basis points. www.smartonlinecourse.co.in

10 | 2025 | SEPTEMBER | BANKING FINANCE