Banker has to give options to select which network card the customer wants - RBI

The Reserve Bank of India released a circular at the public interest regarding the card issuer networks and their agreements with the bakers.

1. The authorised card networks tie-up with banks / non-banks for issuance of debit / credit / prepaid cards. The choice of affiliated network for a card issued to a customer is decided by the card issuer and is linked to the arrangements that the card issuers have with card networks in terms of their bilateral agreements.

2. On a review, it is observed that arrangements existing between card networks and card issuers (banks and non-banks) are not conducive to the availability of choice for customers.

3. In exercise of the powers conferred under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), the RBI being satisfied that it is necessary and expedient, in the interest of payment system and public interest, to do so, hereby, directs as under:

1. Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks.

2. Card issuers shall issue cards across more than one card network.

3. Card issuers shall provide an option to their eligible customers to choose any one among the multiple card networks. This option may be exercised by customers either at the time of issue or at any subsequent time.

   These shall be effective from October 01, 2023.

4. Card issuers and card networks shall ensure to adhere to the above requirements in:

1. existing agreements at the time of amendment or renewal thereof, and

2. fresh agreements executed from the date of this circular.

   RBI invites comments on draft circular on Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards

   The Reserve Bank of India has today placed on its website the draft circular on Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards for feedback from stakeholders. Comments / Feedback, if any, may be sent by email to dpssfeedback@rbi.org.in, or by post to the Chief General Manager-in-Charge, Department of Payment and Settlement Systems, Central Office, Reserve Bank of India, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Mumbai - 400 001, on or before August 4, 2023.

   2. The draft circular mandates card issuers (banks / non-banks) to issue cards on more than one card-network along with providing customers the facility to choose any one among the multiple card networks. It also restrains card issuers from entering into agreements that limit their ability to tie-up with other card-networks.

    

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Update on Withdrawal of ₹2000 Denomination Banknotes - RBI

The Reserve Bank of India had announced the withdrawal of ₹2000 banknotes from circulation vide Press Release 2023-2024/257 dated May 19, 2023. The total value of ₹2000 banknotes in circulation, which amounted to ₹3.62 lakh crore on March 31, 2023 had declined to ₹3.56 lakh crore as at the close of business on May 19, 2023.

According to the data received from the banks, the total value of ₹2000 banknotes received back from circulation after the announcement on May 19 is ₹2.72 lakh crore up to June 30, 2023. Consequently, ₹2000 banknotes in circulation as at the close of business on June 30 stood at ₹0.84 lakh crore. Thus, 76% of the ₹2000 banknotes in circulation as on May 19, 2023 have since been returned.

Data collected from major banks indicates that out of the total banknotes in ₹2000 denomination received back from circulation, about 87% is in the form of deposits and the remaining around 13% has been exchanged into other denomination banknotes.

Members of the public are requested to utilise the next three months to deposit and/or exchange the ₹2000 banknotes held with them to avoid any rush in the last few days before September 30, 2023.

 

₹2000 Denomination Banknotes – Withdrawal from Circulation; Will continue as Legal Tender

The ₹2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all ₹500 and ₹1000 banknotes in circulation at that time. The objective of introducing ₹2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of ₹2000 banknotes was stopped in 2018-19.

2. About 89% of the ₹2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. The total value of these banknotes in circulation has declined from ₹6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to ₹3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023. It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public.

3. In view of the above, and in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the ₹2000 denomination banknotes from circulation.

4. The banknotes in ₹2000 denomination will continue to be legal tender.

5. It may be noted that RBI had undertaken a similar withdrawal of notes from circulation in 2013-2014.

6. Accordingly, members of the public may deposit ₹2000 banknotes into their bank accounts and/or exchange them into banknotes of other denominations at any bank branch. Deposit into bank accounts can be made in the usual manner, that is, without restrictions and subject to extant instructions and other applicable statutory provisions.

7. In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of ₹2000 banknotes into banknotes of other denominations can be made upto a limit of ₹20,000/- at a time at any bank starting from May 23, 2023.

8. To complete the exercise in a time-bound manner and to provide adequate time to the members of public, all banks shall provide deposit and/or exchange facility for ₹2000 banknotes until September 30, 2023. Separate guidelines have been issued to the banks.

9. The facility for exchange of ₹2000 banknotes upto the limit of ₹20,000/- at a time shall also be provided at the 19 Regional Offices (ROs) of RBI having Issue Departments¹ from May 23, 2023.

