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Banking sector this week continued with large number of companies being discussed for insolvency and Bankruptcy proceedings. But the biggest news was that consumers will not have to pay more for card transactions up to Rs 2,000.
Debit card transactions cheaper
From January 1 next year, you will not be charged fees on debit card transactions up to Rs 2,000 for at least two years.
In an effort to boost digital payments, the Union Cabinet has decided to waive the merchant discount rate (MDR) applicable on all debit cards, BHIM and UPI transactions up to Rs 2,000. The government will reimburse the same to the banks for a period of two years, starting January 1, 2018.
Digital players had already expressed their reservations after the RBI had released new norms capping the MDR for merchants categorising them based on their annual turnovers.
NPAs
Apart from the debit card charges, the hottest topic of the banking sector -- non-performing assets (NPAs) -- saw more developments with the deadline to resolve cases from the RBI's second list coming to an end.
Almost 23 from the 28 NPA cases from the second list given to banks in August, will have to be filed at the insolvency courts by the end of December.
Further, in order to help smaller companies the government is reviewing the insolvency provisions, including recent amendments barring defaulting promoters from bidding for their own assets undergoing insolvency.
Lawyers, corporates, bankers and other experts have pointed out that the new clause does not distinguish between ordinary and wilful defaulters.
The government has now sought comments from the public to review the provisions and give feedback and suggestions along with brief justification may be sent through the online facility available on MCA website up to January 10, 2018.
RBI Governor Urjit Patel on Indian economy vs global
Reserve Bank of India Governor Urjit Patel at an event said that ensuring price stability through monetary policy and current account deficit at sustainable levels have enabled us the build-up of “buffers” against unforeseen shocks.
RBI penalty to Syndicate Bank and IndusInd Bank
Syndicate Bank has emerged as the latest entrant on the Reserve Bank of India's hit list for violation of norms.
The central bank on December 12 imposed a monetary penalty of Rs 5 crore on the public sector lender for violating the Know Your Customer (KYC)/Anti-Money Laundering (AML) norms.
Earlier, RBI had penalised Union Bank of India Rs 2 crore for non-compliance of KYC norms.
In October, Yes Bank was fined Rs 6 crore for non-compliance of asset disclosures and security breach disclosure rules while IDFC Bank was fined Rs 2 crore not adhering to the loans and advances norms.
A day earlier, IndusInd was imposed with a fine of with Rs 3 crore for non-compliance with central bank’s directions on income recognition and asset classification norms.
India, which has been beefing up its foreign exchange reserves saw a decline by USD 1.044 billion to USD 400.897 billion in the week to December 8 due to a steep fall in foreign currency assets, the Reserve Bank of India (RBI) said on Friday.
In the previous week, the reserves had increased by USD 1.2 billion to USD 401.942 billion.
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