Bank for International Settlements (BIS)

Bank for International Settlements is the oldest international financial institution. It serves central banks in their pursuit of monetary and financial stability, fosters international cooperation in those areas and acts as a bank for central banks.  BIS Established in 1930, and owned by 60 central banks hold 95% of world GDP.

In outline, the BIS pursues this mission by:

• facilitating dialogue and collaboration among central banks and other authorities
that are responsible for promoting financial stability;
• conducting research on policy issues confronting central banks and financial
supervisory authorities;
• acting as a prime counterparty for central banks in their financial transactions; and
• serving as an agent or trustee in connection with international financial operations.

The Basel III framework is a central element of the Basel Committee’s response to the global financial crisis developed  by Basel Committee on Banking Supervision in response to the financial crisis of 2007-09.


Sixty central banks and monetary authorities are currently members of the BIS :

  1. Bank of Algeria
  2. Central Bank of Argentina
  3. Reserve Bank of Australia
  4. Central Bank of the Republic of Austria
  5. National Bank of Belgium
  6. Central Bank of Bosnia and Herzegovina
  7. Central Bank of Brazil
  8. Bulgarian National Bank
  9. Bank of Canada
  10. Central Bank of Chile
  11. People’s Bank of China
  12. Central Bank of Colombia
  13. Croatian National Bank
  14. Czech National Bank
  15. Danmarks Nationalbank (Denmark)
  16. Bank of Estonia
  17. European Central Bank
  18. Bank of Finland
  19. Bank of France
  20. Deutsche Bundesbank (Germany)
  21. Bank of Greece
  22. Hong Kong Monetary Authority
  23. Magyar Nemzeti Bank (Hungary)
  24. Central Bank of Iceland
  25. Reserve Bank of India
  26. Bank Indonesia
  27. Central Bank of Ireland
  28. Bank of Israel
  29. Bank of Italy
  30. Bank of Japan
  31. Bank of Korea
  32. Bank of Latvia
  33. Bank of Lithuania
  34. Central Bank of Luxembourg
  35. National Bank of the Republic of North Macedonia
  36. Central Bank of Malaysia
  37. Bank of Mexico
  38. Netherlands Bank
  39. Reserve Bank of New Zealand
  40. Central Bank of Norway
  41. Central Reserve Bank of Peru
  42. Bangko Sentral ng Pilipinas (Philippines)
  43. National Bank of Poland
  44. Bank of Portugal
  45. National Bank of Romania
  46. Central Bank of the Russian Federation
  47. Saudi Arabian Monetary Authority
  48. National Bank of Serbia
  49. Monetary Authority of Singapore
  50. National Bank of Slovakia
  51. Bank of Slovenia
  52. South African Reserve Bank
  53. Bank of Spain
  54. Sveriges Riksbank (Sweden)
  55. Swiss National Bank
  56. Bank of Thailand
  57. Central Bank of the Republic of Turkey
  58. Central Bank of the United Arab Emirates
  59. Bank of England
  60. Board of Governors of the Federal Reserve System (United States)

The BIS has its head office in Basel, Switzerland, and representative offices in
the Hong Kong Special Administrative Region of the People’s Republic of China
(Hong Kong SAR) and in Mexico City.

Unregulated Deposit Scheme

“Unregulated Deposit Scheme” means a Scheme or an arrangement under which deposits are accepted or solicited by any deposit taker by way of business and which is not a Regulated Deposit Scheme, as specified under column (3) of the First Schedule. [S.2 17]

Regulated Deposit Schemes

(1) The Regulator and Regulated Deposit Scheme refers to the regulators and schemes and arrangements listed in the following Table, namely: –

Table

Sl. No.

Regulator

Regulated Deposit Scheme

(1)

(2)

(3)

1.

The Securities and Exchange Board of India

(i) Any scheme or an arrangement [as defined under section 11AA of the Securities and Exchange Board of India Act, 1992 (15 of 1992)] launched, sponsored or carried out by a Collective Investment Management Company registered with the Securities and Exchange Board of India under the Securities and Exchange Board of India (Collective Investment Scheme) Regulations, 1999.

(ii) Any scheme or an arrangement registered with the Securities and Exchange Board of India under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.

(iii) Any scheme or an arrangement, pursuant to which funds are managed by a portfolio manager, registered under the Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993.

(iv) Any scheme or an arrangement regulated under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 or providing for employee benefits as permitted under the Companies Act, 2013 (18 of 2013).

(v) Any other scheme or an arrangement registered under the Securities and Exchange Board of India Act, 1992 (15 of 1992), or the regulations made thereunder.

(vi) Any amount received as contributions in the nature of subscriptions to a mutual fund registered with Securities and Exchange Board of India under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.

2.

The Reserve Bank of India

(i) Any scheme under which deposits are accepted by Non-Banking Financial Companies as defined in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934) and registered with the Reserve Bank of India; or any other scheme or an arrangement registered under the Reserve Bank of India Act, 1934.

(ii) Any scheme or an arrangement under which funds are accepted by individuals or entities engaged as Business Correspondents and Facilitators by banks subject to the guidelines and circulars issued by the Reserve Bank of India from time to time.

(iii) Any scheme or an arrangement under which funds are received by a system provider operating as an authorised payment system under the Payment and Settlement Systems Act, 2007 (51 of 2007).

(iv) Any other scheme or an arrangement regulated under the Reserve Bank of India Act, 1934 (2 of 1934), or the guidelines or circulars of the Reserve Bank of India.

3.

The Insurance Regulatory and Development Authority of India

A contract of insurance pursuant to a certificate of registration obtained in accordance with the Insurance Act, 1938 (4 of 1938).

4.

The State Government or Union territory Government

(i) Any scheme or an arrangement made or offered by a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912) or a society being a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any State or Union territory.

(ii) Any scheme or an arrangement commenced or conducted as a chit business with the previous sanction of the State Government in accordance with the provisions of the Chit Funds Act, 1982 (40 of 1982).

(iii) Any scheme or an arrangement regulated by any enactment relating to money lending which is for the time being in force in any State or Union territory.

(iv) Any scheme or an arrangement by a prize chit or money circulation scheme under section 11 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (43 of 1978).

5.

The National Housing Bank

Any scheme or an arrangement for acceptance of deposits registered under the National Housing Bank Act, 1987 (53 of 1987).

6.

The Pension Fund Regulatory and Development Authority

Any scheme or an arrangement under the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013).

7.

The Employees’ Provident Fund Organisation

Any scheme, Pension Scheme or Insurance Scheme framed under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952).

8.

The Central Registrar, Multi-State Co-operative Societies

Any scheme or an arrangement for acceptance of deposits from voting members by a Multi-State Co-operative Society registered under the Multi-State Co-operative Societies Act, 2002 (39 of 2002).

9.

The Ministry of Corporate Affairs, Government of India

(i) Deposits accepted or permitted under the provisions of Chapter V of the Companies Act, 2013 (18 of 2013).

(ii) Any scheme or an arrangement under which deposits are accepted by a company declared as a Nidhi or a Mutual Benefit Society under section 406 of the Companies Act, 2013 (18 of 2013).

(2) The following shall also be treated as Regulated Deposit Schemes under this Act, namely: –

(a) deposits accepted under any scheme or an arrangement registered with any regulatory body in India constituted or established under a statute; and

(b) any other scheme as may be notified by the Central Government under this Act.

