Showing posts with label Banking Awareness. Show all posts
Showing posts with label Banking Awareness. Show all posts

April 15, 2020

National Financial Reporting Authority ( NFRA )

The National Financial Reporting Authority (NFRA) is a body constituted under the provisions of Section 132 of the Companies Act, 2013. The constitution of this authority is effective from 1st October 2018.
Powers of the NFRA -
To investigate the matters of professional or other misconduct committed by a prescribed class of Companies act firms or Companies Acts. No other authority can initiate or continue proceedings where the NFRA has initiated an investigation. Such an investigation can be initiated either by itself or on a reference made by the Central Government.
The same powers as a Civil Court under the Code of Criminal Procedure, 1908, in respect of a suit involving the following matters.
Discovery and production of books of account and other documents, at such place and time as may be specified by the NFRA Summoning and enforcing the attendance of persons and examining them under oathInspection of any books, registers, and other documents of any person at any placeIssuing commissions for the examination of witnesses or documents
Where professional or other misconduct is proved, it shall have the power to impose the following punishment
For individuals a fine between Rs. 1,00,000 to 5 times the fees received;For firms a fine Between Rs. 5,00,000 to 10 times the fees received;
Debarring the member/firm from practice as a member of ICAI between 6 months to 10 years as may be decided.
Need for NFRA - 
The requirement of NFRA was to strengthen the Financial System of India and to bring back the trust in Indian Auditors, which has been stained by recent events.The government has taken a decision to declare the NFRA  immediate after the fraud of Punjab National Bank. This fraud has raised so many questions pertaining to the failure of internal and external auditors of the bank who ought to notice the guarantees being issued to Modi.The auditors failed to detect the fraud which was going on since 2011.This fraudulent case of Rs12,636 crore at PNB was the nal verge that pushed the government to approve NFRA.

April 14, 2020

Prepaid payment Instruments/Definition of PPIs/Types of PPIs/Credit limit in PPIs/Regulator of PPIs/Holder of PPIs

Prepaid Payment Instruments (PPIs): Do you know about Prepaid Payment Instruments (PPIs)? What are the various types of PPIs? What is the limit under PPIs? If you know then just go this post for a quick revision. If you don't then read this post thoroughly. 
What are Prepaid Payment Instruments (PPIs)
To understand PPI you can understand it by breaking the three terms Prepaid + Payment + Instrument.
It is prepaid – Money is preloaded in such instruments for payment.
Payment Medium – These are a medium for payment for the purchase of goods and services.
Instrument of payment- These are a payment instrument and can be card or wallets.
So basically PPIs are instruments (card/wallets) that are preloaded with money/value and can be used for the purchase of goods and services against this money/value.
Who regulates PPIs
These Prepaid Payment Instruments are licensed and regulated by the Reserve Bank of India under the Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (PSS Act, 2007).
Who can issue Prepaid Payment Instruments (PPIs)
To issue a repaid Instrument there is a pre-requirement that:
A company incorporated in India and registered under the Companies Act, 1956 / Companies Act, 2013 can issue and operate PPIs after receiving authorisation from RBI.PPI issuer is an entityoperating/participating in a payment system for issuing PPIs to individuals/organizations.
Holder of PPI: The person who obtains the Prepaid Payment Instruments from the PPI issuer and further uses it for the purchase of goods and services is the holder of the PPI.
Types of Prepaid Payment Instruments (PPIs)
Based on the issuer and end use of thePrepaid Payment Instrument, PPI can be classified into three types:
(i) Closed System PPIs
(ii) Semi-closed System PPIs, and
(iii) Open System PPIs.
We will first give an example of each and then define it. This will help you in grasping the concept in an easy way.
Closed System PPIs
Example of Closed System PPI- Flipkart Gift Cards, Amazon Gift Cards or any other brand-specific gift card
Definition: Closed System PPIs are issued by an entity to a person/organisation to enable purchase from that entity only. Example: Using Amazon Gift card you can shop only on Amazon, you cannot shop with it on Flipkart. Hence the name Closed system signifies that it is a closed payment instrument i.e the brand that gives you the money in the PPIs allows you to use it only on its brand i.ea closed system.
Features of Closed System PPI:
It does not permit cash withdrawal It cannot be used for payments or settlement for third-party services Such instruments are not classified as payment system requiring approval/authorisation by the RBI.
Semi-closed System PPIs
Example of Semi-closed System PPIs:e-wallets like PaytmOxigen and Mobikwik.
Definition: Semi-closed PPIs are issues by the entity for the purchase of goods and services at a group of clearly identified merchant locations/establishments which have a specific contract with the issuer entity.
Who can issue Semi-Closed System PPIs? – Banks (approved by RBI) and non-banks (authorized by RBI)
Features of Semi-Closed System PPIs?
These instruments do not permit cash withdrawal.Can be used to transfer the value from one instrument to another. Like you can send money from one paytm wallet to another.
Open System PPIs
Example of Open System PPI: All cards like Visa, MasterCard or Rupay card issued by Banks
Definition: These PPIs can be issued only by banks and can be used for the purchase of goods and services anywhere. Cash Withdrawal is also allowed in this at ATMs, PoS and Business Correspondents.
Limits in PPIs
Cash loading to PPIs shall be limited to Rs.50,000/- per month subject to the overall limit of the PPI.
Credit Limit in Semi-Closed Wallets (non-KYC)
The amount loaded in such PPIs during any month shall not exceed Rs.10,000/-The total amount loaded during the financial year shall not exceed Rs.1,00,000/-.The amount outstanding at any point of time in such PPIs shall not exceed Rs.10,000/-The total amount debited from such PPIs during any given month shall not exceed Rs. 10,000/-.
Credit Limit in Semi-Closed Wallets
The amount outstanding shall not exceed Rs.1,00,000/- at any pointof time.KYC Compliant Semi-Closed Wallets can add beneficiaries for fund transfer. In case of such pre-registered beneficiaries, the fund transfer limit shall not exceed Rs.1,00,000/- per month per beneficiary. The fund transfer limits for all other cases shall be restricted to Rs.10,000/- per month.
Open system PPIs
The amount outstanding shall not exceed Rs.1,00,000/- at any pointof time.KYC Compliant Open PPIs can add beneficiaries for fund transfer. In case of such pre-registered beneficiaries, the fund transfer limit shall not exceed Rs.1,00,000/- per month per beneficiary. The fund transfer limits for all other cases shall be restricted to Rs.10,000/- per month.
Limit on Gift instruments
Banks and non-bank entities can issue prepaid gift instruments to itscustomers subject to the following conditions:The maximum value of each prepaid gift instrument shall not exceed Rs.10,000/-.These instruments cannot be reloadable.Fund transfer is not permitted.
PPIs for Mass Transit Systems
These are semi-closed PPIs and issued by mass transit system operators. Maximum value outstanding in PPI cannot exceed the limit of Rs. 3,000/- at any point of time. Are reloadable in nature

April 12, 2020

Foreign Exchange Regulation Act(FERA)


Introduction
Foreign Exchange Regulation Act (FERA) was introduced at a time when foreign
exchange (Forex) reserves of the country were low. FERA proceeded on
presumption that all foreign exchange earned by Indian residents rightfully
belonged to the Government of India and had to be collected and surrendered to
the Reserve Bank of India (RBI). FERA primarily prohibited all transactions that
are not permitted by RBI. The objective of FERA was to regulate certain payment
dealings in foreign exchange and securities transactions that indirectly affects
foreign exchange of import and export of currency and to conserve precious
foreign exchange and to optimize the proper utilization of foreign exchange so as
to promote the economic development of the country.
Basic definitions of FERA
Authorized dealer- means a person for the time being authorized to deal
in foreign exchange.
Bearer certificate- means a certificate to securities of which the title to the
securities is transferable.
Coupon- means a coupon representing dividends or interest on a security.
Currency- includes all coins, currency notes, banks notes, postal notes,
postal orders, money orders, cheques, drafts, traveller's cheques, letters of
credit, bill of exchange and promissory notes.
Foreign currency- means any currency other than Indian currency.
Foreign exchange- means foreign currency all deposits, credits and
balance payable in any foreign currency and any drafts traveller's cheque,
letters of credit and bill of exchange drawn in the form of Indian currency
but payable in any foreign currency.
Foreign security- means any security created or issued elsewhere than in
India and any security the principal of interest on which is payable in any
foreign currency or elsewhere than in India.
Money changer- means a person for the time being authorized to deal in
foreign currency.
Overseas market- means the market in the country outside India and in
which such goods are intended to be sold.
Transfer- in relation to any security includes transfer by way of loan or
security.Officers of Enforcement
The officers of Enforcement take different roles in foreign exchange enforcement.
They are as follows
Director of Enforcement
Additional Director of Enforcement
Deputy Director of Enforcement
Assistant Director of Enforcement
Officers of Enforcement can be appointed for the purposes of this Act.
The appointment of enforcement officer and their powers are appointed by
central government. The Central Government may appoint persons such as it
thinks fit to be officers of Enforcement. Subject to conditions and limitations as
the Central Government may impose an officer of Enforcement may exercise
powers and discharge the duties conferred on him under this Act.
Features of FERA
FERA applied to all citizens of India. The idea was to regulate the foreign
payments that deal the Foreign Exchange and securities and conservation of
Foreign exchange for the nation. RBI can authorize a person / company to deal in
foreign exchange and also can authorize the dealers to do transact the Foreign
Currencies subject to review. RBI was given power to revoke the authorization in
case of non-compliancy. RBI authorizes Money Changers who will convert the
currency of one nation to currency of other nation at rates determined by RBI.
For whatever purpose Foreign exchange is required it has to be used only for that
purpose. If he feels that he cannot use the currency for that particular purpose
he would sell it to an authorized dealer within 30 days. Some of the rules and
restrictions that are followed by RBI are as follows
Restrictions on import and export of certain currency
Restrictions on payments that is illegal
Restrictions on dealing in foreign exchange
Payment for exported goods are done according to RBI
Restrictions on issue of bearer securities
Restriction on settlement in other country
Restriction on holding of immovable property outside India
Restrictions on the appointment of certain persons and companies as
agents for doing FOREX. Restrictions on establishment of place of business in India
Permission of Reserve Bank required for practicing profession, etc. in India
by nationals of foreign States
Restriction on acquisition, holding, etc., of immovable property in India
RBI has the Power to call for information of any person documents like
Indian currency, foreign exchange and books of account.
Power to search suspected persons and to seize documents
Conclusion
At the time of legislation of the law, India had shortage of foreign exchange
(forex). The government then tried to restrict the exchanges, or dealings of India
with foreign countries. But the rules and regulations had great impact on the
import and export of currency.
There were several issues with this act those are
Law violators were treated as criminal offenders.
Wide power in the hand of Enforcement Directorate to arrest any person
and seize any document (Corporate world found themselves at the mercy
of E.D)
Control everything that was specified related to foreign exchange and
aimed for minimizing dealings in forex and foreign securities, etc.
With liberalization there has been a move to remove the measures of FERA and
replace it with a set of foreign exchange management regulations. A draft for the
Foreign Exchange Management Bill (FEMA) was prepared by the Government of
India to replace FERA keeping in view of the Indian economy. However until
FEMA is enacted the provisions of FERA was applied. These are important basic
information about Foreign Exchange Regulation Act (FERA).

