Page 53 - Banking Finance May 2020

RBI CIRCULAR

funds, as decided by the Reserve Bank from time nature of personal loans shall be allowed to be used
to time. for domestic transactions only. Further, adequate
ii) The interest rates on UCBs’ contribution to RIDF checks and balances shall be put in place to ensure that
and other funds, tenure of deposits, etc. will be the usage of such cards is restricted to facilitate online/
fixed by Reserve Bank of India from time to time. non-cash transactions. The restriction on cash
transaction will not apply to overdraft facility provided
iii) The misclassifications reported by the Reserve along with Pradhan Mantri Jan Dhan Yojana (PMJDY)
Bank's Department of Supervision, if any, would be accounts.
adjusted / reduced from the achievement of that
year to which the amount of declassification / 3. Prior to launching the product, the banks shall frame a
misclassification pertains, for allocation to various Board approved policy on issuance of electronic cards
funds in subsequent years. to above mentioned Overdraft Accounts, encompassing
appropriate risk management, periodic review
3. It has also been decided that, non-achievement of PSL procedures, grievance redressal mechanism, etc.,
targets will not be included as one of the criteria for which will be subject to supervisory review.
classifying a UCB as Financially Sound and Well
Managed (FSWM) with effect from March 31, 2021. 4. The card shall be issued subject to instructions on terms
However, it will continue to be taken into account while and conditions, security, grievance redressal,
granting regulatory clearances/approvals for various confidentiality of customer information as applicable for
purposes. debit cards and all other relevant instructions on card
operations issued by the Reserve Bank.
4. A copy of this circular should be placed before the
Board of Directors of your bank in its next meeting and (Dr. S. K. Kar)
a confirmation thereof should be sent to the concerned Chief General Manager
Regional Office of Department of Supervision of
Reserve Bank of India.
Interest Subvention (IS) and Prompt

(Neeraj Nigam) Repayment Incentive (PRI) for Short
Chief General Manager Term Crop Loans during the years 2018-

19 and 2019-20: Extended Period on
Electronic Cards for Overdraft Accounts
RBI/2019-20/225 account of Covid-19
April 23, 2020 RBI/2019-20/224
April 21, 2020
1. Please refer to Para II.2 of ‘Master Circular on Credit
Card, Debit Card and Rupee Denominated Co-branded 1. Please refer to our circular FIDD.CO.FSD.BC.No.15/
Pre-paid Card Operations of Banks and Credit Card 05.02.001/2018-19 dated March 7, 2019 regarding
issuing NBFCs’ dated July 1, 2015 wherein banks have Interest Subvention Scheme for Short Term Crop Loans
been permitted to issue debit cards to customers during the years 2018-19 and 2019-20.
having Saving Bank/Current Accounts but not to cash
credit/loan account holders. In this connection, it has 2. In the wake of the nationwide lockdown due to
been decided to permit banks to issue electronic cards outbreak of Covid -19 pandemic and the resultant
to natural persons having Overdraft Accounts that are restrictions imposed on movement of people, many
farmers are not able to travel to bank branches for
only in the nature of personal loan without any specific
payment of their short term crop loan dues. As per RBI
end-use restrictions. The card shall be issued for a
circular dated March 27, 2020 regarding Covid 19-
period not exceeding the validity of the facility and shall
Regulatory Package, moratorium has been granted for
also be subject to the usual rights of the banks as
lenders. three months on payment of installments falling due
between March 1, 2020 and May 31, 2020 in respect
2. The electronic card for Overdraft Accounts in the of all term loans including short term crop loans.

BANKING FINANCE | MAY | 2020 | 53