Banning of Unregulated Deposit Schemes

3. Banning of Unregulated Deposit Schemes. – On and from the date of commencement of this Act, –

(a) the Unregulated Deposit Schemes shall be banned; and

(b) no deposit taker shall, directly or indirectly, promote, operate, issue any advertisement soliciting participation or enrolment in or accept deposits in pursuance of an Unregulated Deposit Scheme.

4. Fraudulent default in Regulated Deposit Schemes. – No deposit taker, while accepting deposits pursuant to a Regulated Deposit Scheme, shall commit any fraudulent default in the repayment or return of deposit on maturity or in rendering any specified service promised against such deposit.

5. Wrongful inducement in relation to Unregulated Deposit Schemes. – No person by whatever name called shall knowingly make any statement, promise or forecast which is false, deceptive or misleading in material facts or deliberately conceal any material facts, to induce another person to invest in, or become a member or participant of any Unregulated Deposit Scheme.

6. Certain scheme to be Unregulated Deposit Scheme. – A prize chit or a money circulation scheme banned under the provisions of the Prize Chits and Money Circulation Scheme (Banning) Act, 1978 shall be deemed to be an Unregulated Deposit Scheme under this Act.


Banning of Unregulated Deposit Schemes Act, 2019

Shell bank

Shell bank means a bank that has no physical presence in the country in which it is incorporated and licensed, and which is unaffiliated with a regulated financial group that is subject to effective consolidated supervision.

Physical presence means meaningful mind and management located within a country. The existence simply of a local agent or low level staff does not constitute physical presence.


[Ref: FATF (2012-2019), International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, FATF, Paris, France]

Funds

Funds

The term funds refers to assets of every kind, whether corporeal or incorporeal, tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such assets.

Funds or other assets

The term funds or other assets means any assets, including, but not limited to, financial assets, economic resources (including oil and other natural resources), property of every kind, whether tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such funds or other assets, including, but not limited to, bank credits, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts, or letters of credit, and any interest, dividends or other income on or value accruing from or generated by such funds or other assets, and any other assets which potentially may be used to obtain funds, goods or services.


[Ref: FATF (2012-2019), International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, FATF, Paris, France]

Bank Fixed Deposit Interest Rates in India

The rates are applicable for deposits of below Rs. 1 crore.

As per 1st March 2019

Bank of India 

Investment Period FD rates for Regular deposits FD rates for Senior Citizen
7 days to 14 days 5.25% 5.25%
15 days to 30 days 5.25% 5.25%
31 days to 45 days 5.25% 5.25%
46 days to 90 days 5.75% 5.75%
91 days to 120 days 6.00% 6.50%
121 days to 179 days 6.00% 6.50%
180 days to 364 days 6.25% 6.75%
1 year to 1 year 364 days 6.65% 7.15%
2 years to 2 years 364 days 6.70% 7.20%
3 years to 7 years 364 days 6.50% 7.00%
8 years to 10 years 6.35% 6.85%

HSBC Bank 

Tenure FD Rates Senior Citizen FD Rates
7 days to 14 days 3.00% 3.50%
15 days to 29 days 3.10% 3.50%
30 days to 59 days 3.25% 3.75%
60 days to 89 days 4.25% 4.75%
90 days to 93 days 5.00% 5.50%
94 days 6.00% 6.50%
95 days to 269 days 5.00% 5.50%
270 days to 364 days 5.00% 5.50%
365 days 5.00% 5.50%
366 days to 399 days 5.00% 5.50%
400 days 6.00% 6.50%
401 days to 17 months 29 days 5.00% 5.50%
731 days to 35 months 29 days 5.00% 5.50%
18 months to 730 days 6.25% 6.75%
36 months to 47 months 29 days 5.00% 5.50%

SBI 

Investment period FD rates for regular deposit
FD rates for Senior Citizens
7 days to 45 days 5.25% 5.75%
46 days to 179 days 6.25% 6.75%
180 days to 210 days 6.25% 6.75%
211 days to 364 days 6.25% 6.75%
1 year 6.25% 6.75%
1 year 1 day to 1 year 364 days 6.25% 6.75%
2 years to 10 years 6.00% 6.50%

IDBI Bank 

Tenure FD Rates Senior Citizen FD Rates
15 days to 30 days 4.25% 4.25%
31 days to 45 days 4.50% 4.50%
46 days to 60 days 5.00% 5.00%
61 days to 90 days 5.25% 5.25%
91 days to 6 months 6.00% 6.00%
271 days to 364 days 6.50% 6.50%
6 months 1 day to 270 days 6.50% 6.50%
1 year 6.75% 7.25%
1 year 1 day to 2 years 6.50% 7.00%
2 years 1 day to 4 years 364 days 6.25% 6.75%
5 years to 20 years 6.00% 6.50%

Kotak  Mahindra Bank 

Investment Period FD rates for Regular deposits FD rates for Senior Citizen
7 days to 14 days 3.50% 4.00%
15 days to 30 days 4.00% 4.50%
31 days to 45 days 5.00% 5.50%
46 days to 90 days 5.40% 5.90%
91 days to 120 days 5.60% 6.10%
121 days to 179 days 6.00% 6.50%
180 days 6.60% 7.10%
181 days to 364 days 6.70% 7.20%
365 days to 389 days 6.80% 7.30%
390 days 6.85% 7.35%
391 days to 23 months 6.80% 7.30%
23 months 1 day to 2 years 364 days 6.70% 7.20%
3 years to 4 years 364 days 6.50% 7.00%
5 years to 10 years 6.25% 6.75%

Punjab National Bank (PNB)

Investment Period FD rates for Regular deposits FD rates for Senior Citizen
7 days to 14 days 5.70% 6.20%
15 days to 29 days 5.70% 6.20%
30 days to 45 days 5.70% 6.20%
46 days to 90 days 6.35% 6.85%
91 days to 179 days 6.35% 6.85%
180 days to 270 days 6.35% 6.85%
271 days to 364 days 6.35% 6.85%
1 year 6.75% 7.25%
1 year 1 day to 2 years 6.75% 7.25%
3 years 1 day to 10 years 6.25% 6.75%

HSBC Bank 

Tenure FD Rates Senior Citizen FD Rates
7 days to 14 days 3.00% 3.50%
15 days to 29 days 3.10% 3.50%
30 days to 59 days 3.25% 3.75%
60 days to 89 days 4.25% 4.75%
90 days to 93 days 5.00% 5.50%
94 days 6.00% 6.50%
95 days to 269 days 5.00% 5.50%
270 days to 364 days 5.00% 5.50%
365 days 5.00% 5.50%
366 days to 399 days 5.00% 5.50%
400 days 6.00% 6.50%
401 days to 17 months 29 days 5.00% 5.50%
731 days to 35 months 29 days 5.00% 5.50%
18 months to 730 days 6.25% 6.75%
36 months to 47 months 29 days 5.00% 5.50%

Axis Bank 

Investment period FD rates for regular deposit FD rates for Senior Citizens
7 days to 29 days 3.50% 3.50%
30 days to 45 days 5.50% 5.50%
46 days to 89 days 6.25% 6.25%
90 days to 119 days 6.25% 6.25%
4 months to 179 days 6.25% 6.25%
6 months to 8 months 29 days 6.75% 7.00%
9 months to 364 days 7.10% 7.35%
13 months to 13 months 29 days 7.35% 8.00%
14 months to 16 months 29 days 7.30% 7.95%
17 months to 17 months 29 days 7.60% 8.25%

