Page 8 - BANKING FINANCE FEBRUARY 2016 ONLINE

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RBI CORNER

RBI issues guidelines for currency transaction trade RBI to monitor for posi-

The Reserve Bank of India recently is- million (Rs.100 crore) for dollar-rupee tive use of bank licenses
sued guidelines that will allow indi- contracts and $5 million (Rs.33.85
vidual and foreign portfolio investors to crore) for non dollar-rupee contracts The Reserve Bank of India will study
trade in currency futures in India. per exchange for residents and FPIs the transfor-
remain unchanged. "This is not a sig- mation of the
The guidelines, which were initially out- nificantly large move but can be seen successful
lined in the RBI's monetary policy in Sep- more as a verbal signal that the RBI payments
tember 2015, also seeks to extend ex- will be intervening in the currency bank appli-
change-traded contracts from the exist- markets," said Saugata Bhattacharya,
ing dollar-rupee pair only to cross cur- chief economist with Axis Bank. cants into banking entities and en-
rency pairs of euro-dollar, pound ster- sure they perform activities for which
ling-dollar and dollar-Japanese yen also. The RBI officials had indicated that the they have been given licence, said C.
This would help companies hedge their central bank would be intervening in D. Srinivasan, Chief General Man-
exposures in foreign currencies and will the currency futures market, a devel- ager, department of nonbanking
also boost cross currency strategies. opment that hinted that RBI would regulation.
move in actively to defend the rupee.
But the existing position limits of $15 "That is one area where the NBFC
regulatory department and the pay-
RRBs lending 75% to priority sectors as against 60% ments system department will have
to work, to see they are established
previously for the purpose they have been cre-
ated and function smoothly,"
The regional rural banks (RRBs) are up RRBs in bringing about financial inclu- Srinivasan said.
against a higher priority sector lending sion, it added.
(PSL) target from January 1. RBI cancels Registration
Among significant revisions in the PSL
The RBI said 75 per cent of RRBs' out- norms are - upping of the limit on loans Certificates of 56 NBFC's
standing advances - as against 60 per to individual farmers to Rs. 50 lakh
cent- should be for PSL, which also in- from Rs. 10 lakh against pledging/hy- The Reserve Bank of India has can-
cludes loans to micro and small enter- pothecation of agricultural produce for celled the regis-
prises, weaker sections, housing and a period not exceeding 12 months, and tration certifi-
education. However, the amounts they doubling the aggregate limit to Rs. 2 cates of 56 non-
can lend to segments, such as agricul- crore per borrower in the case of loans banking finan-
ture and medium enterprises, social in- to, among others, corporate farmers, cial companies
frastructure and renewable energy un- producer organisations/ companies of (NBFCs), including that of Bajaj
der the PSL category are liberalised. individual farmers, and partnership Finserve Ltd, ABNL Investment Ltd,
firms/co-operatives engaged in agricul- which means the companies will no
The PSL norms have been revised con- ture and allied activities. longer be able to transact business
sidering the growing significance of as a non-banking financial institution.

RBI may set up regulatory for e-commerce players en- The NBFCs includes 16 from Kolkata;
14 are Mumbai-based, 3 from
tering lending space Chennai, 1 from New Delhi and other
are based in Gujarat (Ahmedabad),
The Reserve Bank of India (RBI) may create a regulatory capacity to monitor Assam, Punjab, Rajasthan,
new entities such as the internet marketplace that are into lending. Karnataka, Kerala, Maharashtra,
Uttar Pradesh and Andhra Pradesh.
In a letter to the RBI staff, governor Raghuram Rajan said, "Going forward, we
need to create a regulatory capacity to monitor new entities like the Internet The release did not specify any rea-
marketplace that are also getting into lending." "Transparency and good gov- son for cancellation of the registra-
ernance are ways to protect ourselves from roving enquiries-everyone should tion certificate.
recognise that an effective regulator has enemies, and like Caesar's wife, should
be above all suspicion," Raghuram Rajan said.

8 | 2016 | FEBRUARY | BANKING FINANCE

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