April 11, 2020

Structure of Banking sector in India study in detail

Structure of Banking Sector in India
Reserve Bank of India is the Central Bank of our country. It was established on 1st April 1935 under the RBI Act of 1934. It holds the apex position in the banking structure. RBI performs various developmental and promotional functions. As of now 26 public sector banks in India out of which 21 are Nationalised banks and 5 are State Bank of India and its associate banks. There are total 92 commercial banks in India. Public sector banks hold near about 75% of the total bank deposits in India.
Indian Banks are classified into commercial banks and Co-operative banks. Commercial banks comprise: (1) Schedule Commercial Banks and non-scheduled commercial banks. Schedule Commercial Banks are further classified into private, public, foreign banks and Regional Rural Banks and (2) Co-operative banks which include urban and rural Co-operative banks.
The Indian banking industry has its foundations in the 18th century, and has had a varied evolutionary experience since then. The initial banks in India were primarily traders' banks engaged only in financing activities. Banking industry in the pre-independence era developed with the Presidency Banks, which were transformed into the Imperial Bank of India and subsequently into the State Bank of India.
The initial days of the industry saw a majority private ownership and a highly volatile work environment. Major strides towards public ownership and accountability were made with Nationalisation in 1969 and 1980 which transformed the face of banking in India. The industry in recent times has recognised the importance of private and foreign players in a competitive scenario and has moved towards greater liberalisation.
In the evolution of this strategic industry spanning over two centuries, immense developments have been made in terms of the regulations governing it, the ownership structure, products and services offered and the technology deployed. The entire evolution can be classified into four distinct phases. The phases are -
1. Phase I- Pre-Nationalisation Phase (prior to 1955)
2. Phase II- Era of Nationalisation and Consolidation (1955-1990)
3. Phase III- Introduction of Indian Financial and Banking Sector Reforms and Partial Liberalisation (1990-2004)
4. Phase IV- Period of Increased Liberalisation (2004 onwards)
Organisational Structure
1. Reserve Bank of India
Reserve Bank of India is the Central Bank of our country. It was established on 1st April 1935 accordance with the provisions of the Reserve Bank of India Act, 1934. It holds the apex position in the banking structure. RBI performs various developmental and promotional functions.
For example, Federal Reserve Bank of U.S.A, Bank of England in U.K. and Reserve Bank of India in India. Central bank is known as a banker's bank. They have the authority to formulate and implement monetary and credit policies. It is owned by the government of a country and has the monopoly power of issuing notes.
2. Commercial Banks
These institutions run to make profit. They cater to the financial requirements of industries and various sectors like agriculture, rural development, etc. it is a profit making institution owned by government or private of both.
Commercial bank includes public sector, private sector, foreign banks and regional rural banks.
Currently there are 21 Nationalised banks in India. The public sector accounts for 75 percent of total banking business in India and State Bank of India is the largest commercial bank in terms of volume of all commercial banks.
Now from April 1, 2017 all the 5 associate banks of SBI and Bhartiya Mahila Bank are merged with State Bank of India. After this merger now SBI is counted among the top 50 largest banks of the world. Some other banks merger going on.
Nationalised Banks in India are
Allahabad Bank
Andhra Bank
Bank of India
Bank of Baroda
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab and Sindh Bank
Punjab National Bank
State Bank of India
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank
The private-sector banks in India represent part of the Indian banking sector that is made up of both private and public sector banks. The "private-sector banks" are banks where greater parts of stake or equity are held by the private shareholders and not by government.
5. Foreign Banks
A foreign bank with the obligation of following the regulations of both its home and its host countries. Loan limits for these banks are based on the capital of the parent bank, thus allowing foreign banks to provide more loans than other subsidiary banks.
Foreign banks are those banks, which have their head offices abroad. CITI bank, HSBC, Standard Chartered etc. are the examples of foreign bank in India. Currently India has 36 foreign banks.
The government of India set up Regional Rural Banks (RRBs) on October 2, 1975. The banks provide credit to the weaker sections of the rural areas, particularly the small and marginal farmers, agricultural labourers, and small entrepreneurs. There are 82 RRBs in the country. NABARD holds the apex position in the agricultural and rural development.
Co-operative bank was set up by passing a co-operative act in 1904. They are organised and managed on the principal of co-operation and mutual help. The main objective of co-operative bank is to provide rural credit.
The cooperative banks in India play an important role even today in rural co-operative financing. The enactment of Co-operative Credit Societies Act, 1904, however, gave the real impetus to the movement. The Cooperative Credit Societies Act, 1904 was amended in 1912, with a view to broad basing it to enable organisation of non-credit societies.
Scheduled and Non-Scheduled Banks
The scheduled banks are those which are enshrined in the second schedule of the RBI Act, 1934. These banks have a paid-up capital and reserves of an aggregate value of not less than Rs. 5 lakhs, they have to satisfy the RBI that their affairs are carried out in the interest of their depositors.
All commercial banks (Indian and foreign), regional rural banks, and state cooperative banks are scheduled banks. Non- scheduled banks are those which are not included in the second schedule of the RBI Act, 1934. At present these are only three such banks in the country.