Allahabad Bank 

Tenure FD Rates Senior Citizen FD Rates
7 days to 14 days 5.00%
15 days to 29 days 5.00%
30 days to 45 days 5.25%
46 days to 60 days 5.50%
61 days to 90 days 6.00%
91 days to 179 days 6.25%
180 days to 269 days 6.50%
270 days to 364 days 6.50%
1 year to 1 year 11 months 29 days 6.75%
2 years to 2 years 11 months 29 days 6.60%
3 years to 4 years 11 months 29 days 6.50%
5 years to 10 years 6.50%

Bank of Baroda  

Tenure FD Rates Senior Citizen FD Rates
7 days to 14 days 4.50% 5.00%
15 days to 45 days 4.75% 5.25%
46 days to 90 days 5.00% 5.50%
91 days to 180 days 5.75% 6.25%
181 days to 270 days 6.50% 7.00%
271 days to 364 days 6.50% 7.00%
1 year 6.70% 7.30%
1 year 1 day to 400 days 6.85% 7.35%
2 years 1 day to 3 years 6.70% 7.20%
3 years 1 day to 10 years 6.70% 7.20%

ICICI Bank

Investment period FD rates for regular deposit FD rates for Senior Citizens
7 days to 14 days 4.00% 4.50%
15 days to 29 days 4.25% 4.75%
30 days to 45 days 5.50% 6.00%
46 days to 60 days 5.75% 6.25%
61 days to 184 days 6.00% 6.50%
185 days to 289 days 6.25% 6.75%
290 days to 364 days 6.50% 7.00%
1 year to 2 years 6.75% 7.25%
2 years 1 day to 5 years 6.50% 7.00%
5 years 1 day to 10 years 6.50% 7.00%

Federation of Bank of India Staff Unions & ANR. Vs. Union of India & ANR- 1/3/2019

SUPREME COURT OF INDIA JUDGMENTS

There cannot, therefore, be a uniform qualification or/and disqualification for such persons. Indeed, the qualifications and disqualifications are bound to vary from category to category and would depend on the post, experience and the stream from where a person is being nominated as a Director. Moreover, the qualification and disqualification has to be seen prior to his/her becoming a Director and not after his/her appointment as a Director.

SUPREME COURT OF INDIA

Division Bench

Federation of Bank of India Staff Unions & ANR. Vs. Union of India & ANR.

[Civil Appeal No.5570 of 2014]

BENCH: ABHAY MANOHAR SAPRE & INDU MALHOTRA

DATE: March 01, 2019

ACTS: The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, Section 2(s) of the Industrial Disputes Act, 1947 

Abhay Manohar Sapre, J.

1. This appeal is directed against the final judgment and order dated 08.04.2011 passed by the High Court of Bombay at Goa in Writ Petition (c) No.618 of 2010 whereby the High Court dismissed the writ petition filed by the appellants herein.

2. The appeal involves a short point as would be clear from the facts stated infra.

3. The appellants herein are the writ petitioners and the respondents herein are the respondents in the writ petition filed in the High Court of Bombay at Goa, out of which this appeal arises.

4. Appellant No.1 is an Association of various Staff Unions of the employees working in the Bank of India respondent No.2 herein. Appellant No.1 is a registered Association under the Trade Unions Act, 1926. Appellant No.2 is an employee of Respondent No.2 Bank and at the relevant time was working as Deputy General Secretary of appellant No.1Association.

5. The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980 (hereinafter referred to as “the Act”) deals with Banking Companies and their internal affairs. Section 9 of the Act empowers the Central Government to make scheme after consultation with 2 the Reserve Bank of India for carrying out the provisions of the Act.

6. Section 9 (3) of the Act provides for composition of Board of Directors and also provides as to who can be nominated as Directors in the Board of Directors. Clauses (a) to (i) of subsection (3) of Section 9 of the Act sets out various categories from which one Director from each of such categories is nominated in the Board of Directors. Clause(e) deals with a category of workman/employee Director whereas clause(f) deals with a category of officer/employee Director for their nomination in the Board of Directors.

7. In exercise of powers conferred under Section 9(1) of the Act, the Central Government has framed a Scheme calledThe Nationalized Banks (Management and Miscellaneous provisions) Scheme, 1970.

8. Chapter II of the Scheme deals with Board of Directors. Clause 3 of the Scheme deals with the 3 constitution of the Board whereas Clause 3(2)(iii) deals with disqualification of a workman/employee for being nominated as a Director.

9. So far as the procedure relating to the nomination of a Director out of the officer/employee category falling in clause(f) of Section 9(3) of the Act is concerned, it is provided in the third schedule to the Scheme.

10. So far as the case at hand is concerned, it relates to the nomination of a Director from the workman/employee category falling in clause (e) of Section 9(3) of the Act and also relates to his disqualification for being nominated as a Director in that category.

11. On 28.05.2009, the Management of the Bank (respondent No.2) called upon the appellants to furnish a panel of three workers/employees for being nominated as a Director in order of preference in the category of “Workman Director” in the Board of Directors.

12. The appellants, in compliance with the request made by respondent No.2, sent a panel of three names of the workers/employees in order of preference to the Central Government by their letter dated 08.06.2009. These names were Mr. Dinesh Jha “Lallan”, Mr. Ram Gopal Sharma and Mr. Pranab Kumar Roy Chowdhary.

13. The Secretary, Government of India, by letter dated 10.10.2009, however, informed the appellants that since all the three workers/employees, whose names were sent, have less than three years of residual service before their superannuation, therefore it is not possible to nominate any of the workers/employees as Director in the Board of Directors. The appellants were accordingly requested to send a fresh panel of names to enable the Central Government to nominate one, out of the three new names, as Director in the Board of Directors.

14. The appellants instead of sending the fresh three names submitted their representation on 21.10.2009 and requested the Central Government to reconsider the matter afresh and nominate any one out of the three names already sent by them vide their letter dated 08.06.2009. The parties then went on exchanging the letters on this subject, but the Central Government did not accede to the request made by the appellants and insisted on them to send fresh names of the workers/employees.

15. It is with these background facts, the appellants felt aggrieved and filed a writ petition in the High Court of Bombay at Goa. In that writ petition, the appellants (writ petitioners) sought quashing of the communication of respondent No.1 dated 10.10.2009 by which respondent No.1 had rejected the panel of three names sent by them vide their letter dated 08.06.2009. A writ of mandamus was also prayed commending the respondents to 6 consider the nomination penal sent by the appellants vide their letter dated 08.06.2009 and nominate one worker/employee as Director out of the three names sent by them in the Board of Directors.

16. In the alternative, the appellants also sought a declaration that clause 3 (2) (iii) of the Scheme, 1970 be struck down as being ultra vires the Constitution.

17. The respondents opposed the writ petition by filing their counter affidavit. The respondents placed reliance on the provisions of the Act and the Scheme framed thereunder and contended inter alia that the challenge made in the writ petition has no factual or/and legal basis.

18. By the impugned order, the High Court dismissed the writ petition finding no merit therein, which has given rise to filing of this appeal by way of special leave by the unsuccessful writ petitioners Union of workers/employees in this Court.

19. Heard Mr. Sidharth Bhatnagar, leaned counsel for the appellants and Mr.Pranab Kumar Mullick & Ms. Bhakti Pasrija, learned counsel for the respondents.

