Did you miss these important RBI's rulings amid over-floating Covid news?
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Did you miss these important RBI’s rulings amid over-floating Covid news?

These days in India, COVID-19 cases are rising in an unmanageable way and the health infrastructure of the country is almost on the verge of collapse. However, the proactive governments at the center and in states are gradually ramping up the supplies to control the situation. Nevertheless, the situation is still alarming. In such a scenario, it is very natural that headlines and editorials of all the news and media publishing houses are being occupied by Covid-19 related news and eventually you miss many of the important pieces of news from those areas other than health. So here below is the 2 minutes read to update you quickly about the latest happenings in BFSIs.


  • For Banks’ MD, CEO, and WTD: RBI in its recent ruling bars the bank to cap the tenures of its MD, CEO, and WTD (Whole Time Directors) for a maximum of 15 years. These stakeholders, however, can be re-appointed after undergoing a minimum of 3 years cooling period. Also, during this cooling period, they are restricted to not associate with the bank in any capacity, either directly or indirectly.


  • For Banks/NBFCs Statuary Auditors: Recently, RBI issued mandatory guidelines for commercial banks, NBFCs (including housing financial companies), and Urban co-operative banks for the appointment of Statuary Central Auditors for FY21-22 in order to maintain the independence of the central auditors. The rulings instruct these banks about the eligibility criteria, numbers of appointees, tenure (minimum 3 years), and rotation. However, non-deposit taking NBFCs with asset size below Rs. 1000 crore, RRBs are exempted.


  • For Auto-debit/Recurring Payments: Earlier, in December, RBI issued guidelines on any recurring transaction using Debit, Credit Cards, UPIs, PPIs, and Wallets by banks shall require the customer’s prior consent. In this regard, the RBI has a fixed cap of Rs 5000 for auto-debit, and beyond that, the banks are mandated to send advanced notice of balance deduction. And, beyond the cap of Rs 5000, the banks are required to introduce an Additional Factor Authentication (AFA).


  • For Foreign Banks Operating in India: 3 years ago, RBI asked banks to store their entire data of the domestic customers in a system in India only. This local data storage has appeared again in the news as RBI recently restricted two big foreign banks from on-onboarding any further domestic customers as they were not able to adhere to the compliance.


  • For Dormant Accounts: Until recently, there was no instruction for categorizing a bank account a Dormant by banks but in the recently issued guidelines, RBI has asked the bank to review all those bank accounts with credit or debit operation for one year. And, along similar lines, Wallet companies can also review wallets left non-operational for more than one year. Here, RBI also allowed customers to transfer the balance from wallet to bank account if they wish to close it.


  • For Merchants: Amid the growing number of cybersecurity breach cases, the RBI has stripped the power of popular merchants such as Amazon, Make My Trip, Netflix, Zomato, Microsoft, and others to store the card details of the customers.


  • For Payment Companies: With reference to one of the biggest data leakage of over 100 million customers, the RBI has tightened its grip over the payment companies by asking them to submit the compliance adherence certificate twice a year. This submission has to duly signed by their CEOs.


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Sachin Rajput
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