10. The Reserve Bank of India has advised banks to stop issuing ₹2000 denomination banknotes with immediate effect.

11. Members of the public are encouraged to utilise the time up to September 30, 2023 to deposit and/or exchange the ₹2000 banknotes. A document on Frequently Asked Questions (FAQs) in the matter has been hosted on the RBI website for information and convenience of the public.

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Sectoral Deployment of Bank Credit – May 2023

• Credit growth to agriculture and allied activities accelerated to 16.0 per cent (y-o-y) in May 2023 from 11.7 per cent a year ago.
• Credit to industry registered a growth of 6.0 per cent (y-o-y) in May 2023 as compared with 8.8 per cent in May 2022. Size-wise, credit growth to large industry was 3.9 per cent (2.1 per cent a year ago). Credit to medium industries grew by 18.9 per cent (42.9 per cent last year) and micro and small industries by 9.5 per cent (32.7 per cent a year ago).
• Among major industries, credit growth (y-o-y) accelerated in May 2023 for ‘basic metal & metal products’, ‘beverage & tobacco’, ‘construction’ and ‘textiles’ as compared with the corresponding month of the previous year. Credit growth decelerated for ‘chemicals & chemical products’, ‘food processing’ and ‘infrastructure’.
• Credit growth to services sector accelerated to 21.4 per cent (y-o-y) in May 2023 from 12.7 per cent a year ago, primarily due to the improved credit offtake to ‘Non-Banking Financial Companies (NBFCs)’ and ‘trade’.
• Personal loans expanded by 19.2 per cent (y-o-y) in May 2023 vis-à-vis 16.3 per cent a year ago, mainly driven by ‘housing’ and ‘vehicle loans’.

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SENCO GOLD LIMITED filed Red Herring prospectus with ROC for Public issue

SENCO GOLD LIMITED is the largest organised jewellery retail player in the eastern region of India based on number of stores and among eastern India based jewellery retailers, they have the widest geographical footprint in non-eastern states (Source: CRISIL Report). We primarily sell gold and diamond jewellery and also sell jewellery made of silver, platinum and precious and semi-precious stones and other metals. their products are sold under the “Senco Gold & Diamonds” tradename, through multiple channels, including Showrooms and online platforms.The Promoters of the Company are Suvankar Sen, Jai Hanuman Shri Siddhivinayak Trust and Om Gaan Ganpataye Bajrangbali Trust.

Offer Size

Offer of Equity Shares Up to Equity Shares, aggregating up to ₹ 4,050.00 million

of which

-          Fresh Issue(1) Up to Equity Shares, aggregating up to ₹ 2,700.00 million

-          Offer for Sale(2) Up to Equity Shares, aggregating up to ₹ 1,350.00 million by SAIF

Partners India IV Limited (the Selling Shareholder)

Summary of Restated Consolidated Financial Information:

A summary of the financial information of our Company as per the Restated Consolidated Financial Information is as follows

Internal risk factors

1.      The company face significant competition in the Indian jewellery market, they risk losing substantial portion of our customers and our market share which will adversely affect our business, financial condition, results of operations and prospects.

2.      The Company requires significant amounts of working capital for continued growth. their inability to meet our working capital requirements, on commercially acceptable terms, may have an adverse impact on their business, financial condition and results of operations.

3.      they require certain approvals, permits and licenses in the ordinary course of business, and any failure or delay to obtain or renew them or to comply with their conditions in the future may adversely affect their operations

4.      The use of the words “Senco” in the corporate and trading names by certain third parties who have the right to use those words in their names may lead consumers to confuse them with the Company and if they experience any negative publicity, it could have an adverse effect on our business, results of operations and financial condition. This confusion might also lead to the Company losing business to such competitors and might adversely affect our goodwill.

5.      The company have been subject to a ‘search and seizure’ operation by the income-tax department in the past, which has resulted in taxation and criminal proceedings being initiated against our Company and our Individual Promoter. It  have also been subject to an on spot search from the Directorate General of Central Excise Intelligence, Kolkata along with show cause notice. Further, a search has been conducted by the customs department at the Registered and Corporate Office in relation to an investigation against one of the companies Job Worker and vendor and a spot summons was issued to the Company. Any adverse outcome of such proceedings might have an adverse effect on our business, financial condition and results of operation.

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