20. Having heard the learned counsel for the parties at length and on perusal of the record of the case, we find no merit in this appeal.

21. At the outset, we find that so far as the challenge to the impugned communication dated 10.10.2009 and enforcement of the appellants’ letter dated 08.06.2009, i.e. (Relief Nos.(a) and (b) in the writ petition) is concerned, both the reliefs have been rendered infructuous.

22. It is for the reason that the employees/workers whose names were recommended by appellant No.1 in their letter dated 08.06.2009 have retired long back. Not only that, on their retirement, many other persons were nominated as Director out of the category of worker/employee in the Board of 8 Directors of the Bank. This relief, therefore, no longer survives for consideration.

23. Now the only question, which survives for consideration in this appeal, is regarding the legality of Clause 3(2)(iii) of the Scheme, 1970 whether Clause 3(2)(iii) of the Scheme is legal or ultra vires the Constitution. The High Court, in the impugned order, has held that the Clause 3(2)(iii) of the Scheme is legal and valid.

24. The challenge to the Clause 3(2)(iii) of the Scheme is essentially based on one argument. According to the appellants, there does not appear to be any rational or basis in providing two different types of disqualificationsone for workers/employees and the other for the officers/employees while considering their cases for nomination as Director from their respective categories.

25. In other words, the submission is that the disqualification provided in Clause 3(2)(iii)(b) of the Scheme for the worker/employee category is only confined to their category. No such similar disqualification is made applicable to the officer/employee category.

26. This, according to the appellants, has created discrimination between the two categories of the Directors without any reasonable basis and, therefore, Clause 3(2)(iii) of the Scheme and especially clause (b) thereof violates the principle underlined in Article 14 of the Constitution of India.

27. We find no merit in this submission for more than one reason.

28. Section 9(3)(e) and (f) of the Act and Clauses 3(2)(i),(ii) and (iii) of the Scheme are relevant for the disposal of this appeal which read as under:

“Section 9(3)(e) and (f) of the Act 9. Power of Central Government to make scheme

(1) The Central Government may, after consultation with the Reserve Bank, make a scheme for carrying out the provisions of this Act.

(2) ………. 10 (3) Every Board of Directors of a corresponding new bank, constituted under any scheme made under subsection (1), shall include (a) ……… (b) ……… (c) ………. (e) one director, from among such of the employees of the corresponding new bank who are workmen under clause (s) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947), to be nominated by the Central Government in such manner as may be specified in a scheme made under this section; (f) one director, from among the employees of the corresponding new bank who are not workmen under clause (s) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947), to be nominated by the Central Government after consultation with the Reserve Bank; Clause 3(2)(i),(ii) and (iii) of the Scheme 3. Constitution of the Board (1) The Central Government shall by notification in the Official Gazette, constitute the Board of a Nationalised Bank.

(2)

(i) The director referred to in clause (e) of subsection (3) of section 9 of the Act, shall be nominated by the Central Government from out of a panel of three such employees furnished to it by the representative union, within a date to be specified by the Central Government, which date shall not be more than six weeks from the date of communication made by the Central Government, requiring the representative union to furnish the panel of names: Provided that where the Central Government is of the opinion that owing to the delay which is likely to occur in the verification and certification of any union or federation as a representative union it is necessary in the interest of the Nationalised Bank so to do, it may nominate any employee of the Nationalised Bannk, who is a workman, to be a director of that Bank.

(ii)

(a)Where there is no representative union, to represent the workman of a Nationalised Bank, or

(b) where such representative union being in existence omits or fails to furnish any panel of names within the specified date, or

(c) where all the persons specified in the panel furnished by the representative union are disqualified whether under item (iii) of this subclause or under clause 10, the Central Government may, at its discretion appoint such workman of the Nationalised Bank, as it may think fit, to be a director of such bank.

(iii) A workman of a Nationalised Bank shall be disqualified for being nominated as a director unless( a) he is and has been, serving for a continuous period of not less than five years in the Nationalised Bank, and

(b) he is of such age that there is no likelihood of his attaining the age of superannuation during his terms of office as director.”

29. It would be clear from a perusal of clauses (e) and (f) of Section 9(3) of the Act that both the categories of employees are different one is worker/employee category as defined under Section 9(3)(e) and the other is officer/employee category as defined under Section 9(3)(f) of the Act. Second, it is for the legislature to decide as to what qualifications and disqualifications should be prescribed for various categories of the employees for their nomination on the post of Director. Third, there lies a distinction between the worker and the officer.

The former, i.e., worker is defined under Section 2(s) of the Industrial Disputes Act, 1947 and is governed by that Act whereas the latter, i.e., officer is not governed by the Industrial Disputes Act but is governed by separate service rules. Both these categories of employees, therefore, cannot be equated with each other and nor can be placed at par for providing equal qualification or/and disqualification for their nomination as a Director in the Board of Directors. Fourth, Article 14 of the Constitution applies inter se two equals and not inter se unequals.

The case at hand falls under the latter category and, therefore, reliance placed on the principle enshrined under Article 14 of the Constitution by the appellants is wholly misplaced. Fifth, the nominee worker/employee has only a right under the Act to be appointed as Director from the category of worker/employee in terms of Section 9 (3)(e) of the Act provided the concerned nominee whose name is recommended by the Union fulfills the qualifications laid down in Clause 3(2)(iii) of the Scheme but not beyond it.

30. Learned counsel for the appellants then submitted that once the employee is nominated to the Board of Directorsmay be from different categories specified under Section 9, then no distinction should be made between them while prescribing the qualification and disqualification.

31. This submission has also no merit. A mere reading of Section 9(3) clause (a) to (i) would go to show that the Board of Directors consists of persons coming from different fields. There cannot, therefore, be a uniform qualification or/and disqualification for such persons. Indeed, the qualifications and disqualifications are bound to vary from category to category and would depend on the post, experience and the stream from where a person is being nominated as a Director. Moreover, the qualification and disqualification has to be seen prior to his/her becoming a Director and not after his/her appointment as a Director.

32. In view of the foregoing discussion, we find no good ground to interfere with the reasoning and the conclusion arrived at by the High Court, which rightly dismissed the appellants’ writ petition, and upheld Clause 3(2)(iii) of the Scheme as being legal.

