Please refer to para V of BPRD Circular No.29 dated 13th July,
1999 wherein the banks and Non-Bank Financial Institutions were
allowed to develop and expand their deposit mobilization efforts
based on explicitly stated expected rates of returns and provision
of additional and more efficient financial services to the depositors.
2. A number of requests were received from
banks/NBFIs allowing them to launch new deposit mobilization
schemes offering insurance coverage to their account holders
across the board by entering into an agreement with an insurance
company. These requests have been examined and it has been
decided that banks/NBFIs may provide insurance products to
their depositors provided (i) it is not mandatory and (ii)
there is no discrimination in the rate of return to the depositors
who may or may not opt for the insurance cover. The banks/NBFIs
shall maintain secrecy of information in regard to access
to their books of accounts and shall design their own internal
control and procedures.
3. The banks/NBFIs shall ensure that no other
rules, regulations & instructions issued by State Bank
from time to time are violated and the interest of the depositors
is fully protected.
4. Please acknowledge receipt.
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