Module Scope
- Does the organisation maintain the regulatory standing, ownership structure and governance arrangements necessary to conduct its banking activities in India?
- Does the organisation remain financially sound, operationally resilient and capable of protecting its customers and depositors?
- Does the organisation conduct its lending, payment, digital banking and cross-border activities within the applicable regulatory boundaries?
- Does the organisation meet the additional responsibilities applicable to its IFSC Banking Unit activities in GIFT IFSC?
Module Application
The Indian Banking & Lending module addresses the regulatory responsibilities of commercial banks operating in India. It covers the principal requirements associated with establishing and conducting banking business, maintaining financial and operational soundness, dealing with customers and depositors, providing credit and payment services, undertaking foreign-exchange activities and operating through an IFSC Banking Unit in GIFT IFSC.
The module reflects the banking, prudential, conduct and supervisory framework administered by the Reserve Bank of India. It also addresses the foreign-exchange framework applicable to commercial banks acting as authorised dealers and the additional IFSCA banking framework applicable to IFSC Banking Units operating in GIFT IFSC.
The Indian Banking & Lending module provides information to organisations about how to comply with legal responsibilities when dealing with the following:
- banking authorisations, ownership structures, governance arrangements and permitted business activities;
- internal control functions, assurance arrangements, third-party oversight and regulatory supervision;
- fraud risk, cybersecurity, operational resilience and AML/KYC responsibilities;
- capital adequacy, liquidity, statutory reserves and other prudential safeguards;
- deposit products, customer accounts, depositor protection, cash services, complaints and distribution channels;
- credit origination, assessment, pricing, borrower conduct and digital lending;
- priority-sector and MSME lending requirements;
- loan transfers, securitisation and factoring activities;
- credit-quality assessment, credit-information reporting, income recognition, asset classification and provisioning;
- stressed-credit resolution, enforcement of security interests, defaulter reporting, debt recovery and insolvency matters;
- payment systems, cards, digital banking channels and prepaid instruments;
- foreign-exchange transactions, cross-border banking and regulatory reporting; and
- banking activities conducted through an IFSC Banking Unit in GIFT IFSC.
The Indian Banking & Lending module also comprehensively covers requirements arising under:
- the Reserve Bank of India’s banking, prudential, supervisory and customer-protection framework;
- the foreign-exchange framework applicable to authorised dealers; and
- the IFSCA banking framework applicable to IFSC Banking Units in GIFT IFSC.
The module should be subscribed to by any organisation that:
- conducts commercial banking activities in India;
- accepts deposits, maintains customer accounts or provides cash and payment services;
- provides lending or credit facilities, including digital, priority-sector or MSME lending;
- undertakes loan transfers, securitisation or factoring activities;
- operates payment systems, cards, digital channels or prepaid instruments;
- acts as an authorised dealer for foreign-exchange or cross-border banking activities; or
- operates an IFSC Banking Unit in GIFT IFSC.
The specific questions and answers covered by the module include:
- How to maintain the authorisations, ownership arrangements and governance framework required to conduct banking business.
- How to remain within the permitted scope of banking and financial activities.
- How to establish effective control, assurance, third-party oversight and supervisory cooperation arrangements.
- How to manage fraud, cybersecurity, operational resilience and AML/KYC responsibilities.
- How to maintain adequate capital, liquidity, statutory reserves and other prudential safeguards.
- How to administer deposits and customer accounts while protecting depositors and addressing customer complaints.
- How to provide cash, payment and distribution services in accordance with applicable requirements.
- How to govern credit origination, borrower assessment, loan pricing and borrower conduct.
- How to comply with digital-lending, product-specific lending, priority-sector and MSME lending requirements.
- How to manage loan transfers, securitisation and factoring activities.
- How to assess credit quality, report credit information and classify and provide for impaired assets.
- How to resolve stressed credit, enforce security interests and address wilful and large defaulters.
- How to perform the organisation’s responsibilities as a financial creditor in debt-recovery and insolvency matters.
- How to operate payment systems, cards, digital channels and prepaid instruments within applicable requirements.
- How to conduct authorised foreign-exchange and cross-border banking activities and meet associated reporting responsibilities.
- How to comply with the additional governance, prudential, customer-protection, financial-crime, technology, payment and contractual requirements applicable to an IFSC Banking Unit.
The module covers the banking compliance lifecycle from authorisation, ownership and governance through ongoing prudential management, customer and depositor protection, credit administration, payment services and foreign-exchange activities. It also addresses the identification and management of fraud, cybersecurity threats, impaired credit and stressed assets, together with the recovery and resolution responsibilities that arise when banking exposures deteriorate.
The purpose of the Indian Banking & Lending module is to provide commercial banks with a structured understanding of the regulatory responsibilities applicable to their activities in India and, where relevant, to their operations through an IFSC Banking Unit in GIFT IFSC.