33. The appeal is thus found to be devoid of any merit. It fails and is accordingly dismissed.

J. [ABHAY MANOHAR SAPRE]

J. [INDU MALHOTRA]

New Delhi;

March 01, 2019

List of Scheduled Banks in India

SCHEDULED BANKS UNDER RBI ACT

Ajodhia Bank, Fyzabad,
Allahabad Bank.
American Express Banking Corp.
American Express International Banking Corporation.
Andhra Bank, Masulipatam.
Bank of America, National Association.
Bank of Baroda
Bank of China, Calcutta.
Bank of India, Bombay.
Bank of Kerala Ltd.
Bank of Madura Ltd., Madurai.
Bank of Karnataka, Hubli.
Bank of Maharashtra, Poona.
Bank of Rajasthan Ltd., Udaipur
Bank of Tokyo Mitsubishi Ltd.
Bareilly Corporation Bank Ltd., Bareilly.
Belgaum Bank.
Benares State Bank Ltd.
British Bank of the Middle East.
Canara Bank.
Corporation Bank.
Canara Industrial and Banking Syndicate, Udipi.
Catholic Syrian Bank Ltd., Trichur.
Central Bank of India.
Standard Chartered Bank.
Comptoir National D’ Escompte de Paris.
Commercial Bank of Korea Ltd.
Dena Bank, Bombay.
[Dresdner Bank AG.]
Eastern Bank.
Citi Bank, N.A. of New York.
Federal Bank Ltd., Alwaye.
General Bank of Netherlands.
Gadodia Bank, Bombay.
Habib Bank.
Hanil Bank.
Hindustan Commercial Bank, Cawnpore.
Hindustan Mercantile Bank, Calcutta.
Hongkong and Shanghai Banking Corporation.
Indian Bank, Madras.
Indian Overseas Bank, Madras.
Industrial Development Bank of India.
ICICI Bank Limited.
J.& K. Bank Ltd., Srinagar.
Kamani Industrial Bank.
Karnataka Bank Ltd., Mangalore.
Karur Vysya Bank.
Krishnaram Baldeo Bank (Private) Ltd., Gwalior.
Kumbakonam City Union Bank Ltd.
Lakshmi Vilas Bank Ltd., Karur.
Mercantile Bank.
[Indian Mercantile Cooperative Bank Ltd., Cantonment Road, Lucknow-226001, Uttar Pradesh.]
Mitsui Bank Ltd.
Nadar Bank, Tuticorin.
Grindlays Bank P.L.C.
National Bank of Pakistan.
Nedungadi Bank Ltd., Calicut.
New Bank of India, Ltd.
Oriental Bank of Commerce.
Pandyan Bank.
[Pravara Sahakari Bank Ltd., Loni Distt., Ahmednagar-413736, Maharashtra.]
Punjab and Sind Bank, Amritsar.
Punjab Co-operative Bank Ltd., Amritsar.
Punjab National Bank.
Purbanchal Bank Ltd., Gauhati.
Ratnakar Bank Ltd., Kolhapur.
Sangli Bank Ltd.
[Sonali Bank Ltd.]
Bank of Tamil Nadu Ltd.
South Indian Bank Ltd., Trichur.
State Bank of Hyderabad.
State Bank of India.
State Bank of Jaipur.
State Bank of Indore.
State Bank of Mysore.
State Bank of Patiala.
State Bank of Travancore.
Syndicate Bank.
Tanjore Permanent Bank Ltd., Tanjore.
Tamil Nadu State Co-operative Bank Ltd., Madras.
Tamilnad Mercantile Bank Ltd.
Traders’ Bank Ltd.
Travancore Bank Ltd., Trivandrum Taluk.
Union Bank of India, Bombay.
United Bank of India.
UCO Bank Ltd.
United Commercial Bank Ltd., Calcutta.
United Industrial Bank Ltd., Calcutta.
United Western Bank Ltd., Bangalore City.
Yes Bank Ltd.
Vijaya Bank Ltd., Mangalore.
ING Vysya Bank Limited], Bangalore City.
West Bengal State Co-operative Bank Ltd., Calcutta.
1975
Prathama Bank, Moradabad (Uttar Pradesh).
Gorakhpur Kshetriya Gramin Bank, Gorakhpur.
Jaipur-Nagaur Anchalik Gramin Bank, Jaipur.
Gaur Gramin Bank, Malda.
Haryana Kshetriya Gramin Bank, Bhiwani.
Bhojpur-Rohtas Gramin Bank, Arrah.
1976
Samyut Kshetriya Gramin Bank, Azamgarh.
Kshetriya Gramin Bank, Hoshangabad.
Tungabhadra Gramin Bank, Bellary.
Puri Gramya Bank, Pipli.
Jammu Rural Bank, Jammu.
Champaran Kshetriya Gramin Bank, Motihari.
Barabanki Gramin Bank, Barabanki.
Gurgaon Gramin Bank, Gurgaon.
Rai Bareli Kshetriya Gramin Bank, Rai Bareli.
Farrukabad Gramin Bank, Farrukabad.
Mel’abhum Gramin Bank, Bankura.
Bolangir Anchalik Gramya Bank, Bolangir.
Nagarjuna Grameena Bank, Khammam.
Pragjyotish Gaonilia Bank, Nalbari.
Rayalseema Grameena Bank, Cuddapah.
Mayurakshi Gramin Bank, Suri.
Malaprabha Grameena Bank, Dharwar.
Marathwada Gramin Bank, Nanded.
Marwar Gramin Bank, Pali.
Bhagirath Gramina Bank, Sitapur.
Visakha Grameena Bank, Srikakulam.
Cauvery Grameena Bank, Mysore.
Shekhawati Gramin Bank, Sikar.
Cuttack Gramya Bank, Cuttack.
Bilaspur-Raipur Kshetriya Gramin Bank, Bilaspur.
Magadh Gramina Bank, Gaya.
Koraput-Panchabati Gramya Bank, Jeypore.
South Malabar Gramin Bank, Malappuram.
South Malabar Gramin Bank, Cannanore.
Rewa-Sidhi Gramin Bank, Rewa.
Tripura Gramin Bank, Agartala.
Kosi Kshetriya Gramin Bank, Purnea.
Himachal Gramina Bank, Mandi.
Ballia Kshetriya Gramin Bank, Ballia.
1977
Hardoi-Unnao Gramin Bank, Hardoi.
1978
Krishna Grameena Bank, Gulbarga,
Kutch Gramin Bank, Bhuj.
Jamnagar Gramin Bank, Jamnagar.
1979
Marudhar Kshetriya Gramin Bank, Churu.
Nalanda Gramin Bank, Bihar Shariff.
Singhbhum Kshetriya Gramin Bank, Chaibasa.
Madhubani Kshetriya Gramin Bank, Madhubani.
Sharada Gramin Bank, Santa.
Ellaquai Dehati Bank, Shrinagar.
Surguja Kshetriya Gramin Bank, Ambikapur (M.P.)
Shri Anantha Grameena Bank, Anantpur.
Bastar Kshetriya Gramin Bank, Jagadalpur.
1980
Kanpur Kshetriya Gramin Bank, Kanpur.
Sravasthi Gramin Bank, Bahraich.
Drug-Rajnandgaon Gramin Bank, Rajnandgaon.
Mithila Kshetriya Gramin Bank, Darbhanga.
Etawah Kshetriya Gramin Bank, Etawah (U.P.)
Samastipur Kshetriya Gramin Bank, Samastipur.
Palamau Kshetriya Gramin Bank, Daltonganj.
Kisan Gramin Bank, Budaun (U.P.).
Kshetriya Kisan Gramin Bank, Mainpuri (U.P.).
Kalbandi Anchalik Gramya Bank, Bhawanipatur (Ori.).
Jhabua-Dhar Kshetriya Gramin Bank, Jhabhua (M.P.).
Ranchi Kshetriya Gramin Bank, Ranchi (Bihar).
Baitarani Gramya Bank, Baripada (Ori.).
Kashi Gramin Bank, Varanasi (U.P.)
Lakhimi Gaonila Bank, Golaghat (Assam).
Basti Grarnin Bank, Basti (U.P.).
Balasore Gramya Bank, Balasore (Ori.).
Allahabad Kshetriya Gramin Bank, Allahabad (U.P.).
Pratapgarh Kshetriya Gramin Bank, Pratapgarh (U.P.).
Nadia Gramin Bank, Krishnagar (U.P.).
Faizabad Kshetriya Grainin Bank, Faizabad (U.P.).
Fatehpur Kshetriya Gramin Bank, Fatehpur (U.P.).
Sagar Gramin Bank, Amtala (W.B.).
Bareilly Kshetriya Gramin Bank, Bareilly (U.P.).
BardhamanGramin Bank, Burdwan (W.B.).
1981
Devipatan Kshetriya Gramin Bank, Gonda (U.P.).
Raigarh Kshetriya Gramin Bank, Raigarh (M.P.).
Rushikulya Gramya Bank, Berhampur (Ori.).
Alwar-Bharatpur Anchalik Gramin Bank, Bharatpur (Raj.).
Shri Venkateshwara Grameena Bank, Chitoor (A.P.).
Aligarh Gramin Bank, Aligarh (U.P.).
Tulsi Gramin Bank, Banda (U.P.).
Gopalganj Kshetriya Gramin Bank, Gopalgunj (Bihar).
Shivapuri-Guna Kshetriya Gramin Bank, Shivpuri (M.P.).
Saran Kshetriya Gramin Bank, Chapara (Bihar).
Etah Gramin Bank, Eta (U.P.).
Gomti Gramin Bank, Jaunpur (U.P.).
Damoh-Panna-Sagar Kshetriya Gramin Bank, Damoh (M.P.).
Cachar Gramin Bank, Silchar (Assam).
Siwan Kshetriya Gramin Bank, Siwan (Bihar).
Manipur Rural Bank, lmphal (Manipur).
Kamraz Rural Bank, Sopore (J.&K.).
Chitradurga Gramin Bank, Chitradurga (Karnataka).
Dhenkanal Grantya Bank, Dhenkanal (Ori.).
Avaroli Kshetriya Gramin Bank, Sawaimadopur (Raj.).
Banaskantha-Mehsana Gramin Bank, Patan (Guj.).
Ka Bank Nongkyndong Ri Khasi Jaintia (Meghalaya).
1982
Karbi N.C. Rural Bank, Diphu (Assam).
