In April 2025, RBI issued major circulars impacting financial inclusion, governance, credit norms, housing finance, NBFC lending, interest rates, and currency handling. These updates are vital for exams like RBI Grade B, NABARD, UPSC, and banking recruitment tests. The changes combine policy updates with operational rules, making them important for both MCQs and descriptive answers.
Financial Inclusion and Livelihood Support
SHG-Bank Linkage Programme
- Banks must meet full credit needs of SHG members: income generation, social needs (housing, education, marriage), and debt-swapping.
- SHG lending must be integrated into branch, block, district, and state credit plans.
- Loans may be linked to savings in a 1:1 to 1:4 ratio; matured SHGs can get higher multiples.
- All loans to SHGs fall under Priority Sector Lending (PSL).
- Defaults by a few members should not stop group financing if the SHG is not in default.
DAY-NRLM Guidelines
- Focuses on women-led SHGs with 10–20 members (minimum 5 in special cases).
- Revolving Fund: ₹20,000–₹30,000 for eligible SHGs; no capital subsidies.
- Interest subvention available on loans; CCL and term loan limits linked to SHG corpus.
- Beneficiary composition: 50% SC/ST, 15% minorities, 3% disabled persons.
Governance in Urban Co-operative Banks
- Boards must have at least two professional directors.
- UCBs with assets ≥ ₹5000 crore must set up a Risk Management Committee.
- One reserved seat for women shareholders on the Board.
- Donations to institutions linked to directors or relatives are prohibited, even within permissible limits.
Lead Bank Scheme and Financial Access
- Continues to coordinate rural banking since its launch in 1969.
- Forums include Block Level Bankers’ Committee (BLBC), District Consultative Committee (DCC), and State Level Bankers’ Committee (SLBC).
- Target: universal financial access to all villages within 5 km radius or hamlets with 500 households in hilly areas.
- Plan to open branches in villages with population above 5000 lacking a scheduled commercial bank.
Housing Finance Norms
- For loans up to ₹30 lakh: LTV ≤ 80% → Risk Weight = 35%.
- For ₹30–₹75 lakh: LTV ≤ 80% → Risk Weight = 35%.
- For above ₹75 lakh: LTV ≤ 75% → Risk Weight = 50%.
- Max repayment period: 20 years, including moratorium.
- Additional finance for repairs allowed based on certified cost estimates.
- Aggregate exposure cap on residential mortgages and real estate lending for UCBs.
Credit to NBFCs
- Ceiling on bank credit linked to NBFCs’ Net Owned Fund removed for registered NBFCs engaged in lending, leasing, and investment.
- Prohibited: IPO funding, inter-corporate deposits, and bridge loans.
- Gold-backed NBFCs remain under stricter prudential exposure norms.
Currency Management and Penalties
- Delayed transaction reporting by currency chests: penal interest = Bank Rate + 2%.
- Wrong reporting: flat ₹50,000 fine.
Counterfeit notes:
- ≥5 pieces in one transaction → immediate police report.
- Penalties up to 200% of notional value for higher denominations.
- Notes with political/religious slogans or deliberate damage are not legal tender.
- Free exchange of soiled notes allowed up to 20 pieces/₹5000 per day over the counter.
Interest Rates on Deposits
- Uniform interest rates across all branches; no individual negotiation.
- Senior citizens: up to +1% interest; staff: +1% extra.
- Minimum tenure: 7 days for domestic deposits; 1 year for NRE deposits.
- FCNR(B) deposits: 1–5 years, interest ceilings linked to Overnight ARR + spread.
- Prohibited: lotteries, gifts over ₹250, and advances against deposits of other banks.