Page 9 - Banking Finance September 2022

RBI CORNER

ing from climate risks. The paper time, non-official directors on the cen- Rupee emerging as the second stron-
comes in the wake of India's commit- tral board of the Reserve Bank of In- gest currency," he said.
ments made at the COP26 summit. dia.
Recovery agents cannot
Marathe and Gurumurthy have been
RBI imposes Rs. 57.75-lakh re-nominated for a further period of humiliate borrowers: RBI
four years with effect from August 11, The RBIhas tightened the guidelines to
penalty on Suryoday small
2022, or until further orders, which- be followed by loan recovery agents
finance bank ever is earlier. acting on behalf of lenders. The new
RBI has imposed a monetary penalty guidelines bar recovery agents from
For Iyer and Chaturvedi, re-nomina-
of Rs. 57.75 lakh on Suryoday Small engaging in public humiliation of bor-
tions are for a period of four years af-
Finance Bank Ltd. (SSFB) for non-com- rowers or calling them before 8 am or
ter completion of their present tenure
pliance with its directions on "frauds after 7 pm.
on September 18, 2022, or until fur-
classification and reporting by com-
ther orders, whichever is earlier. Issuing the guidelines, the central bank
mercial banks and select FIs".
said that certain recent developments,
The examination of the Inspection Re- including growing incidents of unac-
India can sustain 2.5%-3%
port (IR) and all related correspon- ceptable practices followed by recov-
deficit: RBI
dence pertaining to the Statutory In- ery agents, were the reason for the
spection of the bank (conducted by RBI India can sustain a current account new guidelines.
with reference to its financial position deficit (CAD) of 2.5% to 3% of the gross In a speech in June, RBI governor
as on March 31, 2019) revealed, inter domestic product (GDP) without get- Shaktikanta Das had said, "We have
alia, non-compliance with the afore- ting into an external crisis, RBI deputy received complaints of customers be-
said RBI directions, per a central bank governor Michael Patra said. He added ing contacted by recovery agents at
statement. that India would also require to re- odd hours, even past midnight. There
verse the trend of decelerating savings are also complaints of recovery agents
The non-compliance with the afore-
rate, which began in 2012-13. using foul language."
said directions was to the extent the
bank failed to (i) furnish FMR (fraud He was speaking at an event organized The RBI has taken serious note of this
report) to RBI, with respect to certain by the RBI to celebrate 75 years of and would not hesitate to take action
cases of fraud, within three weeks of Independence (Azadi ka Amrit against errant regulated entities (REs),
their date of detection, and (ii) refer Mahotsav) in Bhubaneshwar. Patra's he added.
to State Police authorities certain statement comes at a time when some "The RBI, as part of guidelines on Fair
cases of fraud committed by its staff, forecasters are warning that the CAD Practices Code, has already advised
RBI said.
could exceed 3% of the GDP this year REs that they should not resort to in-
In furtherance to the same, the cen- because of widening gap between ex- timidation or harassment of their bor-
tral bank said a notice was issued to ports and imports. Trade deficit hit a rowers or calling them on phone at odd
the bank advising it to show cause as monthly high of $30 billion in July. hours in their debt collection efforts,"
to why a penalty should not be im- the RBI said. Currently, there are
Patra highlighted the inherent strength
guidelines on permissible hours for call-
posed on it for failure to comply with
of the Indian currency, pointing out
ing borrowers on the phone for recov-
the said directions, as stated therein.
the purchasing power using the Big
ery purposes regarding housing finance
Mac index.
RBI board gets 4 indepen- companies and microfinance loans.
"In terms of purchasing power parity,
dent directors the exchange rate appreciates with RBI reserves digital lending
The central government has re-nomi- the prosperity of a nation and a rise in
space for regulated enti-
nated Satish Kashinath Marathe, its productivity. The Indonesian Rupiah
ties
Swaminathan Gurumurthy, Revathy is set to become the strongest cur-
Iyer, and Sachin Chaturvedi as part- rency in the world, with the Indian In its effort to mitigate the concerns
BANKING FINANCE | SEPTEMBER | 2022 | 9