Sri Saraswati Grameena Bank, Adilabad (A.P.).
Subansiri Gaonila Bank, North Lakhmipur (Assam).
Panchamahal Gramin Bank, Godhara (Gujarat).
Chattrasal Gramin Bank, Orai (U.P.).
Dewas-Shajapur Kshetriya Gramin Bank, Dewas (M.P.).
Sangameshwara Grameena Bank, Mahboobnagar (A.P.).
Kalpatharn Grameena Bank, Tumkur (Karnataka).
Rani Laxmi Bai Kshetriya Gramin Bank, Jhansi (U.P.).
Manjira Grameena Bank, Sangareddy (A.P.).
Pinnakini Grameena Bank, Nellore (A.P.).
Howrah Gramin Bank, Howrah (W.B.).
Nimar Kshetriya Gramin Bank, Khargone (M.P.).
Kakathiya Grameena Bank, Warangal (A.P.).
Hadoli Kshetriya Gramin Bank, Kotah (Raj.).
Mandla-Balaghat Kshetriya Gramin Bank, Mandla (M.P.).
Aurangabad-Jalna Gramin Bank, Aurangabad (Maharashtra).
1983
Bidur Gramin Bank, Bijnor (U.P.).
Chhindwara-Seoni Kshetriya Gramin Bank, Chhindwara (M.P.).
Mewar Anchalik Gramin Bank, Udaipur (Raj.).
Thar Anchalik Gramin Bank, Jodhpur (Raj.).
Chandrapur-Gadchiroli Gramin Bank, Chandrapur (Mah.).
Kolar Gramin Bank, Kolar (Karnataka).
Rajgarh Kshetriya Gramin Bank, Biaora (Rajgarh) (M.P.).
Shahajanpur Kshetriya Gramin Bank, Shahajanpur (U.P.).
Chaitanya Grameena Bank, Tenali, (Guntur) Distt. (A.P.).
Nainital-Almora Kshetriya Gramin Bank, Nainital (U.P.).
Shri Sathavahana Grameena Bank, Karimnagar (A.P.).
Kapurthala-Firozpur Kshetriya Gramin Bank, Kapurthala (Punj.).
Vindhyavasini Gramin Bank, Mirzapur (U.P.).
Nagaland Rural Bank, Kohima (Nagaland).
Gurdaspur-Amritsar Kshetriya Gramin Vikas Bank, Gurdaspur (Punj.).
Bijapur Gramin Bank, Bijapur (Karnataka).
Shahdol Kshetriya Gramin Bank, Shahdol (M.P.).
Sarayu Gramin Bank, Lakhmipur (U.P.).
Mizoram Rural Bank, Aigwal (Mizoram).
Akola Gramin Bank, Akola (Mah.).
Ratlam-Mandsaur Kshetriya Gramin Bank, Mandsaur (M.P.).
Ratnagiri-Sindudurg Gramin Bank, Ratnagiri (Mah.).
Arunachal Pradesh Rural Bank, Pasighat (Arunachal Pradesh).
Jamuna Gramin Bank, Agra (U.P.).
Surendranagar-Bhavnagar Gramin Bank, Bhavnagar (Guj.).
1984
Solapur Gramin Bank, Solapur (Mah.).
Bhandara Gramin Bank, Bhandara (Mah.).
Chambal Kshetriya Gramin Bank, Morena (M.P.).
Valsad-Dangs Gramin Bank, Bulsar (Guj.).
Surat-Bharuch Gramin Bank, Broach (Guj.).
Bundi-Chittogarh Kshetriya Gramin Bank, Bundi (Raj.).
Bhilwara-Ajmer Kshetriya Gramin Bank, Bhilwara (Raj.).
Dungarpur-Banswara Kshetriya Gramin Bank, Dungarpur (Raj.).
Sriganganagar Kshetriya Gramin Bank, Sriganganagar (Raj.).
Giridih Kshetriya Gramin Bank, Giridih (Bihar).
Muzaffarnagar Kshetriya Gramin Bank, Muzaffarnagar (U.P.).
Saba rkantha-GandhinagarGramin Bank, Himatnagar (Guj.).
Sahyadri Gramin Bank, Shimoga (Karnataka).
Mahakaushal Kshetriya Gramin Bank, Narsinghpur (M.P.).
Chikmagolur-Kodagu Grameena Bank, Chikmagalur (Karnataka).
Murshidabad Gramin Bank, Berhampore (W.B.).
Indore-Ujjain Kshetriya Gramin Bank, Ujjain (M.P.).
Hazaribagh Kshetriya Gramin Bank, Hazaribagh (Bihar).
Patiliputra Gramin Bank, Patna (Bihar),
1985
Ambala Kshetriya Gramin Bank, Ambala city (Haryana).
Yavatmal Gramin Bank, Yavatmal (Mah.).
Golkonda Gramin Bank, Hyderabad (A.P.).
Srirama Gramin Bank, Nizamabad (A.P.).
Bhagalpur-Banka Kshetriya Gramin Bank, Bhagalpur (Bihar).
Bikaner Kshetriya Gramin Bank, Bikaner (Raj.).
Pithoragarh Kshetriya Gramin Bank, Pithoragarh (U.P.).
Vishveshwaraya Grameena Bank, Mandya (Karnataka).
Ganga-Yamuna Gramin Bank, Dehradun (U.P.).
Alkanand Gramin Bank, Rauri (U.P.).
Gwalior Datia Kshetriya Gramin Bank, Datia (M.P.).
Buldhana Gramin Bank, Buldhana (Mah.).
Parvatiya Gramin Bank, Chambal (H.P.).
Adhiyaman Gramin Bank, Dharampuri (T.N.).
Oman International Bank.
Socicto Generale, Paris (France).
1986
Malwa Gramin Bank, Sangrur (Punj.).
Thane Gramin Bank, Thane (Mah.).
Vidisha-Bhopal Kshetriya Gramin Bank, Vidisha (M.P.).
Faridkot Bhatinda Kshetriya Gramin Bank, Bhatinda (Punj.).
Vallalor Gramin Bank, Cuddalore (T.N.).
Bank of Bahrain and Kuwait B.S.C.
1987
Godawari Grameena Bank, Rajahmundry (A.P.).
Habib Bank Ltd., Bombay and National Bank of Pakistan, Calcutta.
1988
For “Deutsche Bank (Asia) A.G.
read “Deutsch Bank A.G.
1992
For “The Mitsui Taiyo Kebe Bank Ltd.” read “The Sakma Bank Limited.”
1993
The Ganesh Bank of Kurundwad Ltd.
1994
[AXIS Bank Limited.]
Indus Bank Limited.
International Nederlanden Bank N.V.
Goa State Co-operative Bank Ltd.
Global Trust Bank Limited.
1995
Pondicherry State Co-operative Bank Ltd.
Dresdner Bank A.G.
HDFC Bank Ltd.
[Centurion Bank of Punjab Limited.]
Bank of Punjab Limited.
The Development Bank of Singapore Limited.
Development Credit Bank Limited.
Times Bank Limited.
Development Co-operative Bank Ltd., Bombay.
1996
The Siam Commercial Bank Public Company Limited.
Commerce Bank, A.G.
For “Bank of Tokyo Limited” read’ “The Bank of Tokyo Mitsubishi UFJ Ltd.]”
Chinatrust Commercial Bank.
The Fuji Bank Limited.
For “The Chase Manhattan Bank NA” read “The Chase Manhattan Bank.”
1997
Oversea-Chinese Banking Corporation Limited.
For “ANZ Grind lays Bank Ltd.” read “ANZ Grindlays Bank Limited.
1998
Mapusa Urban Co-operative Bank Ltd., Mapusa, Goa.
Ahmednagar Sahaka ri Bank Ltd., Mumbai.
Parsik Janata Sahakari Bank Ltd., Thane.
Janakalyan Sahakari Bank Ltd., Chembur, Mumbai.
The Kapol Co-operative Bank Ltd., Mumbai.
1999
Nagpur Nagrik Sahakari Bank Ltd., Nagpur, Maharashtra.
Shikshak Sahakari Bank Ltd., Nagpur, Maharashtra.
The Akola Janta Commercial Co-operative Bank Ltd., Akola, Maharashtra.
The Akoja Urban Co-operative Bank Ltd., Akola, Maharashtra.
The Khamgaon Urban Co-operative Bank Ltd., Khamgaon, Maharashtra.
The Vasavi Co-operative Urban Bank Ltd., Hyderabad, Andhra Pradesh.
2000
The Kalyan Janata Sahakari Bank Ltd., Kalyan, Maharashtra.
Janalaxmi Co-operative Bank Ltd., Nashik, Maharashtra.
Punjab & Maharashtra Co-operative Bank Ltd., Mumbai, Maharashtra.
Nagar Urban Co-operative Bank Ltd., Ahmednagar, Maharashtra.
[Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd., Ichalkaranji.]
Jalgaon Janata Sahakari Bank Ltd., Jalgaon, Maharashtra.
The Karad Urban Co-operative Bank Ltd., Karad, Maharashtra.
Mandvi Co-operative Bank Ltd., Mumbai, Maharashtra.
The Mehsana Urban Co-operative Bank Ltd., Mehsana, Gujarat.
Nutan Nagarik Sahakari Bank Ltd., Ahmedabad, Gujarat.
Sardar Bhiladwalla Pardi People’s Co-operative Bank Ltd., Killa Pardi, Distt. Valsad, Gujarat.
Co-operative Bank of Ahmedabad Ltd., Ahmedabad, Gujarat.
The Visnagar Nagarik Sahakari Bank Ltd., Visnagar, Distt. Mehsana, Gujarat.
Amanath Co-operative Bank Limited, Bangalore, Karnataka.
2002
SolapurJanata, Sahakari Bank Ltd., Solapur-413007, Maharashtra.
Bharati Sahakari Bank Ltd., Pune-411030, Maharashtra.
2003
Thane Bharat Sahakari Bank Ltd., Thane 400602, Maharashtra.
Zoroastrian Co-operative Bank Ltd., Mumbai, 400023, Maharashtra.
[NKGSB Co-operative Bank Ltd., Mumbai.]
2004
[IDBI Bank Limited.]
2005
ING Bank N.V.
2006
UFJ Bank Limited.
The Co-operative Bank of Ahmedabad Ltd., Ahmedabad.
2007
Lord Krishna Bank Limited.
2008
JSC VTC Bank

