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RBI and Nepal Rastra Bank to integrate their respective

fast payment systems

RBI and Nepal Rastra Bank signed and exchanged Terms of

Reference for integration of fast payment systems of India and
Nepal, viz., Unified Payments Interface (UPI) of India and
National Payments Interface (NPI) of Nepal, respectively.

The integration is aimed at facilitating cross-border remittances

between India and Nepal by enabling users of the two systems
to make instant, low-cost fund transfers.
 Highlights

The collaboration between India and Nepal in linking their fast payment
systems through the UPI-NPI linkage will further deepen financial
connectivity and reinforce the enduring historical, cultural, and
economic ties between the two countries.

Based on the Terms of Reference exchanged between RBI and NRB, the
necessary systems will be put in place for interlinking of UPI and NPI.

The formal launch of the linkage i.e., commencement of operations will

be done at a later date.
 Review of Fixed Remuneration granted to Non-
Executive Directors (NEDs)

In a bid to enable banks to sufficiently attract qualified competent

individuals on their Boards, the RBI has revised upwards the ceiling
in respect of remuneration of Non-Executive Directors (NEDs), other
than the Chair of the Board, to ₹30 lakh per annum from ₹20 lakh.
Background
 Guidelines for NEDs

The upper age limit for NEDs shall be 75 years and after attaining the age of 75 years no person can
continue in these positions.

The total tenure of an NED, continuously or otherwise, on the board of a bank, shall not exceed
eight years. After completing eight years on the board of a bank the person may be considered for
re-appointment only after a minimum gap of three years. This will not preclude him/her from being
appointed as a director in another bank subject to meeting the requirements.

In addition to sitting fees and expenses related to attending meetings of the board and its
committees as per extant statutory norms/ practices, the bank may provide for payment of
compensation to NEDs in the form of a fixed remuneration commensurate with an individual
director’s responsibilities and demands on time and which are considered sufficient to attract
qualified competent individuals.

However, such fixed remuneration for an NED, other than the Chair of the board, shall not exceed
₹20 lakh per annum.
 Update for NEDs

Considering the crucial role of NEDs in efficient functioning of bank Boards and its various
Committees and in order to further enable the banks to sufficiently attract qualified competent
individuals on their Boards, it has been decided to revise the ceiling to ₹30 lakh per annum.

The banks are required to have suitable criteria for granting fixed remuneration to its NEDs, with
the approval of its Board before any review of the extant remuneration. The Board of the bank may
fix a lower amount within the ceiling limit of ₹30 lakh per annum depending upon the size of the
bank, experience of the NED and other relevant factors.

The instructions would be applicable to all the Private Sector Banks including Small Finance Banks
(SFBs) and Payment Banks (PBs) as also the wholly owned subsidiaries of Foreign Banks. The
instructions would come into force with immediate effect.
 MCQs for Practice

Q1. Recently, Reserve Bank of India and _________________ have signed and exchanged Terms of Reference

for integration of their fast payment systems which will further deepen financial connectivity and
reinforce the enduring historical, cultural, and economic ties between the two countries.
A. Central Bank of Malaysia
B. Bank of Mauritius
C. Nepal Rastra Bank
D. South African Reserve Bank
E. Royal Monetary Authority of Bhutan
 MCQs for Practice

Q2. Recently, In a bid to enable banks to sufficiently attract qualified competent individuals on their
Boards, the RBI has revised upwards the ceiling in respect of remuneration of Non-Executive Directors
(NEDs), other than the Chair of the Board, to ₹___________ per annum from ₹20 lakh.
A. 25 Lakh
B. 30 Lakh
C. 35 Lakh
D. 40 Lakh
E. 45 Lakh
Q. Recently (September 2021) NARCL was launched by the
Union Cabinet approving the government guarantee on
security receipts to buy bad loans of lenders. It has been
incorporated under the Companies Act and has applied for
license from RBI. What does R stand for in NARCL?

1. Resolution
2. Reconstruction
3. Restructuring
4. Revenue
5. None of the Above