Know Your Compliance!
and other relevant regulatory updates
July 30, 2024
New RBI Guidelines on Wilful Defaulters and Large Defaulters
lenders must implement enhanced preventive measures:
- Conduct regular inspections of borrowers' assets charged as security
- Strengthen credit risk management systems and internal controls
- Reduce reliance on Chartered Accountant certificates alone
These measures aim to ensure proper end-use of funds and improve loan portfolio quality.
July 15, 2024
Enhanced Fraud Risk Management for Commercial Banks
banks must establish:
- A dedicated Data Analytics and Market Intelligence Unit
- Upgraded Early Warning Signal (EWS) systems within six months
These initiatives will facilitate early detection and prevention of potential fraudulent activities.
May 29, 2024
Supervisory Action: ECL Finance and Edelweiss ARC
the RBI has directed:
- ECL Finance Ltd to cease structured transactions for wholesale exposures
- Edelweiss ARC to stop acquiring financial assets and reorganising existing Security Receipts
This action follows supervisory observations including incorrect reporting and non-compliance with various norms
July 1, 2015
Master Circular- Loans and Advances – Statutory and Other Restrictions
RBI’s consolidated instructions/ guidelines including restrictions on Lending under Consortium Arrangement/ Multiple Banking Arrangement:
- Strengthen information back-up about the borrowers enjoying credit facilities from multiple banks, including details of creation/modification/satisfaction of charges on the assets of the company
- Exchange information about the conduct of borrowers' accounts with other banks
This action follows the Central Vigilance Commission expressing concerns in the light of frauds involving consortium/ multiple banking arrangements and attributing these incidents mainly to the lack of effective sharing of information about the borrowers among various banks.
Stay informed about these regulatory changes to ensure compliance and mitigate risks in your financial operations!