The Reserve Bank of India (RBI), in a series of decisions, has decided to increase the threshold for non-callable deposits and has directed mandated credit information companies to put in place a compensation framework for late updates or corrections of credit information.
As per the latest decision, the minimum amount for offering non-callable TDs can be increased from ₹15 lakh to ₹1 crore.
This means that all domestic term deposits accepted from individuals of ₹1 crore and below will have an early withdrawal facility, the RBI said. The move aims to provide more flexibility to depositors.
These instructions also apply to non-resident (external) rupee deposits (NRE) or ordinary non-resident (NRO) deposits.
As per the existing provisions, banks have the freedom to offer term deposits without facility of early withdrawal provided that all term deposits accepted from individuals for ₹15 lakh and below have facility of early withdrawal.
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The amended rules now allow the non-callable deposit threshold to be increased by ₹1 crore.
To strengthen customer service of credit information companies and credit institutions, RBI has asked them to introduce a remuneration framework to strengthen and improve the effectiveness of the complaint process and customer service.
For this purpose, according to RBI, CICs will send notifications via SMS/email to customers when the specified users (SUs) access their Credit Information Report (CIR) and the notifications will be sent only when the CIR request is in the CIR of reflects the customer. CIs also send default or overdue (DPD) notifications on existing credit facilities.
For late updating or rectification of credit information, RBI has stated that complainants will be entitled to compensation of ₹100 per calendar day in case their complaint is not resolved within a period of thirty calendar days from the date of first filing of the complaint.
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“A CI shall pay compensation to the complainant if the CI fails to send updated credit information to the CICs by making an appropriate correction or addition within twenty-one (21) calendar days of notification by the complainant or a CIC or in a different way. ” said an RBI notification.
The RBI also reviewed instructions on bulk deposits for Regional Rural Banks (RRBs). So far, bulk deposits meant single rupee term deposits of ₹2 crore and above for regular commercial banks, excluding regional rural banks, and single rupee term deposits of ₹15 lakh and above for RRBs.
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After a review, the RBI has decided to increase the bulk deposit limit for regional rural banks. Accordingly, for regional rural banks, “bulk deposit” now means “single rupee term deposits of ₹1 crore and above”.
Additionally, RBI has also sought comments on the draft master guidelines on risk management and code of conduct in outsourcing of financial services. “Comments/feedback, if any, can be sent by email with the subject line “Comments on the Draft Master Guideline on Risk Management and Code of Conduct in Outsourcing of Financial Services” until November 28, 2023,” the central bank says.
It states that the draft guidelines have been prepared by incorporating, updating and, where appropriate, harmonizing existing guidelines to enable regulated entities to have all current financial services outsourcing instructions available in one place for reference.
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