Cooperative Banks in India in Details

Cooperative Banks in India
Cooperative Banks in India have become an integral part of the success of Indian Financial Inclusion story. They have achieved many landmarks since their creation and have helped normal rural Indian to feel empowered and secure. The story has not been smooth and has its
share of procedural glitches and woes placed at various pockets.
History of Cooperative Banking in India:-
The historical roots of the Cooperative Movement in the world days back to days of misery and distress in Europe faced by common people who had little or no access to credit to fund their basic needs, in uncertain times. The idea spread when the continent was faced with economic turmoil which led large populations to live at subsistence level without any economic security.
People were forced to poverty and deprivation. It was the idea of Hermann Schulze (1808-83) and
Friedrich Wilhelm Raiffeisen (1818-88) which took shape as cooperative banks of today across the world. They started to promote the idea of easy availability of credit to small businesses and for
the poor segment of society. It was similar to the many microfinance institutions which have become highly popular in developing economies of today.
Although this helped spread cooperative movement in many parts of Europe, in British Isles it is came from the revivalist Christian movement and found high acceptance with working class and lower middle class segments of society. However, UK and Irish credit unions in 20th century were
inspired by US credit unions which in-turn owe their emergence to Canadian adaptations of the German cooperative banking concept.
These movements were supported by governments of the respective countries. This success was achieved due to the failure of the commercial banks to fund and support the needs of small business owners and ordinary people who were outside the formal banking net. Cooperative banks
helped overcome the vital market imperfections and serviced the poorer layers of society.
Indian Cooperative Banks was also born out of distress prevalent in Indian society.
The Cooperative Credit Societies Act, 1904 led to the formation of Cooperative Credit Societies in both rural and urban areas. The act was based on recommendations of Sir
Frederick Nicholson (1899) and Sir Edward Law (1901). Their ideas in turn were based on the pattern of Raiffeisen and Schulze respectively.
The Cooperative Societies Act of 1912, further gave recognition to the formation of non-credit
societies and the central cooperative organizations.
In independent India, with the onset of planning, the cooperative organizations gained more
leverage and role with the continued governmental support.
Machlagan Committee in 1915, highlighted the deficiencies of in cooperative societies which
seeped-in due to lack of proper education to the masses. He also laid down the importance of
Central Assistance by the Government to support the movement.
The Royal Commission on Agriculture 1928, enumerated the importance of education of
members/staff for effective implementation of cooperative movement. Saraiya Committee, in 1945, further recommended the setting up of a Cooperative Training
College in every state and a Cooperative Training Institute for Advanced Study and Research
at the Central level.
Central Committee for Cooperative Training in 1953, constituted by RBI for establishing
Regional Training Centres.
Rural Credit Survey Committee, 1954 was the first committee formed till then to first delve
into the problems of Rural credit and other financial issues of rural society.
The cooperative movement and banking structures soon spread and resonated with the
unexpressed needs of the rural Indian and small scale businesses. Since, 1950s, they have come a
long way to support and provide assistance in activities like credit, banking, production,
processing, distribution/marketing, housing, warehousing, irrigation, transport, textiles, dairy,
sugar etc. to households.
Extent of Cooperative Banking
Indian cooperative structures are one of the largest such networks in the world with more than 200
million members. It has about 67% penetration in villages and fund 46% of the total rural credit. It
also stands for 36% of the total distribution of rural fertilizers and 28% of rural fair price shops.
Structure of Cooperative Banking in India
The structure of cooperative network in India can be divided into 2 broad segments-
1. Urban Cooperative Banks
2. Rural Cooperatives
Urban Cooperatives
Urban Cooperatives can be further divided into scheduled and non-scheduled. Both the categories
are further divided into multi-state and single-state. Majority of these banks fall in the non-
scheduled and single-state category.
Banking activities of Urban Cooperative Banks are monitored by RBI.
Registration and Management activities are managed by Registrar of Cooperative Societies
(RCS). These RCS operate in single-state and Central RCS (CRCS) operate in multiple state.
Rural Cooperatives
The rural cooperatives are further divided into short-term and long-term structures. The short-
term cooperative banks are three tiered operating in different states. These are-
1. State Cooperative Banks- They operate at the apex level in states
2. District Central Cooperative Banks-They operate at the district levels
3. Primary Agricultural Credit Societies-They operate at the village or grass-root level.  Likewise, the long-term structures are further divided into
1. State Cooperative Agriculture and Rural Development Banks (SCARDS)- These operate at
state-level.
2. Primary Cooperative Agriculture and Rural Development Banks (PCARDBS)-They operate at
district/block level.
The rural banking cooperatives have a complex monitoring structure as they have a dual control
which has led to many problems. A Forum called State Level Task Force on Cooperative Urban
Banks (TAFCUB) has been set-up to look into issues related to duality in control.
All banking activities are regulated by a shared arrangement between RBI and NABARD.
All management and registration activities are managed by RCS.
Cooperative Banks- Irritants and Future Trends
A cooperative bank is an institution which is owned by its members. They are the culmination of
efforts of people of same professional or other community which have common and shared
interests, problems and aspirations. They cater to a services like loans, banking, deposits etc. like
commercial banks but widely differ in their values and governance structures.
They are usually democratic set-ups where the board of members are democratically elected with
each member entitled to one vote each. In India, they are supervised and controlled by the official
banking authorities and thus have to abide by the banking regulations prevalent in the country.
The basic rules, regulations and values may differ amongst nations but they have certain common
features:
Customer-owned
Democratic structures
Profits are mainly pooled to form reserves while some amount is distributed to members
Involved in community development
Foster financial inclusion by bringing banking to the doorstep of the lowest segment of
society
These banks are small financial institutions which are governed by regulations like Banking
Regulations Act, 1949 and Banking Laws Cooperative Societies Act, 1965. They operate both in
urban and rural areas under different structural organisations. Their functions are decided by the
level at which they operate and the type of people they cater to. They greatly differ from the
commercial banking entities.
These are established under specific acts of cooperative societies operating in different states
unlike mainstream commercial banks which are mainly joint-stock companies.
They have a tiered network with a bank at each level of state, district and rural. The state-
level bank forms the apex authority.
Not all sections of banking regulation act are applicable to cooperative banks
The ultimate motive is community participation, benefit and growth as against profit-
maximisation for commercial banks. Major irritants in the functioning of the Cooperative Banks
The duality in control by RCS of a state as 'Cooperation' is a state subject. However financial
regulatory control by RBI has led to many troubles as there is ambiguity in power structure
as there is no clear demarcation.
Patchy growth of cooperative societies across the map of India. It is said these have grown
maximally in states of Gujarat, Maharashtra, Tamil Nadu whereas the other parts of India
don't have a heightened presence.
The state partnership has led to excessive state control and interference. This has eroded the
autonomous characters of many of these.
Dormant membership has made them moribund as there is a lack of active members and
lack of professional attitude.
Their main focus being credit so they have reduced to borrower-driven entities and majority
of members are nominal and don't enjoy voting rights.
Credit recovery is weak especially in rural areas and it has sustainability crisis in some
pockets.
There is a lack of risk management systems and lack of basic standardised banking models.
There is a widening gap between the level of skills and the increasing computerisation of
banks.

April 10, 2020

Payment Banks detail study

Payment Banks
Payment Banks are to be registered as public limited companies under the Companies Act, 2013 and are to be licensed under Section- 22 of the Banking Regulation Act, 1949. Payment Banks are to be given the status of scheduled banks under the section 42 (6) (a) of the Reserve Bank of India Act, 1934. However, the words "Payments Bank" have to be used by the companies in their name in order to differentiate it from other banks.
They will be governed by the provisions of the Banking Regulation Act, 1949; Reserve Bank of India Act, 1934; Foreign Exchange Management Act, 1999; Payment and Settlement Systems Act, 2007; Deposit Insurance and Credit Guarantee Corporation Act, 1961 and other relevant Statutes and directives. The guidelines will be reviewed by the RBI regularly. RBI's main aim to push for payments bank is to serve the need of different banking activities in the rural areas. This has both micro and macroeconomic benefits and serves the general public at large.
History of Payment Banks
RBI on 23rd September 2013 constituted a committee on Comprehensive Financial Services for Small businesses and Low-Income Households that was headed by Nachiket Mor. The committee submitted its report on 7th January 2014 and also recommended the formation of a new category (Payment Banks) among its other recommendations.
Draft guidelines for the license of Payment Banks and their list were released by RBI in February 2015. The license applications were evaluated by External Advisory Committee headed by Nachiket Mor who submitted its report on 6th July 2015 after examining the financial track record as well as governance issue on applicant entities.
On 19th August 2015, RBI gave the in-principle license to 11 entities to launch Payment Banks. The In-Principle License is valid for a period of 18 months and the concerned entities are required to fulfil entities are required to fulfil all the requirements within this period. They are not allowed to engage in Banking activities in this period. After the fulfilment of all the conditions which are required to set up a Payment Bank, RBI will grant licenses under Section- 22 of the Banking Regulation Act, 1949.
Conditions to set up Payments Banks
The minimum capital requirement to set up a Payments Bank is Rs. 100 crore.The stake of the promoter for the initial 5 year period should be minimum 40%.Foreign share holdings will be permitted subject to the rules of foreign direct investment for private banks in India.The voting rights in the bank will be regulated by Banking Regulation Act, 1949 and the upper cap of voting right for any shareholder will be 10%. This may be raised to 26% by Reserve bank of India.Any acquisition of more than 5% needs to be approved by RBI. Majority of Bank's board of Directors should consist of independent directors, who should be appointed as per RBI Guidelines. Payments Bank can accept Utility Bills and they cannot form separate subsidiary to undertake non-banking activities.25% of the branches of these banks should be in the unbanked rural areas. Payment Banks cannot approve/ disburse loans or issue credit cards. Payment banks can offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third party fund transfers.
List of Payment Banks in India
FINO PayTech Paytm, Reliance Industries, Aditya Birla, Nuvo India Post, Tech Mahindra, Airtel M Commerce Services,National Securities Depository, Cholamandalam Distribution Services, Sun Pharmaceuticals, Vodafone M-Pesa ,Department of Posts

