India


On 4 October 2024, the Reserve Bank of India (RBI) published a draft circular on Forms of Business and Prudential Regulation for Investments. This aims to isolate banks’ main business from its other risk-bearing non-core businesses, giving a fair competition to all banks and providing operational freedom to make investments in financial services/non-financial services companies and alternative investment funds. Comments from banks and other stakeholders are still open until 20 November 2024. Specific provisions will come into effect after two years while the rest will take effect immediately from the date of the final circular. For more information, please click here.

On 9 October 2024, the RBI published the Statement on Developmental and Regulatory Policies, which sets out various measures relating to regulations and payment systems. These include responsible lending conduct for regulated entities granting loans to micro and small enterprises (MSEs), capital raising avenues for Primary (Urban) Co-operative Banks, creation of the Reserve Bank Climate Risk Information System (RB-CRIS), enhancement of limits for certain UPI products and the introduction of a beneficiary account name look-up facility that will reduce the possibility of wrong credits and frauds. For more information, please click here.

On 10 October 2024, the RBI promulgated the Internal Risk Assessment Guidance for Money Laundering/Terrorist Financing (“Guidance Note”), which intends to support anti-money laundering (AML) / counter-terrorism financing (CTF) / counter-proliferation financing (CPF) compliance efforts of the regulated entities and to enhance the ability of the financial sector to detect and deter ML/TF/PF. For more information, please click here.

On 16 October 2024, the Securities and Exchange Board of India (SEBI) published a press release to hasten the availability of sales proceeds to foreign portfolio investors (FPIs) on settlement day as with domestic institutional participants. This aims to reinforce India’s position as a preferred and efficient investment destination for FPIs, reflecting the regulator’s commitment to creating an investor-friendly ecosystem. For more information, please click here.

Enforcement


On 10 October 2024, the RBI imposed a monetary penalty of ₹5.00 lakh on the Parwanoo Urban Co-operative Bank Limited, Parwanoo for non-compliance with the specific directions issued by RBI under the Supervisory Action Framework (SAF). In a statutory inspection of its financial position as of 31 March 2023, it was discovered that the bank was in violation of the SAF directions and had deficiencies in regulatory compliance. For more information, please click here.

On 14 October 2024, the RBI imposed a monetary penalty of ₹28.30 lakh on SG Finserve Limited (formerly known as M/s Moongipa Securities Limited) for non-compliance with specific conditions under which the company was issued the Certificate of Registration (CoR) by RBI. The company’s financial statements for FY 2022-23 revealed that it had accepted public funds and extended loans in violation of the specific conditions of the CoR issued to it. For more information, please click here.

On 14 October 2024, the RBI imposed a monetary penalty of ₹14.00 lakh on Arunachal Pradesh Rural Bank for non-compliance with certain directions issued by RBI on “Strengthening of Prudential Norms - Provisioning Asset Classification and Exposure Limit” and “Know Your Customer (KYC)”. In a statutory inspection of its financial position as of 31 March 2023, it was found that the bank failed to classify certain loan accounts as non-performing assets (NPA) resulting in divergence in asset classification of loan accounts and allocation of multiple Unique Customer Identification Codes (UCICs) to its individual customers. For more information, please click here.

On 28 October 2024, the RBI imposed a monetary penalty of ₹7.50 lakh on the Vaijapur Merchants Co-operative Bank Limited, Vaijapur, Maharashtra for non-compliance with specific directions issued by RBI under the SAF and KYC norms. In a statutory inspection of its financial position as of 31 March 2023, it was found that the bank has made donation to a certain entity and offered higher interest rates on deposits (fresh/renewal) than those offered by the State Bank of India. It also failed to put in place an effective system to identify and report suspicious transactions. For more information, please click here.

This document is provided for information purposes only and does not constitute legal, tax, investment, regulatory, accounting or other professional advice. For more information on the legal and regulatory status of IQ-EQ companies please visit www.iqeq.com/legal-and-compliance.