Government of India issued RBI directions u/s 7 of the RBI Act for the first time

The Reserve bank of India is neither autonomous nor independent and directors are simple government servant by their appointment.

The government has invoked never-before-used powers under the RBI Act allowing it to issue directions to the central bank governor on matters of public interest. Section 7 of the RBI Act empowers the government to consult and give instructions to the governor to act on certain issues that the government considers serious and in public interest. This Section had never been used in independent India till now. The government and RBI have been at loggerheads over a few issues for some time now. While the government believed that easing of lending rules for the 11banks under the prompt corrective action (PCA) framework could help reduce pressure on micro, small and medium enterprises (MSMEs), the regulator stood its ground arguing that such a move would put the clock back and undo clean-up efforts. Continue Reading

RBI guidelines for Prepaid Payment Instruments for Interoperability u/s 18 & 10(2) of the Payment and Settlement Systems Act, 2007

Prepaid Payment Instruments (PPIs) – Guidelines for Interoperability
RBI/2018-19/61
DPSS.CO.PD.No.808/02.14.006/2018-19

October 16, 2018

All Prepaid Payment Instrument Issuers, System Providers and System Participants

Madam / Dear Sir,

Prepaid Payment Instruments (PPIs) – Guidelines for Interoperability

A reference is invited to the Master Direction DPSS.CO.PD.No.1164/02.14.006/2017-18 dated October 11, 2017 (updated as on December 29, 2017) on Issuance and Operation of PPIs (M.D.). As per the road-map laid down therein, interoperability of all KYC-compliant PPIs was to be enabled in three phases – (i) interoperability of PPIs issued in the form of wallets through Unified Payments Interface (UPI), (ii) interoperability between wallets and bank accounts through UPI, and (iii) interoperability for PPIs issued in the form of cards through card networks.

2. In order to prepare better for implementation of interoperability, consolidated guidelines for enabling all phases are enclosed. Participating PPI issuers, who choose to adopt interoperability shall ensure adherence to the enclosed guidelines, in addition to the instructions on KYC, security for transactions and application life cycle, cyber security, fraud prevention and risk management as in the M.D.

3. Banks shall also be guided by the RBI circulars DBS.CO/CSITE/BC.11/33.01.001/2015-16 dated June 2, 2016 on ‘Cyber Security Framework in Banks’ and DBS.CO.ITC.BC.No.6/31.02.008/2010-11 dated April 29, 2011 on ‘Working Group on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds – Implementation of Recommendations’, as applicable.