April 09, 2020

Local Area Bank and Regional Rural Bank

Local Area Banks
Local Area Banks were set up as per a Government of India Scheme announced in August 1996.
The intention of the government was to set up new private local banks with jurisdiction over two or
three contiguous districts. The objective of establishing the local area banks was to enable to
mobilization of the rural savings by local institutions and make them available for investments in
local areas. Thus, the overall idea was to bridge the gaps in the credit availability in the rural and
semi-urban areas, thereby strengthening the institutional credit mechanism in such areas.
Pursuant to announcement of this scheme, RBI received some 227 applications, but most of them
were rejected. RBI approved established of only 10 Local Area Banks but out of them only 4 are
into existence as of 2015.
Key Features of the Local Area Banks
Each local Area bank is registered as a public limited company under the Companies Act,
1956. However, they are licensed under the Banking Regulation Act, 1949.
The Local Area Banks are the only type of Non-scheduled Banks of India. However, they are
eligible to be included in the Second Schedule of the RBI Act 1934 subject to eligibility
criteria of RBI.
Local Area Banks have jurisdiction over a maximum of three contiguous districts, and their
basic function is to mobilise funds in rural and semi-urban areas.
The minimum start-up capital of a LAB was fixed at Rs.5 crore and the promoters were asked
to bring entire minimum share capital up-front. The promoters could be individuals, firms or
societies. The family of the individual promoters was not allowed to keep more than 40% of
the equity capital of the banks. The NRI promoters could not exceed more than 20% of total
number of promoters.
The Local Area banks are subject to prudential norms, accounting policies and other policies
as stipulated by the RBI. Such a bank has to maintain capital adequacy at 8% of risk
weighted assets and comply with the norms of income recognition, asset classification and
provisioning since inception.
Each Local Area Bank is allowed to open branch in only one urban centre per District and rest
of the branches were allowed to be opened in the rural and semi urban centers subject to
requisite clearance in respect of rural branches from the District Consultative Committee.
Functions of Local Area Banks
The Local Area Banks can do all normal banking business but their major function was to
finance agriculture and allied activities, small scale industries, agro-industries and trading /
non-farm activities in the rural and semi-urban areas.
These banks had to give out 40% of total credit to priority sector, of which 10% is to be
given to weaker sections of the society.
Current Functioning Local Area Banks in India. There are only four Local Area Banks (LAB) in India, which exist in the form of Non-scheduled
banks. They are as follows:
Coastal Local Area Bank Ltd
This bank was established on 27th December 1999. Its area of operation includes three contiguous
districts viz. Krishna, Guntur and West Godavari. Its head office is located at Vijayawada in Andhra
Pradesh.
Capital Local Area Bank Ltd
This bank was established on 14th January 2000. Its area of operation includes three districts viz.
Jalandhar, Kapurthala and Hoshiarpur in Punjab. The head office is at Phagwara (Punjab).
Krishna Bhima Samruddhi Local Area Bank Ltd
This bank was established on 28th February 2001 with an area of operation comprising three
contiguous districts of Mahbubnagar in Andhra Pradesh and Raichur and Gulbarga in the state of
Karnataka with its head office at Mahbubnagar(Andhra Pradesh).
Subhadra Local Area Bank Ltd., Kolhapur
This is smallest Local Area Bank with only 8 branches. Its head office is in Kolhapur.
Dysfunctional Local Area Banks
Further, a South Gujarat Local Area Bank Ltd was established in 2000 with headquarters at Navsari
in Gujarat. This bank failed to maintain CRR and SLR and suffered net losses in consecutive years.
Its promoters were found to be involved in scams. Consequently, this bank was merged with Bank
of Baroda in 2004. Further, one more local area bank namely Vinayak Local Area Bank Ltd., Sikar in
Rajasthan was established on 21st
October 2000. But RBI cancelled its license in 2002 due to
major irregularities.   
               Regional Rural Banks
The nationalization of the banks in 1969 boosted the confidence of the public in the Banking
system of the country. However, in the early 1970s, there was a feeling that even after
nationalization, there were cultural issues which made it difficult for commercial banks, even under
government ownership, to lend to farmers. This issue was taken up by the government and it set
up Narasimham Working Group in 1975. On the basis of this committee's recommendations, a
Regional Rural Banks Ordinance was promulgated in September 1975, which was replaced by the
Regional Rural Banks Act 1976.
Genesis of Regional Rural Banks
Regional Rural Banks came into existence on Gandhi Jayanti in 1975 with the formation of a
Prathama Grameen Bank. The rural banks had the legislative backing of the Regional Rural
Banks Act 1976 . This act allowed the government to set up banks from time to time wherever it
considered necessary.
The RRBs were owned by three entities with their respective shares as follows:
Central Government → 50%
State government → 15%
Sponsor bank → 35%
Regional Rural Banks were conceived as low cost institutions having a rural ethos, local feel and
pro poor focus. Every bank was to be sponsored by a "Public Sector Bank", however, they were
planned as the self sustaining credit institution which were able to refinance their internal
resources in themselves and were excepted from the statutory pre-emptions.
Problems with Regional Rural Banks
But the original assumptions were belied as within a very short time, most banks were making
losses. The RRB concept was based upon the policy that they would lend only to the weaker
sections of rural society, charging lower interest rates, opening branches in remote and rural areas
and keep a low cost profile. But the commercial motivation was absent.
Initially the banks expanded and by the end of year 1985 RRBS had opened 12606 branches.
During this period their credit deposit Ratio (C.D.R) expanded very fast. In 1976 it was 165% and
gradually declined to 104 % in December 1986. The Credit Deposit Ratio continuously declined
thereafter.
Later, the questions started being raised about the viability of these banks. The Khusrau
Committee of 1989, noted that the weaknesses of RRBs are endemic to the system and non-
viability is built into it, and the only option was to merge the RRBs with the sponsor banks. The
objective of serving the weaker sections effectively could be achieved only by self-sustaining credit
institutions. RRBs were finding themselves unable to sustain because of the mounting losses due to
imprudent commercial policy. Thus, Khusrau Committee (aka Agricultural Credit. Review Committee) said that the RRBs have no justifiable cause for continuance and
recommended their mergers with sponsor banks.
But by that time, the branch network had expanded so large that it would be political unwise for
the government to merge the RRBs with sponsor Banks.
Recommendations of Narsimham Committee on RRBs
The Narsimham Committee in 1990s also reiterated that the RRBs should be merged with the
sponsor banks. By 1993, 172 of the 196 RRBs were recorded unprofitable. The paid up capital
which was ` 25 Lakh at that time was not able to absorb the loan losses of most of the RRBs. The
loan recovery was around 40%. The First Narasimham Committee recommended that the RRBs
should also be permitted to engage in all types of banking business and should not be forced to
restrict their operations to the target groups. The Narasimham committee also recommended
that there should be mergers of the RRBs with their sponsor bank, BUT the "sponsor banks might
decide whether to retain the identities of sponsored RRBs or to merge them with rural subsidiaries
of commercial banks to be set up on the recommendation of the committee". The first
recommendation of letting the RRBs do all businesses was accepted by the government.
Some measures were taken by the Reserve Bank of India also. It allowed the RRBs to relocate
their branches if they were making losses at one location for more than 3 years. They were also
allowed to finance the non-target groups to the extent not exceeding 40 percent of their
incremental lending. This limit was subsequently enhanced to 60 percent in 1994. As a result, the
RRBs diversified into a range of non-priority sector (NPS) advances, including jewel and deposit-
linked loans, consumer loans and home loans
Some efforts were done by NABARD with funding support of the Swiss Development Corporation
(SDC). It took a number of HR and Organizational Development in these banks.
Turnaround of RRBs
The above discussion makes it clear that most RRB were making loss and had deviated from the
original idea that had created them. But there were some profit making RRBs also. Some reforms
led the rise in the number of the profit making RRBs but most of them were having a low credit
deposit ratio. This was coupled with the decreasing percentage of loans to small and marginal
farmers out of the total loans disbursed by the RRBs. The RRBs NPA level was high. In the early
2000s there was no prescribed CRAR (capital to risk weighted asset ratio) for the RRBs. In 2005,
based upon the recommendation of an internal working group the RRBs were asked to maintain a
capital to risk weighted asset ratio at 5% and over the period of time they were expected to align
themselves to Basel I standards. However, the major reform was to merge the RRBs with the
sponsor banks.There were 196 RRBs sponsored by 27 SCBs and one State Cooperative Bank were operating in
the country with a network of 14,484 branches spread over 523 districts as on March 31, 2005.
The government started the process of consolidation and amalgamation in 2005, bringing the
number down to 82 in 2010.
As of March-end, 2011, the total number of RRBs stood at 82. This number fell to 64 in March
2013. As of March 2014, the number of RRBs has been reduced to 57. After the 2014 elections, the
new NDA government has put hold on further amalgamation of the Regional Rural Banks. The
focus of the new government is to improve their performance and exploring new avenues of
investments in the same. Currently, there is a bill pending to amend the RRB Act which aims at
increasing the pool of investors to tap capital for RRBs.
Regulation of RRBs
Regional Rural Banks are regulated by National Bank for Agriculture and Rural Development
(NABARD). Please note that currently seven states viz. Tripura, Nagaland, Manipur, Mizoram,
Arunachal Pradesh Meghalaya and Puducherry, have state-level RRBs. Gujarat and Karnataka too
have demanded formation of state level RRB. In case of West Bengal, the state Assembly took
unanimous resolution in favour of State level RRB in the year 2004

April 07, 2020

Private and Public sector Banks

Private Sector Banks in India
Private Sector Banks refer to those banks where most of the capital is in private hands. In India,
there are two types of private sector banks namely Old Private Sector Banks and New Private Sector
Banks. Old private sector banks are those which existed in India at the time of nationalization of
major banks but were not nationalized due to their small size or some other reason. After the
banking reforms, these banks got license to continue and have existed in India along with new
private banks and government banks.
Old Private Banks
At present, there are 12 old private sector banks in India as follows:
1. Catholic Syrian Bank
2. City Union Bank
3. Dhanlaxmi Bank
4. Federal Bank
5. Jammu and Kashmir Bank
6. Karnataka Bank
7. Karur Vysya Bank
8. Lakshmi Vilas Bank
9. Nainital Bank
10. Ratnakar Bank
11. South Indian Bank
12. Tamilnad Mercantile Bank
Among the above, Nainital Bank is a subsidiary of the Bank of Baroda, which has 98.57% stake in
it.
Defunct Private Banks
Some other old generation private sector banks in India have merged with other banks. For
example, Lord Krishna Bank merged with Centurion Bank of Punjab in 2007; Sangli Bank merged
with ICICI Bank in 2006; Centurion Bank of Punjab merged with HDFC in 2008.More recently, in
2016, the ING Vysya Bank merged with Kotak Mahindra Bank, creating the fourth largest private
sector bank in India.
New Private Sector Banks in India
The new private sector banks were incorporated as per the revised guidelines issued by the RBI
regarding the entry of private sector banks in 1993. At present, there are 9 new private sector
banks as follows:
1. Axis Bank
2. Development Credit Bank (DCB Bank Ltd)
3. HDFC Bank
4. ICICI Bank.                                           5. IndusInd Bank
6. Kotak Mahindra Bank
7. Yes Bank
8. IDFC
9. Bandhan Bank of Bandhan Financial Services.
Kindly note that all the old and new banks listed above are scheduled commercial banks.                    Public Sector Banks in India
Public Sector Banks in India refers to those banks in which the Government equity / shareholding
is more than 50%. At present, there are 22 Public Sector Banks in India of which 21 are scheduled
commercial banks while one namely India Post Payment Bank is a payment bank. These along with
their current government equity are as follows:
1. Allahabad Bank (60%)
2. Andhra Bank (61%)
3. Bank of Baroda (63.7%)
4. Bank of India (64.4%)
5. Bank of Maharashtra (81.61%)
6. Canara Bank (64.5%)
7. Central Bank of India (81.5%)
8. Corporation Bank (100%)
9. Dena Bank (80.7%)
10. IDBI Bank (76.5%)
11. Indian Bank (81.51%)
12. Indian Overseas Bank (89.90%)
13. Oriental Bank of Commerce (77.23%)
14. Punjab & Sind Bank (79.62%)
15. Punjab National Bank (60%)
16. State Bank of India (59%)
17. Syndicate Bank (66.17%)
18. UCO Bank (84.23%)
19. Union Bank of India (63.44%)
20. United Bank of India (85.91%)
21. Vijaya Bank (68.8%)
22. India Post Payments Bank (100%) [Payments Bank]. Apart from these, IDBI has been classified as "Other Public Sector Banks". The UPA government
had launched a Bhartiya Mahila Bank also, which in 2017 was merged in State Bank of India.

