CAPITAL NEEDS OF ARC ENHANCED TO `300 CRORE RBI bars Kotak Mahindra Bank online onboarding
To ensure prudent and efficient functioning of ARCS, the Reserve Bank of India on Wednesday increased the minimum capital requirement for asset reconstruction companies (ARCS) to commence business to `300 cr from the earlier `100 cr.
Under the new directives, ARCS, as of October 11, 2022, have been granted a transition period to achieve the revised minimum net owned fund (NOF) requirement. They are expected to hit the `300-cr mark by March 2026.
The guidelines allow ARCS to deploy surplus funds available in instruments like money market, mutual funds, certificates of deposit, corporate bonds and commercial papers which have a short-term rating equivalent to the long-term rating of AA- or above by a credit ratings agency. flourishing - REITS and Invits have mobilised `1.3 lakh crore since 2019-20 (up to March 2024),” said an article on ‘State of Economy’ published in the RBI’S April Bulletin.
March witnessed the listing of an INVIT, which raised `2,500 crore through a public issue, attracting substantial interest
The Reserve Bank of India (RBI) on Wednesday barred private lender Kotak Mahindra Bank from onboarding new customers through its online and mobile banking channels and issuing fresh credit cards.
The bank, however, continue to provide services to its existing customers, including its credit card customers.
The central bank said that its actions were necessitated as the private lender was found deficient in its IT risk and information security governance. It said that Kotak Bank repeatedly failed to address the concerns
from foreign investors.
The article noted that market regulator Sebi has reduced minimum investment size and trading lot, enabling greater retail participation in these hybrid instruments. To further develop this space, Sebi notified regulations for small and medium REITS.
“This is expected to facilitate
— PTI business continuity and disaster recovery rigour and drill.
Similarly, during the subsequent assessments, the regulator said that the lender was “significantly non-compliant” with the corrective action plans for 2022 and 2023, as the compliances submitted by Kotak Bank were found to be either “inadequate, incorrect or not sustained”.
“The Bank has taken measures for adoption of new technologies to strengthen its IT systems and will continue to work with RBI to resolve balance issues. We want to reassure our existing customers of uninterrupted services,” said Kotak Bank in a statement.