What changed
This master circular updates the previous July 2012 version by incorporating all instructions issued up to June 30, 2013. It consolidates multiple circulars into one document for easier reference. The structure and key provisions remain largely unchanged, but the circular now reflects the latest regulatory updates.
What it means for you
Banks must refer to this single master circular for all para-banking activity guidelines, ensuring compliance with updated rules. It streamlines regulatory oversight and reduces ambiguity. Banks need to align their internal policies with this consolidated framework to avoid regulatory gaps.
What you must do
- Review the updated master circular and compare with your bank's current para-banking policies.
- Ensure all para-banking activities (subsidiaries, insurance, mutual funds, etc.) comply with the consolidated guidelines.
- Update internal training materials and compliance checklists to reflect the July 2013 circular.
- Monitor any subsequent circulars that may amend or add to this master circular.
Who it affects
All scheduled commercial banks (excluding RRBs), Bank subsidiaries and affiliates engaged in para-banking activities, Compliance and risk management teams, Business heads of insurance, mutual fund, and other para-banking divisions
Does this master circular apply to Regional Rural Banks (RRBs)?
No, the circular explicitly excludes RRBs from its scope.
What activities are covered under para-banking?
It covers financial services like equipment leasing, hire purchase, factoring, insurance, mutual funds, pension fund management, underwriting, and more, but excludes credit/debit/prepaid cards.
Is this a new regulation or just a consolidation?
It is a consolidation of existing instructions issued up to June 30, 2013, not a new regulation. Banks should already be compliant with the underlying circulars.