PAYMENT BANKS CAN NOW LEND/LOAN TO ITS OWN EMPLOYEES OUT OF ITS OWN FUNDS

PAYMENT BANKS CAN NOW LEND/LOAN TO ITS OWN EMPLOYEES OUT OF ITS OWN FUNDS

 October 07, 2016

New OG prescribed by RBI wide circular

RBI/2016-17/80

DBR.NBD.No.25/16.13.218/2016-17

dated : October 6, 2016

The extant provisions in this regard as applicable to private sector banks, shall be applicable to PBs as well.

6. Banking Operations

6.1 Authorization of Access Points

i. The annual plans for opening of physical access points by the PBs for the initial five years would need prior approval of RBI. The first of such plan shall be submitted to RBI before commencement of business. After the initial stabilisation period of five years, and after a review, RBI may liberalize the requirement of prior approval.

ii. An employee of the PB should be available for sufficient duration, at a fixed location known to the customers at the district level, to attend to customer grievances and support the agent supervision. This fixed location may also be used to conduct the banking business of the PB, and it will be considered as a physical access point for the purposes of assessing the requirement of opening at least 25 per cent physical access points in rural centres.

The extant provisions in this regard as applicable to scheduled commercial banks, shall be applicable to PBs as well.

7. Bank deposits

(i) As provided in the current RBI directions, PBs can accept only savings and current deposits. The aggregate limit per customer shall not exceed ₹100,000, as provided in the Licensing Guidelines. However, the RBI will have no objection to the PBs making arrangements with any other scheduled commercial bank / SFB, for amounts in excess of the prescribed limits, to be swept into an account opened for the customer at that bank. This arrangement should be activated with the prior written consent of the customer.

(ii) The above limit shall apply to customer deposits and not to any security/earnest money deposit the bank may collect from any of its service providers in the ordinary course of business.

(iii) All RBI and BR Act provisions and RBI directions relating to minimum balance, inoperative accounts, unclaimed deposits including transfer of such deposits to the Depositors Education and Awareness Fund maintained by RBI on regular basis, nominations, cheques/drafts, etc., will be applicable to the PBs.

10.2 Customer education and protection

i. All customer grievance issues related to a particular access point should be addressed both at the access point and at the district level location mentioned above at paragraph 6.1 (ii).

ii. PBs will be covered by the Banking Ombudsman (BO) Scheme.

iii. The mechanism put in place by PBs to effectively resolve customer complaints and its communication to customers, and role of different levels (access point, controlling office (centre at the district level), and head office) in grievance redressal should be clearly communicated to RBI along with the application for licence.

iv. The customer service policy approved by the boards of the PBs should provide for continuous and intensive monitoring of redressing of customer grievance by the PBs.

v. RBI will closely supervise the grievance redress system of the bank through both onsite and off-site surveillance system.

11. Outsourcing of operations, internet banking and mobile banking

i. The extant provisions in this regard as applicable to scheduled commercial banks, shall be applicable to PBs as well.

ii. Loading of PPI balances through other bank credit cards will be permitted.

12. Implementation of Ind AS

Implementation of Ind AS would be applicable to PBs once they become scheduled banks. In view of the same, it is recommended that the PBs start adoption of the same in order to avoid transition costs subsequently

READ : RBI ISSUED OPERATING GUIDELINES FOR PAYMENT BANK