Banking Reforms and Merger of the Banks

Banking Sector Reforms During
Nationalization in India
The financial Regional Rural Banks 
The nationalization of the banks in 1969 boosted the confidence of the public in the Banking 
system of the country. However, in the early 1970s, there was a feeling that even after 
nationalization, there were cultural issues which made it difficult for commercial banks, even under 
government ownership, to lend to farmers. This issue was taken up by the government and it set 
up Narasimham Working Group in 1975. On the basis of this committee’s recommendations, a 
Regional Rural Banks Ordinance was promulgated in September 1975, which was replaced by the 
Regional Rural Banks Act 1976. 
Genesis of Regional Rural Banks 
Regional Rural Banks came into existence on Gandhi Jayanti in 1975 with the formation of a 
Prathama Grameen Bank. The rural banks had the legislative backing of the Regional Rural 
Banks Act 1976 . This act allowed the government to set up banks from time to time wherever it 
considered necessary. 
The RRBs were owned by three entities with their respective shares as follows: 
Central Government → 50% 
State government → 15% 
Sponsor bank → 35% 
Regional Rural Banks were conceived as low cost institutions having a rural ethos, local feel and 
pro poor focus. Every bank was to be sponsored by a “Public Sector Bank”, however, they were 
planned as the self sustaining credit institution which were able to refinance their internal 
resources in themselves and were excepted from the statutory pre-emptions. 
Problems with Regional Rural Banks 
But the original assumptions were belied as within a very short time, most banks were making 
losses. The RRB concept was based upon the policy that they would lend only to the weaker 
sections of rural society, charging lower interest rates, opening branches in remote and rural areas 
and keep a low cost profile. But the commercial motivation was absent. 
Initially the banks expanded and by the end of year 1985 RRBS had opened 12606 branches. 
During this period their credit deposit Ratio (C.D.R) expanded very fast. In 1976 it was 165% and 
gradually declined to 104 % in December 1986. The Credit Deposit Ratio continuously declined 
thereafter. 
Later, the questions started being raised about the viability of these banks. The Khusrau 
Committee of 1989, noted that the weaknesses of RRBs are endemic to the system and non- 
viability is built into it, and the only option was to merge the RRBs with the sponsor banks. The 
objective of serving the weaker sections effectively could be achieved only by self-sustaining credit 
institutions. RRBs were finding themselves unable to sustain because of the mounting losses due to 
imprudent commercial policy. Thus, Khusrau Committee (aka Agricultural Credit. Review Committee) said that the RRBs have no justifiable cause for continuance and 
recommended their mergers with sponsor banks. 
But by that time, the branch network had expanded so large that it would be political unwise for 
the government to merge the RRBs with sponsor Banks. 
Recommendations of Narsimham Committee on RRBs 
The Narsimham Committee in 1990s also reiterated that the RRBs should be merged with the 
sponsor banks. By 1993, 172 of the 196 RRBs were recorded unprofitable. The paid up capital 
which was ` 25 Lakh at that time was not able to absorb the loan losses of most of the RRBs. The 
loan recovery was around 40%. The First Narasimham Committee recommended that the RRBs 
should also be permitted to engage in all types of banking business and should not be forced to 
restrict their operations to the target groups. The Narasimham committee also recommended 
that there should be mergers of the RRBs with their sponsor bank, BUT the “sponsor banks might 
decide whether to retain the identities of sponsored RRBs or to merge them with rural subsidiaries 
of commercial banks to be set up on the recommendation of the committee”. The first 
recommendation of letting the RRBs do all businesses was accepted by the government. 
Some measures were taken by the Reserve Bank of India also. It allowed the RRBs to relocate 
their branches if they were making losses at one location for more than 3 years. They were also 
allowed to finance the non-target groups to the extent not exceeding 40 percent of their 
incremental lending. This limit was subsequently enhanced to 60 percent in 1994. As a result, the 
RRBs diversified into a range of non-priority sector (NPS) advances, including jewel and deposit- 
linked loans, consumer loans and home loans 
Some efforts were done by NABARD with funding support of the Swiss Development Corporation 
(SDC). It took a number of HR and Organizational Development in these banks. 
Turnaround of RRBs 
The above discussion makes it clear that most RRB were making loss and had deviated from the 
original idea that had created them. But there were some profit making RRBs also. Some reforms 
led the rise in the number of the profit making RRBs but most of them were having a low credit 
deposit ratio. This was coupled with the decreasing percentage of loans to small and marginal 
farmers out of the total loans disbursed by the RRBs. The RRBs NPA level was high. In the early 
2000s there was no prescribed CRAR (capital to risk weighted asset ratio) for the RRBs. In 2005, 
based upon the recommendation of an internal working group the RRBs were asked to maintain a 
capital to risk weighted asset ratio at 5% and over the period of time they were expected to align 
themselves to Basel I standards. However, the major reform was to merge the RRBs with the 
sponsor banks.There were 196 RRBs sponsored by 27 SCBs and one State Cooperative Bank were operating in 
the country with a network of 14,484 branches spread over 523 districts as on March 31, 2005. 
The government started the process of consolidation and amalgamation in 2005, bringing the 
number down to 82 in 2010. 
As of March-end, 2011, the total number of RRBs stood at 82. This number fell to 64 in March 
2013. As of March 2014, the number of RRBs has been reduced to 57. After the 2014 elections, the 
new NDA government has put hold on further amalgamation of the Regional Rural Banks. The 
focus of the new government is to improve their performance and exploring new avenues of 
investments in the same. Currently, there is a bill pending to amend the RRB Act which aims at 
increasing the pool of investors to tap capital for RRBs. 
Regulation of RRBs 
Regional Rural Banks are regulated by National Bank for Agriculture and Rural Development 
(NABARD). Please note that currently seven states viz. Tripura, Nagaland, Manipur, Mizoram, 
Arunachal Pradesh Meghalaya and Puducherry, have state-level RRBs. Gujarat and Karnataka too 
have demanded formation of state level RRB. In case of West Bengal, the state Assembly took 
unanimous resolution in favour of State level RRB in the year 2004 sector reforms are one of the most important policy agenda of the authorities around
the world. There are several reasons for the same.
Firstly, the reforms are needed to increase the efficiency of financial resource mobilizations
and generate higher levels of growth.
Secondly, financial sector reforms are utmost necessary for the macro-economic stability.
India saw its worst economic crisis in the decade of 1980s.
In 1991, India embarked into an era of Economic Reforms which led to liberalization, privatization
and globalization of the Indian Economy. The financial sector reforms were an integral part to
these reforms. The financial sector reforms got momentum with the recommendations of various
committees such as Chakravarty Committee (1985), Vaghul Committee (1987) and most notably
by Narasimham Committee (1991), which is also known as first Narasimham Committee.
Importance of year 1991
Prior to 1991, India was more or less an isolated economy, loosely integrated with the economy of
rest of the world. The public sector was born out of a planned economy model, which was
underpinned by a Nehruvian-Fabian socialist philosophy. In 1991, India embarked on the path of
liberalization, privatization and globalization. This injected new energy into the slow growing Indian
Economy. With reference to Banking sector, it was in this year that the first Narasimham
Committee gave a blueprint of banking sector reforms. On the basis of these recommendations,
the government launched a comprehensive financial sector liberalization programme which
included interest rates liberalization, reduction of reserved rations, reduced government control in
banking operations and establishment of a market regulatory framework. Another outcome of
liberalization was the dismantling of prohibitions against foreign direct investment. Some more
outcomes of reforms that impacted the banking sector were:-
Steps were taken to move to a market determined exchange rate system, and a unified
exchange rate was achieved in the 1990s itself
The government also released a slew of norms pertaining to asset classification, income
recognitions, capital adequacy etc which the banks had to comply with
Current account convertibility was allowed for the Rupee in accordance with IMF conditions
Nationalized banks were allowed to raise funds from the capital markets to strengthen their
capital base
The lending rates for commercial banks was deregulated, thereby freeing them to lend more
or as they saw fit
Also, banks were allowed to fix their own interest rates on domestic term deposits that
matures within two years
Customers were encouraged to move away from physical cash, as RBI issued guidelines to
the banks pertaining to the issuance of debit cards and smart cards
The process of introducing computerization in all branches of banks began in 1993 in line
with the Committee on Computerization in Banks' recommendations, which had been submitted in 1989
FII (Foreign Institutional Investors) were allowed to invest in dated Government Securities
The Foreign Exchange Management Act (FEMA) was enacted in 1999 and effectively
repudiated the Foreign Exchange Regulation Act (FERA) of 1973. FEMA enabled the
development and maintenance of the Indian foreign exchange markets and facilitated
external trade and payments
The NSE (National Stock Exchange) began its operations in 1994
RBI began the practice of auctioning Treasury Bills spanning 14 days and 28 days
Capital index bonds were introduced in India for the first time. The newly adopted policy of
liberalization led the RBI to provide licenses to conduct banking operations to some private banks
