Page 54 - Banking Finance September 2019

RBI CIRCULAR

1. Attention of Authorised Dealers (ADs) is invited to the DPSS.CO.PD.No. 659/02.10.002/2014 -2015 dated
Foreign Exchange Management (Deposit) Regulations, October 10, 2014 on the subject.
2016 notified vide Notification No. FEMA 5(R)/2016-RB 2. It has come to our notice that transactions that have
dated April 1, 2016, as amended from time to time and failed due to technical reasons, non-availability of
the relevant directions issued thereunder. currency in ATMs, etc., are also included in the number
2. We advise that Sub-regulation (3) of Regulation 6 of of free ATM transactions.
the above Regulations, in terms of which a Company 3. It is hereby clarified that transactions which fail on
may accept deposits through issue of Commercial Paper account of technical reasons like hardware, software,
(CP), has been reviewed vis-à-vis other Statutes/ communication issues; non-availability of currency notes
Regulations – notably Section 45 U(b) of RBI Act, 1934 in the ATM; and other declines ascribable directly /
describing CP as one of the Money Market Instruments wholly to the bank / service provider; invalid PIN /
and Section 2(c) of Companies (Acceptance of validations; etc., shall not be counted as valid ATM
Deposits), Rules 2014 which excludes any amount transactions for the customer. Consequently, no charges
received against issue of, inter alia, CPs from definition
therefor shall be levied.
of deposits. It has also been considered that Foreign
4. Non-cash withdrawal transactions (such as balance
Exchange Management (Transfer or Issue of Security
enquiry, cheque book request, payment of taxes, funds
by a Person Resident outside India) Regulations, 2017
transfer, etc.), which constitute ‘on-us’ transactions
– FEMA 20(R), already allow investments in CPs issued
by the Indian Companies. (i.e., when a card is used at an ATM of the bank which
has issued the card) shall also not be part of the number
3. Therefore, with a view to bring in consistency in of free ATM transactions.
statutory provisions/regulations relating to Commercial
Papers (CPs), we advise that sub-regulation (3) of 5. This directive is issued under Section 10(2) read with
Section 18 of the Payment and Settlement Systems Act,
Regulation 6 of FEMA 5(R)/2016-RB has been deleted
2007 (Act 51 of 2007).
vide GOI Notification No. FEMA 5(R)(2)/2019-RB dated
July 16, 2019.
Yours faithfully
4. AD Category – I banks may bring the contents of this (P Vasudevan)
circular to the notice of their constituents and Chief General Manager
customers concerned.
5. The directions contained in this circular have been
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issued under sections 10(4) and 11(1) of the Foreign
Exchange Management Act, 1999 (42 of 1999) and are 1. c. Documentation 13. c. Hyderabad
without prejudice to permissions / approvals, if any, Identification 14. a. IIT Madras
required under any other law. Number 15. b. Hyderabad
2. a. Air India 16. b. Virat Kohli
Yours faithfully 3. a. Bangladesh
(R. K. Moolchandani) 4. b. Japan 17. c. Deepak Punia
Chief General Manager 18. a. Nepal
5. c. Andhra Pradesh 19. c. Cricketer

Usage of ATMs – Free ATM transactions 6. a. Nagaland 20. b. Second
7. a. Rs 10 lakh 21. a. Haryana
– Clarifications 8. b. Jyske Bank 22. c. Operation

RBI/2019-20/41 9. d. Dharmesh Number Plate
August 14, 2019 Mehta 23. a. Narendra Modi
10. c. VG Somani 24. a. Tamil Nadu
1. Please refer to our circulars DPSS.CO.PD.No. 316/ 11. b. India 25. c. 37
02.10.002/2014-2015 dated August 14, 2014 and 12. c. Tamil Nadu

54 | 2019 | SEPTEMBER | BANKING FINANCE