Beyond Monetary Policy: RBI's key measures for senior citizens, public information registry, securities mkt

Reduction in the Statutory Liquidity Ratio (SLR)

As a part of the transition to a Liquidity Coverage Ratio (LCR) of 100 percent by January 1, 2019, it is proposed to reduce the Statutory Liquidity Ratio (SLR) by 50 basis points (bps) from 20.0 percent to 19.50 percent of banks’ net demand and time liabilities (NDTL) from the fortnight commencing October 14, 2017. The ceiling on SLR securities under ‘Held to Maturity’ (HTM) will also be reduced from 20.25 percent to 19.50 percent of banks’ NDTL in a phased manner, i.e., 20.00 percent by December 31, 2017 and 19.50 percent by March 31, 2018.

High-level Task Force on Public Credit Registry

The Task Force (including various stakeholders like RBI, non-banking financial companies (NBFCs), industry bodies, and experts in information technology), will review the current availability of information on credit, the adequacy of existing information utilities, and identify gaps that could be filled by a registry. It will study the best international practices to determine the scope of the registry and the type of information and credit markets that it should cover. The Task Force will propose a state-of-the-art information system, allowing for existing systems to be strengthened and integrated, and suggest a modular, prioritized roadmap for developing a transparent, comprehensive and near-real-time registry for India. The Task Force will submit its report by April 4, 2018.

Legal Entity Identifier (LEI)

Banks will have to make it mandatory for corporate borrowers having aggregate fund-based and non-fund based exposure of Rs 5 crore and above from any bank to obtain Legal Entity Identifier (LEI) registration and capture the same in the Central Repository of Information on Large Credits (CRILC). This will facilitate assessment of aggregate borrowing by corporate groups, and monitoring of the financial profile of an entity/group. This requirement will be implemented in a calibrated, but time-bound manner. Necessary instructions will be issued by end-October 2017.

Inter-operability of Prepaid Payment Instruments (PPIs) –

RBI has examined the feedback received on the draft guidelines for issuance and operations of prepaid payment instruments put out in March this year. It has decided to rationalise the operational guidelines with a view to encouraging competition and innovation, and strengthening safety and security of operations, besides improving customer grievance redressal mechanisms. In line with the Vision for Payment and Settlement Systems in the country, the revised framework will pave the way for bringing inter-operability into usage of PPIs. Inter-operability amongst KYC compliant PPIs shall be implemented within six months of the date of issuance of the revised Master Directions, which will be issued by October 11, 2017.

Framework for Authorising Electronic Trading Platforms (ETP)

While all new electronic trading platforms (ETP) would be required to obtain authorisation under this framework, existing platforms would also be required to obtain post facto authorisation from the RBI. Trading on electronic platforms is being encouraged across the world as it enhances pricing transparency, processing efficiency and risk control. It also enables better market surveillance and, therefore, discourages market abuse and unfair trading practices. A draft framework will be placed on the website of the Reserve Bank for public feedback by end-October 2017.

Foreign Exchange Trading Platform for Retail Users

To ensure transparency and fair pricing for retail users (individuals and Micro, Small and Medium Enterprises) in the foreign exchange market, a mechanism is proposed for improving the pricing outcome for the “retail user” (to be defined in terms of transaction size) under which client pricing is directly determined in the market by providing customers with access to an inter-bank electronic trading platform where bid/offers from clients and Authorised Dealer banks can be matched anonymously and automatically.

Direct execution of orders by the customer would bring down the risk that banks face in warehousing transactions until they can be aggregated to a market lot. Banks may charge their customers a pre-agreed flat fee towards administrative expenses, which should be publicly declared. Overall, this should bring down the total cost faced by the retail customer in the foreign exchange market. A discussion paper on the proposal will be issued by end-October 2017 for public comments.