4. Furthermore, all participating PPI issuers shall be guided by the technical specifications / standards / requirements for achieving interoperability through UPI and card networks as per the requirements of National Payments Corporation of India (NPCI) and the respective card networks. NPCI and card networks shall facilitate participation by PPI issuers in UPI and card networks.

5. These guidelines are issued under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007.

Yours faithfully,

(P. Vasudevan)
Chief General Manager

Encl.: As above


Prepaid Payment Instruments (PPIs) – Operational Guidelines for Interoperability
(DPSS.CO.PD.No.808/02.14.006/2018-19 dated October 16, 2018)

1. Introduction

1.1 Interoperability is the technical compatibility that enables a payment system to be used in conjunction with other payment systems. Interoperability allows PPI Issuers, System Providers and System Participants in different systems to undertake, clear and settle payment transactions across systems without participating in multiple systems.

2. Requirements

2.1 The requirements mentioned herein, with respect to interoperability, are in addition to the provisions of Master Direction on PPIs.

2.2 PPI issuers shall have a Board approved policy for achieving PPI interoperability.

3. Requirements for achieving interoperability: Common to Wallets and Cards

3.1 Where PPIs are issued in the form of wallets, interoperability across PPIs shall be enabled through UPI.

3.2 Where PPIs are issued in the form of cards, the cards shall be affiliated to the authorised card networks.

3.3 All PPI issuers intending to implement interoperability through UPI and / or card networks shall adhere to the instructions contained in these guidelines. PPI issuers operating exclusively in specific segments like Meal, Gift and MTS may also implement interoperability.

3.4 The interoperability shall be facilitated to all KYC compliant PPI accounts and entire acceptance infrastructure.

3.5 Technical requirements: PPI issuers shall adhere to all the requirements of card networks / UPI including membership type and criteria, merchant on-boarding, adherence to various standards, rules and regulations applicable to the specific payment system such as technical requirements, certifications and audit requirements, governance, etc.

3.6 Reconciliation, customer protection and grievance redressal:

  1. PPI issuers shall ensure adherence to all guidelines / requirements of card networks / UPI in terms of reconciliation of positions at daily / weekly / monthly or more frequent basis, as the case may be.
  2. PPI issuers shall adhere to all dispute resolution and customer grievance redressal mechanisms as prescribed by the card networks / UPI.

4. Requirements for achieving interoperability through card networks

4.1 Card networks are allowed to onboard PPI issuers to join their network. Non-bank PPI issuers are permitted to participate as members / associate members of authorised card networks.

4.2 Settlement: For the purpose of settlement, a non-bank PPI issuer can participate directly or through a sponsor bank arrangement as the case may be. Non-bank PPI issuers shall adhere to the requirements of respective card network’s settlement system.

4.3 Safety and security:

  1. As non-bank PPI issuers will issue interoperable cards in association with card networks for the first time, the cards issued by these entities shall ab initio be EMV Chip and PIN compliant.
  2. Banks shall ensure that all new PPIs issued in the form of cards are EMV Chip and PIN compliant.
  3. Banks shall ensure that all reissuance / renewal of PPIs in the form of cards are EMV Chip and PIN compliant.
  4. PPI issuers operating exclusively in Meal segment shall issue EMV Chip and PIN compliant cards, if they opt for interoperability. Gift cards and MTS, may however, be issued with or without EMV Chip and PIN enablement.

5. Requirements for achieving interoperability through UPI

5.1 PPI issuers shall facilitate all basic / standard features of interoperability of UPI.

5.2 PPI issuers shall act as Payment System Providers (PSP) in the UPI. NPCI will issue handle to the PPI issuers as per its policy / guidelines taking risk management aspects into consideration. Since *99# USSD is part of UPI, non-bank PPI issuers are also allowed to participate in the same.

5.3 PPI holders shall be on-boarded for UPI by their own PPI issuer only. PPI issuers shall only link their customer wallets to the handle issued to them. PPI issuers as PSP shall not on-board customers of any bank or any other PPI issuer.

5.4 Authentication will be completed by the PPI holder as per his / her existing wallet credentials. In other words, a transaction will be pre-approved before it reaches the UPI.

5.5 Settlement: For the purposes of settlement, a non-bank PPI issuer shall participate through a sponsor bank. Non-bank PPI issuers shall adhere to the requirements of sponsor bank arrangement in UPI as also meet all requirements of NPCI in this regard.

An inter-ministerial panel recommended Bank of Baroda, Vijaya Bank and Dena Bank for amalgamation.

Sep 18, 2018: Three state-run banks – Dena Bank, Vijaya Bank and Bank of Baroda – will be merged to create the third-largest bank in the country, the government said on Monday, as part of efforts to clean up the country’s banking system. The finance minister said he expected the process to be completed in the current financial year, which ends on March 31, 2019.

The decision to merge the three banks came at a meeting held under the “alternative mechanism” framework that was drawn up last year to consider consolidation in banking. Besides Jaitley, the alternative mechanism includes defence minister Nirmala Sitharaman and railway minister Piyush Goyal.

The government will continue to provide capital support to the merged entity. The announcement, made by Financial Services Secretary Rajiv Kumar during a press conference with Finance Minister Arun Jaitley, comes as the country’s banking sector grapples with Rs. 8.99 lakh crore worth non-performing assets or NPAs.

The merged entity has a combined business of Rs 14.8 lakh crore, deposits of Rs 8.4 lakh crore, gross advances of Rs 6.4 lakh crore, and 85,675 employees, based on the position as on June 30. The boards of these three banks are expected to meet in the next two weeks to consider the proposal and work out modalities.

Jaitley said the successful experience of merging State Bank of India (SBI) with five of its subsidiary banks and Bharatiya Mahila Bank prompted the government to explore the latest proposal in consultations with the Reserve Bank of India (RBI). Explaining the context of the proposed amalgamation, Jaitley said many state-run banks were in a fragile condition due to excessive, “adventurous” lending in the past (2008-14) and consequent ballooning of stressed assets with them.

The NDA government, through an unprecedented Rs 2.11-lakh-crore infusion over two years through FY19 that was announced last year, sought to capitalise PSBs to meet regulatory capital requirements and also support lending. “This amalgamated entity will increase banking operations,” Jaitley added.

The merger will not cause any job loss in any of these banks and, as was in case of SBI, no employee of the three banks would have service conditions that are adverse to their present one, he added.

The government currently owns majority stakes in 21 lenders, which account for over two-thirds of the country’s banking assets. But they also account for an overwhelmingly large share in total non-performing assets (NPAs) in banking.

The merger announcement came even as PSBs recovered Rs 36,551 crore in the June quarter from bad loans, almost half of the entire 2017-18. Their operating profits rose 11.5% quarter-on-quarter and losses dropped 73.5%, in a sign that the worst is behind, said Kumar. The 11 of 21 PSBs that are under the prompt corrective action could be out of it this fiscal, he had said recently.

The RBI in its latest financial stability report said the increase in bad loans is estimated to be the highest for PSBs. In the base case, the banking regulator expects the gross NPA ratio for state-owned banks to rise to 16.3% by March 2019 from 15.6% in March 2018. In the worst-case scenario, the bad loan ratio could go up to 17.3%.