Page 8 - BANKING FINANCE APRIL 2024

RBI CORNER

Reserve Bank

Online portal for farm lower the security deposit paid by the cerns" observed in the non-bank
warehouse owner from the current 3% financier's gold loan portfolio.
loan to 1% of the value of stock. The minis-

Govt launched an online platform ter added that under this mechanism The central bank said the lapses, which
comprised regulatory violations, ad-
which seamlessly enables farmers to farmers will easily get loans without versely impact the interest of the cus-
get bank loans for the next crop any collateral. tomers. The RBI had carried out an
against their agricultural produce
inspection of the company regarding its
stocked with godowns registered with RBI approves merger of financial position as on 31 March 2023.
Warehouse Development and Regula-
tory Authority (WDRA). Fincare SFB with AU SFB During the inspection, RBI found "se-
The Reserve Bank of India has ap- rious deviations" in the assaying and
This facility to obtain post-harvest certification of gold used as collateral
loans from banks against the stock is proved the merger between Fincare for loans and during auctions upon
Small Finance Bank Ltd. and AU Small
expected to help farmers avoid distress default.
Finance Bank Ltd. The board of the
sale of fresh harvest and curtail depen-
bank had approved the merger in Oc- In a statement, the central bank noted
dence on money lenders.
tober 2023, following which it received violations in the maximum allowed
The digital gateway - e-Upaja Kisaan shareholder approval in November loan-to-value ratio and found that IIFL
Nidhi - launched by food and consumer 2023. Finance exceeded permitted cash col-
affairs minister Piyush Goyal allows "The effective date of the amalgam- lections, failed to adhere to the stan-
farmers to avail loan at 7% interest dard auction process, and lacked trans-
ation shall be April 1, 2024. All the
rate for 6-7 months and thereby en- parency in the fees charged by the
branches of Fincare Small Finance Bank
ables them to decide when to sell their company.
Ltd. will function as branches of AU
stocked produce to get a good price. Small Finance Bank Ltd. with effect
The online gateway has been devel- Government, RBI in talks
from April 1, 2024," RBI said in a state-
oped jointly by the departments of food to boost e-commerce ex-
ment.
and financial services, and Nabard.
ports
So far 5,634 warehouses are regis- RBI asks IIFL Finance to The commerce ministry is in discussions
tered with WDRA and more are being with the Reserve Bank of India (RBI) to
added every year. stop sanctioning gold facilitate e-commerce exports by
Goyal said this would help increase loans liberalising the Foreign Exchange Man-
farmers' income and make agriculture RBI has asked IIFL Finance to stop the agement Act (FEMA) guidelines,
an attractive proposition. He also an- sanctioning and disbursement of gold Santosh Kumar Sarangi, Director Gen-
nounced that the WDRA would soon loans, citing "material supervisory con- eral of Foreign Trade (DGFT) said.

BANKING FINANCE | APRIL | 2024 | 7