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Business EYE JULY 30, 2021 | The Indian Eye 32

govt and rbi give relief to customers

as banks faces stress during tough time

Reserve Bank of India imposes a penalty of Rs 5 crore on Axis Bank for contravention

of certain provisions of directions including on cybersecurity framework

Our Bureau the uncertainty in finality of

New Delhi the payments as the settlement
is carried out in central bank
he financial results of money, the notification said.
HDFC Bank for the pe- Earlier, the Reserve Bank
Triod April to June 2021 of India said it has imposed a
have got a few experts worried. penalty of Rs 5 crore on Axis
The gross non-performing as- Bank for contravention of cer-
sets (NPAs), or the bank’s bad tain provisions of directions is-
loans, jumped to 1.47% of its sued by the RBI, including on
total advances. They were at cybersecurity framework.
0.81% as of 31 December 2020. The contravention of/
The Indian banking industry non-compliance with the di-
has been under crisis for some rections has been revealed by
time. The crisis has taken a se- — the examination of the Risk
rious turn during the pandem- Assessment Reports pertain-
ic as some banks faced closure ing to ISE 2017, ISE 2018 and
amid new challenges. Now, Members of the Bank of India (BOI) officers association hold posters ISE 2019; the report of scrutiny
both the Reserve Bank of India during a candlelight vigil protest against the privatization of bank carried out by RBI in the back-
(RBI) and government has tak- sectors, at the BOI branch PTI building, in New Delhi . (ANI) drop of the incident relating to
en steps to alleviate the crisis. a fraud and related correspon-
Bringing sigh of relief for the said at the press briefing. trade receivables discounting dence thereto; and the incident
depositors in stressed banks, Apart from DICGC Bill, system (TReDS) platforms. report submitted by the bank in
the Union Cabinet on Wednes- 2021, the cabinet also approved In a notification issued on June 2020 related to a few sus-
day gave nod to the Deposit In- the Limited Liability Partner- Wednesday, the RBI said that pected transactions and related
surance Credit Guarantee Cor- ship Amendment Bill. on a review of extant arrange- correspondence.
poration (DICGC) Bill, 2021. “To provide ease of doing ments and after detailed dis- Notices were issued to the
Addressing media persons, business benefits to law-abiding cussions with PSPs, it is ad- bank advising it to show cause
Union Finance Minister Nir- corporators in LLP firms, the vised that, “in the first phase, as to why penalty should not be
mala Sitharaman said, “The criminality has been removed. authorized non-bank PSPs, imposed on it for its failure to
proposed law will insure bank A penalty in the form of a fine viz. PPI issuers, card networks comply with the directions.
deposits up to Rs 5 lakh. Un- has been decided for violations and white label ATM operators After considering the bank’s
der DICGC Bill 2021, 98.3 of general trends. This boosts shall be eligible to participate replies, oral submissions, and
per cent of all deposits will get Aatmanirbhar Bharat,” Union in CPS as direct members”. examination of additional sub-
covered and in terms of depos- Minister Anurag Thakur said In April 2021 monetary pol- missions made by the bank, the
it value, 50.9 per cent deposit during the briefing. icy, the central bank had an- RBI came to the conclusion
value will be covered. Global Also on Wednesday, the nounced that it will encourage that the charges of non-compli-
deposit value is only 80 per Reserve Bank of India allowed participation of non-banks in ance with/contravention of the
cent of all deposit accounts. It authorized non-bank pay- the RBI-operated CPS-RTGS directions were substantiated
only covers 20-30 per cent of ment system providers (PSPs) and NEFT systems, in a phased and warranted imposition of
deposit value.” to participate in centralized manner. The central bank said monetary penalty, the central
“The Union Cabinet has payment systems (CPS), such direct access for non-banks to bank said.
decided that depositors of as real-time gross settlement CPS lowers the overall risk in The RBI, however, add-
troubled banks would get their (RTGS) and national electron- the payments ecosystem. ed the imposition of penalty is
money back within 90 days. As ic fund transfer (NEFT), as di- It also brings advantages based on the deficiencies in reg-
of now, several depositors of rect members. to non-banks like reduction in ulatory compliance and is not
troubled lenders are waiting for PSPs include prepaid pay- cost of payments, minimizing intended to pronounce upon
longer periods to retrieve the ment instrument (PPI) issu- dependence on banks, reduc- the validity of any transaction
money deposited in the bank ers, card networks, white label ing the time taken for com- or agreement entered into by
accounts,” the finance minister ATM (WLA) operators and pleting payments, eliminating the bank with its customers.

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