This Statement units out numerous developmental and regulatory coverage measures referring to (i) Regulation and Supervision; and (ii) Payment and Settlement programs.
I. Regulation and Supervision
1. Discussion Paper on Expected Loss Based Approach for Loan Loss Provisioning by Banks
The inadequacy of the incurred loss strategy for provisioning by banks and its procyclicality, which amplified the downturn following the monetary disaster of 2007-09, has been extensively documented. One of the foremost parts of the worldwide response to those findings have been a shift to anticipated credit score loss (ECL) regime for provisioning. As an extra step in the direction of converging with globally accepted prudential norms, it’s proposed to undertake anticipated loss strategy for loss allowances required to be maintained by banks in respect of their exposures. As a primary step, a dialogue paper on the varied features of the transition shall be issued shortly.
2. Discussion Paper on Securitisation of Stressed Assets Framework (SSAF)
In September 2021, the Reserve Bank had issued the revised framework for securitisation of normal property. As regards securitisation of non-performing property, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 presently supplies a framework for such securitisations to be undertaken by Asset Reconstruction Companies (ARCs) licensed below the Act. However, primarily based on market suggestions, stakeholder consultations and the suggestions of the Task Force on Development of Secondary Market for Corporate Loans (RBI, 2019), it has been determined to introduce a framework for securitisation of confused property along with the ARC route, much like the framework for securitisation of normal property. Accordingly, a Discussion Paper (DP) detailing related contours of the proposed framework shall be issued shortly inviting feedback on sure particular features.
3. Internet Banking Facility for Customers of Regional Rural Banks (RRBs)
The RRBs are presently allowed to offer Internet Banking facility to their prospects with prior approval of the Reserve Bank, topic to fulfilment of sure monetary and non-monetary standards. Keeping in view the necessity to promote the unfold of digital banking in rural areas, the factors for RRBs to be eligible to offer web banking are being rationalised and pointers are being issued individually.
II. Payment and Settlement Systems
4. Regulating Offline Payment Aggregators
Payment Aggregators (PAs) play an necessary position within the funds ecosystem and therefore have been introduced below rules in March 2020 and designated as Payment System Operators (PSOs). The present rules are, nonetheless, relevant to PAs processing on-line or e-commerce transactions. These rules don’t cowl offline PAs who deal with proximity/face-to-face transactions and play a big position within the unfold of digital funds. Keeping in view the same nature of actions undertaken by on-line and offline PAs, it’s proposed to use the present rules to offline PAs as effectively. This measure is anticipated to usher in synergy in regulation protecting actions and operations of PAs other than convergence on requirements of knowledge assortment and storage. Detailed directions shall be issued individually.
(Yogesh Dayal)
Chief General Manager
Press Release: 2022-2023/968