such as ICICI Bank, HDFC Bank etc. The growth of industries and expansion of economic
operations also revitalized banking operations, which had to keep up with the demand for various
banking operations by the flourishing and even nascent enterprises.
Bankers also responded to the renewed demand from the industrial sector and regular customers.
New technology and customer-friendly measures were adopted by bankers to attract and retain
customers. The Banking Ombudsman was established, so that consumers could have a forum to
address their grievances against banks and the services they provided.Major Banking Reforms of 21st Century
India is one among the top 10 economies in the world. Banking sector in India is robust and forms
the most dominant segment of the financial sector. The banking industry acts as a pivot in the
economic development of the country. The face of the banking industry has been witnessing
changes over the years. The main objective of the financial sector reforms in India initiated in the
early 1990s was to create an efficient, competitive and stable financial sector that could then
contribute in greater measure to stimulate growth. For instance, the last decade witnessed the
embracement of ATM, internet and mobile banking.
Major Reforms of the Indian Banking Industry in 21
st century
Following are the major financial sector reforms in the recent years in India. All of the reforms are
aimed at creating efficient and stable financial sector which contributes in a major way to stimulate
growth.
Major reforms are:
The passage of Banking Laws (Amendment) Bill, 2011 has paved way for the entry of more
banks and foreign investments. The entry of new banks is expected to create competition
which will enable banks to improve their operational efficiency.
FDI ceiling for the banking sector got increased from 49% to 74%.
Liberal branch licensing policy has been adopted.
RBI has issued guidelines for priority sector lending certificates (PSLCs) to meet the priority
sector lending targets.
RBI has allowed the banks to hold additional reserves linked to property holdings, foreign
currency translation reserves and deferred tax assets by up to 35,000 crore (state-run
banks) and Rs 5,000 crore (privately owned banks) to increase their capital.
The scheduled commercial banks are permitted to grant non-fund based facilities including
partial credit enhancement (PEC) for those customers who do not possess any fund based
facility from any of the banks in India.
Ministry of Finance is planning to increase its capital support to the state-run banks by about
Rs 80,000-100,000 crore to boost their capital.
Under the Pradhan Mantri Jan Dhan Yojna (PMJDY) over 31 crores of bank accounts have
been opened by June 2018 as a part of financial inclusion campaign.
National Investment and Infrastructure Fund (NIIF) has been created in 2015 as a special
fund to deal with stressed assets of banks.
Challenges Ahead
The most prominent aftermath of the reforms is the increase in competition and impact on
profitability of banks. The challenge for banks now is to manage the narrowing down of the profit
margins while at the same time improving the productivity. Other challenges includes reinforcing
and adapting better technology to meet the customer needs, sharpening of management skills,
greater customer orientation, sharpening of risk management skills etc. With ever increasing competition, banks have to address the above issues if they need to survive in the changing
millennium.                                     Mega Bank Merger List 2020 : 10 PSU Merger into 4 Effective From 1st April 2020
The decision of the Central Government regarding the merger of 10 PSU banks into 4 becomes effective from 1st of April 2020. Let us go on to learn everything about the Bank Mergers List 2020 here in this article.
Mega Bank Merger List 2020
In a merger, there is an anchor bank and an amalgamating bank or banks, where the latter gets merged with the former.
(1) Mega Bank Merger List 2020
Read the Bank Merger List 2019-2020 below.
1. Punjab National Bank (PNB) will take over Oriental Bank of Commerce (OBC) and United Bank of India (UBI) to become the country's largest lender after State Bank of India (SBI) in terms of business.
2. Canara Bank will subsume Syndicate Bank;
3. Andhra Bank and Corporation Bank will merge with Union Bank of India; and 
4. Allahabad Bank will become part of Indian Bank.
With this, the number of public sector banks in India will come down to 12.
Six merged banks and six independent public sector banks.
1.1. Six Merged Banks are:
1. SBI (State Bank of India),
2. Bank of Baroda,
3. Punjab National Bank (PNB),
4. Canara Bank,
5. Union Bank of India,
6. Indian Bank
1.2. Six Independent Banks are: 
1. Indian Overseas Bank,
2. UCO Bank,
3. Bank of Maharashtra,
4. Punjab and Sind Bank,
5. Bank of India,
6. Central Bank of India.
This is an important development for the stressed and ailing Banking Sector of the country.
2. Brief about the Bank Merger List 2019-2020
Union Finance Minister Nirmala Sitharaman on 30th August 2019 had announced the consolidation of state-owned banks (PSBs) in which 10 PSBs being merged to form 4 bigger lenders to strengthen the Banking sector struggling with a bad-loan. The move was aimed at clean up of the Bank Balance Sheets and creating lenders of global scale that can support the economy's surge to $5 trillion by 2024. 
"Having done two rounds of bank consolidation earlier, this is what we want to do for a robust banking system and a $5-trillion economy. We are trying to build next-generation banks, big banks with the capacity to enhance credit," FM Sitharaman said. The key factors for the mergers were: Technological platformCustomer reachCultural similarities, and CompetitivenessFinance Secretary RajivKumar added.
Banks Ranked by Business size 1st- SBI 2nd-(PNB,OBC,United Bank) 3rd- HDFC 4th- Bank of Baroda 5th- (canra bank,Syndicate bank) 6th- (Union bank, Andra bank, Corporation bank)  7th- ICICI bank 8th- Axis bank 9th- Bank of India 10th- (Indian bank, Allahabad bank)   3. Reasons for Bank Merger
1. A key reason for the merger is the weight of mounting bad loans over the years.
2. Ostensibly aimed at improving operating efficiencygovernance and accountability and facilitate effective monitoring.
3. Creating globally stronger banks, doing away with needless overlaps in operations and infrastructure, and ushering in economies of scale to bring down costs have always been at the heart of any consolidation drive.
4. The move was aimed at creating next-generation banks with a strong national presence and global outreach accompanied with enhanced capacity to increase credit to the various important sectors of the economy.
4. Challenges to be Faced in Way of Merger
1. Managing Cultural Differences,
2. Managing Manpower 
3. Branch Rationalisation
4. Technological Integration 
5. Making Geographically Compatible Banks
5. Recapitalisation and Governance Reforms
1. The consolidation exercise will be accompanied by recapitalisation to the tune of Rs 55,000 crore (out of Rs 70,000 crore budgeted for 2019-20) capital infusion in public sector lenders as also governance reforms.
2. The biggest chunk of recapitalisation will go to PNB, at Rs 16,000 crore, followed by Union Bank at Rs 11,700 crore — the two anchor banks for the merger. Bank of Baroda is set to get Rs 7,000 crore as capital and Canara Bank Rs 6,500 crore.
3. Punjab and Sind Bank will get Rs 7,050 crore; Central Bank of India will get Rs 3,300 crore; UCO Bank will get Rs 2,100 crore, and Bank of Baroda will get Rs 600 crore.
As part of the governance reforms, Sitharaman said non-official directors at state-run lenders will have to function like independent directors on company boards. Boards will be peer-reviewed. The number of executive directors has been raised to four and boards have been given the mandate to reduce and rationalise board committees. Public sector banks will also be able to appoint a chief risk offer at market rates.
The decision to merge banks is a good remedial measure, but continued focus on corporate governance and adherence would be of prime importance. 
6. How the Financials of Merged Bank Entities will change? 
1. Among the four mergers, the combined entity of Allahabad Bank and Indian Bank will have the lowest net NPA (non-performing assets), while boasting the highest provisioning coverage and strongest CASA (current account and savings account) franchise.
2. "Indian Bank's merger with Allahabad Bank will help it emerge as a strong entity with reach, improving provisioning coverage ratio (PCR) and strong CASA ratio," suggests Bumb. The merged entity also has the least branch overlap. However, this diversity in cultures may prove challenging during integration and may also lend no major cost benefits from the merger.
3. Further, Indian Bank will see deterioration in its asset quality owing to Allahabad Bank's unhealthy loan book.
4. Greater synergies are likely to accrue from the merger of Syndicate Bank with CanaraBank as both have similar cultures and geographical presence. The merged entity will become the fourth-largest lender in the country, with better provisioning and capital ratios post-merger.
5. The combined entity of Union Bank will see improved provisioning and capital ratio after the merger with Andhra Bank and Corporation Bank. However, its asset quality position will take a hit, with the merged bank likely to report the highest gross NPA ratio among the four entities.
7. Effect on Customers of Banks
Retail customers of the amalgamating banks are likely to get directly affected whereas customers of the anchor bank are not likely to face much change. However, shareholders of all banks involved in the mergers are bound to be impacted.
8. Effect on Manpower Hiring
Reduction in fresh recruitment will be a natural consequence of any merger as the rationalisation of branches and staff will have to be worked out to optimise resources,'' a senior PNB official. It is likely to impact the overall job market scenario.
9. Core Banking Solutions of the Banks to be Merged
Public Sector Bank Rank by Size- (Punjab National Bank, Oriantal Bank of Commerce, United Bank of India)- 2nd Largest Bank  ( Canara  Bank,Syndicate bank)- 4th Largest Bank  (Union Bank,Andrea bank, Corporation bank)- 5th Largest Bank (Indian Bank, Allahabad bank)- 7th Largest Bank.             This was all from us in this blog of Bank Merger List 2020. We hope that you liked the information useful about the Bank Merger List 2020.

