Page 11 - BANKING FINANCE APRIL 2024

RBI CORNER

allow customers to choose from mul- bulletin. Hundred basis points equal a plaints were received at the ORBIOs
tiple networks like Visa, Mastercard percentage point. and CRPC in 2022-23, showing an in-
and RuPay. Interest rates on TDs of more than one crease of 68.24 per cent, due to in-

It has also asked banks to stop enter- year duration ranged from 6 per cent tense public awareness initiatives and
the simplified process for lodging of
ing into exclusive agreements with to 7.25 per cent as of December-end
card networks. The move is positive for 2023. The lagged effect of pass complaints under RB-IOS," the report
NPCI's RuPay cards because of their through of policy rate increases into said.
UPI integration. However, most banks deposit and certificates of deposit rates
have flagship card products in partner- has exerted pressure on banks net in- RBI gives banks and NBFCs
ship with either Visa or Mastercard. terest margins, the bulletin said. a breather on AIF invest-

In 2022, RBI allowed cardholders to Depositors are making the most of high ments
store their card details in UPI apps and deposit rates. On an incremental ba-
make payments by scanning QR codes. sis, TDs accounted for nearly 97.6 per The Reserve Bank of India Wednesday
cushioned the blow on banks and
While the circular applies to credit cent of the total deposits during April- NBFCs that invest in Alternative Invest-
card networks, only RuPay has re- December 2023 and the share of cur- ment Funds (AIFs).
ceived permission to integrate with rent account and savings account
UPI. The directive will be effective in (CASA) deposits went down, RBI's quar- The investments will exclude equity
six months. terly Basic Statistical Return (BSR) investments, but debt and hybrid in-
data for December, 2023 show. struments will continue to face addi-
According to bankers, giving custom-
tional curbs the regulator had an-
ers an option to choose card network nounced earlier.
will require major changes in IT sys- Complaints received by RBI
tems. For most banks, the issue of Ombudsman and CRPC It also eased the provisioning require-
cards is a straight process - the cus- ments, giving relief to banks at the
tomer applies online, the bank ap- saw 68.24% jump in FY23 end of the fiscal year The RBI has also
proves the application, and the card is The number of complaints filed under exempted investments by regulated
sent for printing. the Reserve Bank's ombudsman entities (RE) in AIFs through interme-
schemes increased by over 68 per cent diaries such as fund of funds or mutual
Share of term deposits in to 7.03 lakh in the fiscal 2022-23, ac- funds. This could result in reversal of
cording a report released. some of the AIF provisions which
banks' total deposits up at weighed on the performance of banks
The complaints pertained to mobile/
60.3% in Dec 2023:RBI electronic banking, loans and ad- and NBFCs in the third quarter ended
December 2023. For instance, Kotak
The share of term deposits in sched- vances, ATM/debit cards, credit cards, Mahindra Bank had made a provision
uled commercial banks (SCBs) total pension payments, remittances, and of 190 crore and RBL Bank had made
deposits increased to 60.3 per cent in para banking, among others. a contingent provision of 115 crore on
December 2023 from 57.2 per cent in The Annual Report of the Ombudsman AIF investment.
March 2023, according to RBI's quar- Scheme 2022-23 is the first stand-alone
terly data. report under the Reserve Bank Inte- "With a view to ensuring uniformity in
implementation among the REs, and
Rising return on term deposits (TDs) is grated Ombudsman Scheme (RB-IOS), to address the concerns flagged in vari-
driving the compositional shift in de- 2021 elucidating the activities of the ous representations received from
posits of SCBs, the central bank said. 22 Offices of the RBI Ombudsman stakeholders, it is advised that down-
(ORBIOs), Centralised Receipt and Pro-
The weighted average domestic term stream investments shall exclude in-
cessing Centre (CRPC) and the Contact
deposit rate (WADTDR) on fresh and vestments in equity shares of the
outstanding deposits increased by 246 Centre during the year. debtor company of the RE, but shall
basis points (bps) and 180 bps, respec- "Under RB-IOS, 2021, there was a sig- include all other investments, including
tively, during May 2022 to December nificant increase in number of com- investment in hybrid instruments," RBI
2023 period, per RBI's latest monthly plaints and a total of 7,03,544 com- said in acircular.

10 | 2024 | APRIL | BANKING FINANCE