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RBI Streamlines the Procedure for Banks and NBFCs to File Supervisory Returns

On August 10, 2023, the Reserve Bank of India (RBI) issued a Statement on Developmental and Regulatory Policies, with respect to (i) Regulatory framework for Financial Benchmark Administrators; (ii) Regulation and Supervision of Infrastructure Debt Funds (IDFs) and Interest Rate Reset of Equated Monthly Installments (EMI); (iii) Conversational and Small UPI Payments; (iv) Public Tech Platform by the Reserve Bank Innovation Hub (RBIH) to enhance credit delivery by improving data flow among lenders using open APIs and standards.

These guidelines mandated all Supervised Entities (SEs) to submit specific supervisory returns to the Reserve Bank in accordance with its directives. In response to this, the RBI on February 27, 2024, issued a Master Direction (MD), vide notification RBI/DoS.DSG/2023-24/110, DoS.DSG.No.10/33.01.001/2023-24 consolidating the instructions for submission of Supervisory Returns, including timelines for filing of returns.

It is applicable to all Commercial Banks excluding Regional Rural Banks but including Public Sector Banks, Private Sector Banks, Small Finance Banks, Payment Banks, and Foreign Banks, all Primary (Urban) Co-operative Banks (UCBs), select All India Financial Institutions (AIFI) i.e., Export-Import Bank of India (EXIM) Bank, National Bank for Agriculture and Rural Development (NABARD), National Housing Bank (NHB), Small Industries Development Bank of India (SIDBI) and National Bank for Financing Infrastructure and Development (NaBFID) and all Non-Banking Financial Companies (excluding HFCs), and Asset Reconstruction Companies (ARCs)

The directions eliminate outdated instructions and combine twenty existing instructions, including a Master Direction for Non-Banking Financial Companies and are effective February 27, 2024. The directions also defined supervisory returns as encompassing all periodic or ad-hoc information submitted to RBI in the specified formats, regardless of the technology used, frequency, or method of submission.

Commercial banks are mandated to file thirty-six returns, including on Asset Liability and Off-Balance Sheet Exposures, asset quality, liquidity return, Interest Rate Sensitivity, Large Credits, Red Flagged Account/Fraud Borrowers, Defaulted Borrowers, Ownership and Control, Connected Exposure, financial conglomerates, and Stressed MSME Sub-ordinate Debt Scheme. All India Financial Institutions (AIFI) are required to file ten returns, Urban Co-operative Banks (UCBs) are required to file twenty returns and Non-Banking Financial Corporations (NBFCs) are required to file twelve returns.

Public Sector Banks must provide half-yearly and quarterly reviews of accounts within 21 days of receiving the Statutory Central Auditor (SCA) report. In the past, banks were able to submit the reviews as soon as they were received from the SCA. In addition, the RBI has now demanded lenders submit interest rate sensitivity returns within 15 days for all months, instead of the previous requirement of quarterly returns within 21 days.

The deadline for submitting audited returns for commercial banks has been shortened from seven days to five working days from the date of signing of the auditor’s report as per Section 134 of the Companies Act, 2013. PSBs must update the allocated branches online within one month of the appointment of SBAs. The RBI has instructed regulated entities to submit a Balance Sheet Analysis (BSA) – Annual Return within five working days from the date of signing of the auditor’s report. All commercial banks must submit the Interest Rate Sensitivity (IRS) return for each month within 15 days.

The instructions also mentioned that Asset/Liability Management (ALM) 2 and ALM 3 (fortnightly) returns should be submitted within seven days from the Reference date for urban co-operative banks (UCBs).