PM Scheme part-11 Sagar Mala Project, Bharat Mala Project,

 PM Scheme Part-11Sagar Mala project 
On 25 March 2015 Cabinet gave approval for this project to develop 12 ports of India and also 1208 Islands.
The project was launched by Ministry of Shipping (the nodal ministry for this initiative) in Karnataka on 31 July 2015 at Hotel Taj West End, Bangalore
Ministry: Ministry of Shipping
Maritime sector in India has been the backbone of the country’s trade and has grown manifold over the years. To harness India’s 7,500 km long coastline, 14,500 km of potentially navigable waterways and strategic location on key international maritime trade routes, the Government of India has embarked on the ambitious Sagarmala Programme which aims to promote port-led development in the country.
About Sagar Mala project
Sagar Mala project is a strategic and customer-oriented ₹8,000,000 million (US$120 billion or €110 billion) investment initiative of the Government of India entailing setting up of 6+ mega ports, modernization of several dozen more ports, development of 14+ Coastal Economic Zones and at least 29 Coastal Economic Units, development of mines, industrial corridors, rail, road and airport linkages with these water ports, resulting in US$110 billion export revenue growth, generation of 150,000 direct jobs and several times more indirect jobs. It aims to modernize India's Ports so that port-led development can be augmented and coastlines can be developed to contribute in India's growth. It also aims for "transforming the existing Ports into modern world class Ports and integrate the development of the Ports, the Industrial clusters and hinterland and efficient evacuation systems through road, rail, inland and coastal waterways resulting in Ports becoming the drivers of economic activity in coastal areas.
Concept and Objectives
Vision of the Sagarmala Programme (Figure) is to reduce logistics cost for EXIM and domestic trade with minimal infrastructure investment.
This includes:
Reducing cost of transporting domestic cargo through optimizing modal mix
Lowering logistics cost of bulk commodities by locating future industrial capacities near the coast
Improving export competitiveness by developing port proximate discrete manufacturing clusters
Optimizing time/cost of EXIM container movement
Components of Sagarmala Programme are:Port Modernization and New Port Development:
De-bottlenecking and capacity expansion of existing ports and development of new greenfield ports
Port Connectivity Enhancement:
Enhancing the connectivity of the ports to the hinterland, optimizing cost and time of cargo movement through multi-modal logistics solutions including domestic waterways (inland water transport and coastal shipping)
Port-linked Industrialization:
Developing port-proximate industrial clusters and Coastal Economic Zones to reduce logistics cost and time of EXIM and domestic cargo
Coastal Community Development:


  • Promoting sustainable development of coastal communities through skill development and livelihood generation activities, fisheries development, coastal tourism etc.


            Bharatmala Project
  • Established 31 July 2015
    The total investment for this plan is estimated at ₹5.35 trillion (US$83 billion)
    Ministry: Ministry of Road and Transport
    About Bharatmala project
    Bharatmala is the name given to a centrally-sponsored and funded road and highways project of the Government of India.The total investment for this plan is estimated at ₹5.35 trillion (US$83 billion), making it the single largest outlay for a government road construction scheme.
    The ambitious umbrella programme will subsume all existing highway projects including the flagship National Highways Development Project (NHDP), launched by the Atal Bihari Vajpayee government in 1998. 
    The project will start from Gujarat and Rajasthan, move to Punjab and then cover the entire string of Himalayan states - Jammu and Kashmir, Himachal Pradesh, Uttarakhand - and then portions of borders of Uttar Pradesh and Bihar alongside Terai, and move to West Bengal , Sikkim, Assam, Arunachal Pradesh, and right up to the Indo-Myanmar border in Manipur and Mizoram.Special emphasis will be given on providing connectivity to far-flung rural areas including the tribal and backward areas.
    Theme of Bharatmala Project
    The programme includes the Bharatmala scheme, under which 34,800 km of highways would be constructed at the cost of Rs 5.35 lakh crore, finance secretary Ashok Lavasa said. Under Bharatmala, the road transport and highways ministry will construct 9,000 km of economic corridors across the country.
    The project also entails constructing 6,000 km long inter corridor and feeder routes, 2,000 km of border and international connectivity roads, 5,000 km to be upgraded under the national corridor efficiency programme, 800 km of greenfield expressways, 10,000 km under the national highway development programme and 2,000 km of coastal and port connectivity roads.
    Finance
    The project would need an investment of around ₹535,000 crore (US$83 billion), of which ₹209,000 crore (US$33 billion) will be generated through market borrowings, ₹106,000 crore (US$17 billion) through private investments, and ₹219,000 crore (US$34 billion) shall be raised through the Central Road Fund (CRF) and tolls.

PM Scheme part-10 Deendayal Upadhyaya Grameen Kaushalya Yojana, Atal Pension Yojana,

