Page 8 - Banking Finance April 2022

RBI CORNER

Reserve Bank

News

RBI cautions public against selves that the application used or the new bad loan norms for non-banking
entity they are dealing with is finance companies (NBFCs) by six
prepaid payment instru- authorised to carry out the activity it months.

ments issued by unautho- performs or assures to perform," it The norms pertain to upgrading NPAs
said.
rised entities (non-performing assets) to standard by
NBFCs. In November, the RBI had said
The RBI said Gurugram-registered RBI amends payments sys- the new norms will be effective March
'sRide Tech Private Limited' is operat- 31, 2022, which has now been post-
ing a pre-paid instrument (wallet) tems rules poned to September.
through its car-pooling app 'sRide' The Reserve Bank of India issued
without obtaining the required permis- amended Payments and Settlement According to an India Ratings report,
sions, as it cautioned the public against Systems Regulations that allows com- bad loans for NBFCs are likely to in-
using applications issued by panies wanting to run payment busi- crease by one-third due to the new
unauthorised entities. As such, any nesses to seek licenses from the regu- norms. Earlier, lenders would upgrade
lator. accounts when the borrowers get back
person dealing with sRide Tech Private
Limited, will be doing so at their own The licensing application should include on track with their instalments. The
risk, the central bank said in a state- process flow of the operator, technol- new rules said that the loan could not
ment. ogy platform to be used, security fea- be upgraded until all the money due
tures and inter-operability with other was recovered.
RBI said sRide Tech Private Limited is
operating a semi-closed (non-closed) payment system operators. RBI's regulatory body
pre-paid instrument (wallet) through As per the rules payment system, op-
its car-pooling app 'sRide' without ob- erators will be required to furnish all seeks withdrawal of 100
taining the required authorisation from information and documents desired circulars
RBI under the provisions of the Pay- from the RBI from time to time. The Reserve Bank of India's Regula-
ment and Settlement Systems Act, The system provider also has to submit tions Review Authority (RRA) has ad-
2007. its annual accounts to the regulator vised to withdraw additional 100
The RBI urged people to exercise ut- three months after account closing circulars to ease the compliance bur-
most caution while using such applica- along with a copy of its audited balance den on entities under RBI regulatory
tion/s, dealing with and before parting sheet. ambit.
with their money to any such It had recommended the withdrawal
unauthorised entity. RBI delays new bad loan of 150 circulars in the first tranche in
"In their own interest, members of rules for non-banks November 2021.

public should verify and satisfy them- The RBI has extended the roll-out of The RRA has also recommended the

8 | 2022 | APRIL | BANKING FINANCE