RBI’s New Guidelines: Closure of Dormant, Inactive, and Zero Balance Accounts
Current Context: RBI’s New Guidelines: Closure of Dormant, Inactive, and Zero Balance Accounts.Here’s a breakdown of the key points:
- Dormant Accounts: These are accounts that have had no activity for over two years. They will be closed under the new guidelines.
- Inactive Accounts: Accounts with no activity for over 12 months will also be subject to closure.
- Zero Balance Accounts: Accounts that have no balance will be closed to enhance banking security.
- Reactivation: Account holders can reactivate their accounts by updating their Know Your Customer (KYC) details and making regular transactions.
The market cap deadline for UPI apps has been extended by NPCI for a further two years
Current Context: The National Payments Corporation of India (NPCI) has extended the deadline for implementing the 30% market share cap on Unified Payments Interface (UPI) apps by two years, until December 31, 2026.sKey Points
- Market Share Cap: Limits any single UPI app to 30% of the total UPI transaction volume.
- Initial Deadline: Originally set for December 31, 2024.
- Extension: Now extended to December 31, 2026.
- Reason: Allows major players like PhonePe and Google Pay more time to comply, ensuring a smooth transition and continued growth of the UPI ecosystem.
Revised norms for deposit-taking housing finance companies (HFCs)
Current Context: The Reserve Bank of India (RBI) has revised the norms for deposit-taking housing finance companies (HFCs), and these changes came into effect on January 1, 2025.
Here are the important highlights:
- Increased Liquid Asset Requirements: HFCs must maintain liquid assets equivalent to 14% of their outstanding deposits starting January 1, 2025, increasing to 15% by July 1, 2025.
- Unencumbered Approved Securities: At least 8% of public deposits must be held in unencumbered approved securities, rising to 10% by July 1, 2025.
- Harmonization with NBFCs: The new norms align HFCs' regulations with non-banking financial companies (NBFCs), including reducing the ceiling for public deposits to 1.5 times of net owned funds (from 3.0 times earlier) and limiting the maximum tenure of deposits to 60 months (from 120 months earlier).
- Financial Stability: These changes aim to enhance financial stability, safeguard depositors' interests, and ensure HFCs can handle liquidity pressures effectively.
This digest is not complete. Read the complete digest on the Financial Awareness Course.