PM Scheme Part-10 Deen Dayal Upadhyaya Grameen Kaushalya Yojana
Launched on 25th September 2014
To provide employment to youth residing inrural area.
Launched By Venkaiah Naidu and Nitin Gadkari
Occasion on launched day - 98 birth anniversary event of the legendary leader Deendayal Upadhyaya
Target Audience -Skill Development Program for Poor
About Deen Dayal Upadhyaya Grameen Kaushalya Yojana
The Ministry of Rural Development (MoRD) announced the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) Antyodaya Diwas, on 25th September 2014. DDU-GKY is a part of the National Rural Livelihood Mission (NRLM), tasked with the dual objectives of adding diversity to the incomes of rural poor families and cater to the career aspirations of rural youth.
DDU-GKY is uniquely focused on rural youth between the ages of 15 and 35 years from poor families. As a part of the Skill India campaign, it plays an instrumental role in supporting the social and economic programs of the government like the Make In India, Digital India, Smart Cities and Start-Up India, Stand-Up India campaigns. Over 180 million or 69% of the country’s youth population between the ages of 18 and 34 years, live in its rural areas. Of these, the bottom of the pyramid youth from poor families with no or marginal employment number about 55 million.
The Vision of DDU-GKY is to "Transform rural poor youth into an economically independent and globally relevant workforce". It aims to target youth, under the age group of 15–35 years. DDU-GKY is a part of the National Rural Livelihood Mission (NRLM), tasked with the dual objectives of adding diversity to the incomes of rural poor families and cater to the career aspirations of rural youth. A corpus of Rs 1,500 crore and is aimed at enhancing the employability of rural youth. Under this programme, disbursements would be made through a digital voucher directly into the student’s bank account as part of the government's skill development initiative.
Key features of the scheme Of Deen Dayal Upadhyaya Grameen Kaushalya Yojana
Training for the poor for free –
As per the guidelines of the scheme, the central government will provide the selected candidates with vocational training for making them capable of taking on various kinds of jobs. The trainings will be provided free of cost.
Including the minorities – 
Reservations have been made for including the people who belong to the backward classes and minority groups. The program has reserved 50% seats for the ST and SC candidates, 15% for the minority candidates and 33% for female candidates.
Importance on career progression –
Along with vocational training, the institutes will also assist the candidates to progress on the path of career progression. The institutes will assist in finding right jobs for the trained candidates both inside the country and outside. Job incentives will also be given.
Post- Placement assistance –
Apart from providing placement opportunities, the government will also assist in giving assistance after the placement has been finalized.
Expenditure on the trainees –
It has been estimated that the government will have to shell out anything between Rs. 25,696 to over Rs. 1 on every trainee.
Duration of the courses – 
All the training courses will range from a minimum of 3 months to a maximum of about 12 months. Any course that extends beyond the time frame will not be covered by the authority financially.
Standards-led Delivery –
The responsibility of checking the parameters and quality of the training, imparted to the people will be measured by institutes, which have been affiliated by the center. No local inspection will be allowed.
Providing regional focus – 
Though the scheme will be implemented in all parts of the country, special attention will be paid to the states like Jammu and Kashmir and other states or districts, which are suffering from massive backwardness.
Eligibility criteria of the scheme
People belonging to the poor families – 
As per the rules of the scheme, only those candidates will be able to participate under the scheme who belong to BPL category. Thus, the program will assist the poor youth in acquiring training and jobs after the completion of the training.
Age related criteria – 
It has been mentioned in the draft that only the youth will be able to participate in the scheme. The lower age limit has been fixed at 15 years while the upper age limit is 35 years. It is for the general caste but the upper age limit for the minorities, SC, ST, and physically disabled people has been fixed at 45 years.
Cast related criteria – 
The scheme will give preference to the people belonging to the SC, ST, OBC castes. The minority communities will also have representation along with the candidates who have physical disability. The reservation percentage will be decided by the respective authority.
Active bank account – 
As the stipend to the students and the grant to the associations providing the training will be provided through bank transactions, the presence of an active bank account for both parties must be present.
Fee and Stipend details of the scheme
Industrial interns – 
All candidates who are acquiring skill development training in the industries will be paid a stipend of Rs. 3000 on a monthly basis. The amount will be sent to the candidate through the bank account.
Additional allowance for day trainees –
All the trainees who have only opted for day training will be provided with an additional allowance of Rs. 50 on a daily basis. It will be given for meeting the food and transportation costs.
Grant for the institutes for normal trainees –
For the purpose of training and related progression, the PIAs will be given an amount of Rs. 5000 for every candidate who is getting the training. The grant will be given on the basis of trainees who secure a job that pays them a salary of Rs. 15,000.
Grant for live distance training –
In case the trainees are opting for live distance training, the government will pay the PIA a grant of Rs. 500 for every candidate.
Grant for counseling of candidates –
It might so happen that the candidate secure a job in other countries, after the completion of the training. For these candidates, the PIAs will have to hold counseling sessions. The institutes will get a grant of Rs. 10000 for every candidate getting the advising.
Grant for industrial trainees – 
All the candidates who are opting for training from the industrial sectors and also get boarding facilities will fetch the institutes an amount of Rs. 5000 as associated costs on a monthly basis. In addition to that a travel allowance of Rs. 4500 will be granted to the PIAs.
“Rashtriya Gram Swaraj Yojana has been designed for giving the power to Panchayat Raj. ”
Implementation process of the scheme
The implementation of the scheme will be done on a three tire basis. They are as under:
Project Funding Assistance –
All the training projects, which will be undertaken by the scheme, will require monetary assistance from the government. It is the responsibility of the authority to estimate the cost that will be incurred per person on the basis of training type and duration. All the institutes which have a high reputation and a grade of at least 3.5 will be able to apply for providing the training.
Training Requirements –
All the institutes providing the training will have to design the rules and regulations, which have been specified by the National Council for Vocational Training and Sector Skills Councils. The training will have to be related to around 250 sectors, which have been highlighted under the scheme. But the institutes will have to place at least 75% of the total number of candidates successfully. The courses must be associated with such trades and soft skill developments, which have a high demand and relevance in the current scenario.
Training Quality Assurance –
The requirement for the development of vocational skills and general education has been understood by the central government. Thus, they passed the National Policy on Skill Development in 2009. It is necessary that the evaluation of the viability of the scheme is done so that the candidates get employment after completing the training. The task of doing this evaluation is placed on the shoulders of National Skills Qualification Framework. The trainings will be compared with the international training standards with the institutes which have been affiliated by government bodies like NCVT or SSCs. 
ddugky Application Form And Registration Process
The process of applying under the scheme will have to be done online. The application form is available on the authorized website. 
The interested candidate will have to type in the name of the PIA under which he/she wants to acquire the vocational training. The particular filed marked as “Name” must be filled in this regard. The next field is marked as “Address” and here, the candidate will have to type in the official address. Next the candidate will have to type in the name of the stat from which he/she belongs, followed by the name of the district.
As the process will be done online and the details will be sent to the candidate via mail, he/she will have to type in the official mail ID in the next filed. Then, the candidate will have to provide details of any legal document that contains the personal identification details of the person. For this, the candidate will have to click on the drop down arrow and choose accordingly. Then the candidate will have to provide the contact details. Though providing the landline number is not mandatory, the candidate will must possess an active mobile phone. The mobile number is mandatory. The next section deals with the type of industry, where the candidate desires to join for attaining the skill development trainings. Clicking on the drop down arrow will activate the sectors and the person needs to choose accordingly.
The selection of the job role is must be done in the same manner. Then the candidate will have to attach a scanned copy of a photograph. It must be a passport sized photograph. The file format must be png, gif, jpg, or jpeg and the size of the file must not be more than 2MB. Then the candidate needs to type in the capcha code that is displayed at the end of the application form in its particular place. Once this has been done, the candidate needs to click on the button that has been marked as “Submit.”
With the successful implementation of the welfare program, the central government will be in a better position to meet the job related requirements of the youngsters of the country. The training will help the poor in making themselves suitable for meeting the requirements of the job sections.                                    Atal Pension Yojana
Launched Original launch in 2010-11. Relaunched on 9 May 2015; 2 years ago
It was Launched for unorganised sector‘s workers
Atal Pension Yojana
Atal Pension Yojana (previously known as Swavalamban Yojana) is a government-backed pension scheme in India targeted at the unorganised sector. It was originally mentioned in the 2015 Budget speech by Finance Minister Arun Jaitley in February 2015.It was formally launched by Prime Minister Narendra Modi on 9 May in Kolkata.As of May 2015, only 20% of India's population has any kind of pension scheme, this scheme aims to increase the number.
Eligibility to Avail Atal Pension Yojana
Anyone who is a citizen of India can is welcome to join this pension scheme. However, one should need to meet the following eligibility criteria set by the Government of India
The minimum age to be eligible is 18 years and must not exceed 40 years while applying.The person must have a Savings bank account in his/her name or he/she can opt to open a new one before applying to the scheme.The potential applicant must possess a mobile number which must be registered with the bank with full details.
The Government co-contribution is available to the subscribers who apply from 1st June, 2015 till 31st Dec., 2015. The Government is willing to support the workers who do not have any social security cover and not fall under the taxable income.
Overview
In Atal Pension Yojana, for every contribution made to the pension fund, The Central Government would also co-contribute 50% of the total contribution or ₹1,000 (US$16) per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years. The minimum age of joining APY is 18 years and maximum age is 40 years. The age of exit and start of pension would be 60 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.
Aadhaar would be the primary KYC document for identification of beneficiaries, spouse and nominees to avoid pension rights and entitlement related disputes in the long-term. For Address proof, individual may submit copy of ration card, copy of bank passbook is also accepted.
The subscribers are required to opt for a monthly pension from Rs. 1000 – Rs. 5000 and ensure payment of stipulated monthly contribution regularly. The subscribers can opt to decrease or increase pension amount during the course of accumulation phase, as per the available monthly pension amounts. However, the switching option shall be provided once in year during the month of April.
This scheme will be linked to the bank accounts opened under the Pradhan Mantri Jan Dhan Yojana scheme and the contributions will be deducted automatically. Most of these accounts had zero balance initially. The government aims to reduce the number of such zero balance accounts by using this and related schemes.
What is the due date for monthly contribution?
Your initial date of deposit will be considered as the due date for the payment of the contribution amount for the APY scheme. This pre-decided date is not flexible in any condition.
What will happen if required or sufficient amount is not maintained in the savings bank account for contribution on the due date?
The subscriber’s savings bank account needs to maintain a minimum balance on the specified date which is equal to the one month’s contribution amount. In case the amount found to be lower than the required, the account will be measured as default. Banks are given the authority of penalizing those account holders by charging fine on them. The fine amount can be anything between One Rupee to Ten Rupees as the details mentioned below:-
If the contribution amount is Rs. 100/- per month, the fine charged would be One rupee per monthFor contribution amount from Rs. 101 to 500/- per month, the Two rupees per month would be fined.For Rs. 501/- to 1000/- per month, there will be Rs. 5/- per month fine10 per month would be fined for the contribution above Rs. 1000/- per month
If for any reason, the payments get discontinued, the account would be frozen after the six months, deactivated after twelve months and would be completely closed after twenty four months.
Therefore, it is solely the subscriber’s headache to fund the account on the due date of contribution, to avoid penalties in the future.
How much pension will be received under Atal Pension Yojana?
The Indian Government has made it clear that the amounts of pension will range from 1 thousand to 5 thousand per month. The amount will be greatly influenced by the beneficiary’s monthly contribution to the scheme, which means the greater the contribution the more the amount of pension in future.
What is the benefit in joining Atal Pension Yoajna scheme?
Are you are wondering about the benefit of joining under this scheme? Then, you will be likely to get impressed with the Government co-contribution for the period of 5 years. The contribution amount will be either Rs. 1,000/- per annum or fifty percent of the total amount of contribution towards the scheme, whichever is lower. The account holders will benefit from this co-contribution from the financial year starting from 2015 and till 2019
Atal Pension Yojana Details
1.Type of scheme Pension scheme (Under the PFRDA)
2.Date of effect of scheme - 1st June, 2015
3.Age for eligibility to join -18 years to 40 years
4.Time of maturity of pension scheme - When the beneficiary attains 60 years of age
5.Targeted group of beneficiaries- Employees of unorganized sectors, farmers, backward masses, women, SC/ST etc.
6.Inclusion of members of Swavalamban Yojana NPS Lite-Automatic inclusion
7.Pension amount options Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000 and Rs. 5,000
8.Government’s contribution to the scheme - 50 per cent of beneficiary’s contribution or Rs. 1,000 per year for 5 years
9.Eligibility to get Govt. contribution- Must be non tax payer and must join APY before Dec. 2015
10.Mode of monthly payment to APY account - Auto debit process from the bank account linked with APY account
11.Where to apply for the APY scheme? -All nationalized banks
12.Nomination facility - Available
13.Non payment for 6 months - Account frozen
14.Non payment for 12 months - Account deactivated
15.Non payment for 24 months - Account permanently closed
16.Premature exit from scheme - Yes you can now do a premature exist. Will have to pay some fine. Fine amount is yest not clear.
17.Total number of APY accounts opened so far - 2,405,268 (As on 16th April 2016).                          PM Scheme part-11 Sagar Mala Project, Bharat Mala Project,please click here