Page 9 - BANKING FINANCE OCTOBER 2021

RBI CORNER

Before being promoted to the new On the other hand, Cosmea Financial linked compensation as an expense in
post, Ajay Kumar was heading New Holdings Pvt Ltd is a Mumbai-based their books of account concurrently.
Delhi regional office of RBI as regional entity, which is involved in activities,
director. which are auxiliary to financial inter- RBI revamps loan transfer
Choudhary was the chief general mediation. It has four directors and securitisation rules
namely, Soumen Ghosh, Lav Ramji
manager-in-charge of department of The Reserve Bank of India (RBI) has
supervision in Mumbai and Deepak Chaturvedi, Mihir Kanak Sundhani,
Kumar was the chief general man- and Amit Agarwal. Ghosh was previ- revamped loan transfer and
ager in charge of department of infor- ously associated with Reliance Capital securitisation rules that are expected
mation technology at RBI. as its executive director and chief ex- to boost liquidity in the system further
ecutive officer for nine years. and improve transparency and corpo-
Among the three, Ajay Kumar has the rate governance.
longest residual service of 8 years be- RBI issues norms on in-
fore he attains 60 years, followed by RBI allowed lenders to transfer their
Deepak Kumar who has 3 residual centives of private banks' loan exposures classified as fraud to
years and Choudhary of 2 years asset reconstruction companies
top officials (ARCs). It stressed on disclosures and
Currently, RBI as 12 executive direc- The RBI said the fair value of the told lenders to include the financial
tors and 30 chief general managers, share-linked incentives paid to chief impact of any transfer into their profit
who come under 4 deputy governors. executive officers, whole-time direc- and loss account for the period when
RBI governor Shaktikanta Das' three- tors and other key functionaries by the transfer is completed. It has also
year term is coming to an end in De- the private banks should be allowed lenders to securitise single
cember this year. Das had succeeded recognised as an expense during the loans and loans with bullet payments
former RBI governor Urijit Patel who relevant accounting period. allowing more flexibility to them.
quit abruptly 3 years ago. The RBI has also asked all banks, in- "These measures are far more re-
cluding local area banks, small finance
Reserve Bank gets 2 more banks and foreign banks to comply laxed than the previous guidelines and
offer more bandwidth to lenders in
applications for SFB li- with its directions for all share-linked their liquidity management. But we
instruments granted after the ac-
cence are a little surprised about the timing
counting period ending March 31,
The Reserve Bank of India (RBI) said 2021. of it since most lenders, especially the
it has received applications from two large ones, are flush with liquidity at
more entities under the "on-tap" The central bank had issued guide- present," a senior official with a rat-
small finance bank licensing guidelines lines on the compensation of whole- ing firm said.
of 2019, taking the total number of time directors/ chief executive offic- The regulator has also offered relief to
applicants to six. ers/ material risk takers and control lenders by allowing them to shift the
function staff in November 2019.
Cosmea Financial Holdings Pvt Ltd and responsibility of reporting, monitoring,
Tally Solutions Pvt Ltd have applied to Issuing a clarification in this regard, filing of complaints with law enforce-
the RBI for a small finance bank li- the RBI said, "the fair value (of share- ment agencies and proceedings re-
linked incentives) ...should be
cence, RBI informed in a statement. lated to fraudulent loans to the ARCs.
recognised as expense beginning with
Bengaluru-based Tally Solutions Pvt the accounting period for which ap- These are part of the sweeping
Ltd is a technology and innovation proval has been granted". changes RBI announced in the loan
company, which, according to its transfer and securitisation rules. The
website, delivers business software for In terms of the extant guidelines, regulator has mandated banks to fol-
small and medium businesses (SMBs). share-linked instruments are required low a board approved policy on this
Established in 1986, Tally Solutions is to be fairly valued on the date of subject. It has directed banks to en-
headed by Tejas Goenka, with Sheela grant using the Black-Scholes model. sure that arm's length distance is
Goenka as the chairperson, and The RBI issued the clarification saying maintained between personnel in-
Bharat Goenka as the vice chairper- "it has been observed" that banks do volved in transfer/ acquisition of loans
son of the company. not recognise grants of the share- and the originator of the loan. T

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