| RBI UPDATES | |||
| Sr No | Circular/ Notification number | Particulars | Applicability |
| 1 (a) | RBI/2011-12/489 DPSS.CO.OD. 1848 /06.07.003/2011-2012 dated April 9, 2012 | Access criteria for payment systems – sub-membership to centralised payment systems | The Chairman/Managing Director/Chief Executive Officer All Scheduled Commercial Banks including RRBs/ Urban Co-operative Banks/State Co-operative Banks/ District Central Co-operative Banks |
| (b) | RBI/2011-12/491 DGBA.CDD.H-6614 /13.01.298/2011-12 dated April 10, 2012 | Relief and Savings bonds-Compensation structure for delay in payment of interest and/or principal | All the Banks and Investors involved in the relief and savings bonds. |
| (c) | RBI/2011-12/499 DBOD.No.BP.BC 92 /21.06.007/2011-12 dated April 13, 2012 | Prudential Guidelines on Capital Adequacy and Market Discipline- New Capital Adequacy Framework (NCAF) - Eligible Credit Rating Agencies - Brickwork Ratings India Pvt. Ltd. (Brickwork) | All the Listed Companies |
| SEBI UPDATES | |||
| 2(a) | CIR/IMD/FIIC/10/2012 dated April12, 2012 | Allocation of debt limits to FIIs | All Foreign Institutional Investors |
| (b) | - CIR/MRD/DP/10 /2012 dated April 13, 2012 - CIR/MRD/DP/ 11 /2012 dated April 13, 2012 | Master Circular for Depositories | All the Depositories, Stock Exchanges and listed companies |
| (c) | CIR/CFD/DIL/3/ 2012 dated April 13, 2012 | Processing of investor complaints against listed companies in SEBI Complaints Redress System (SCORES) | To all the Stock Exchanges and Listed Companies |
| (d) | CIR/MRD/DMS/ 12 /2012 dated April 13, 2012 | Guidelines for Business Continuity Plan (BCP) and Disaster Recovery (DR) | All Stock Exchanges / All Depositories |
| IRDA UPDATES | |||
| 3 (a) | IRDA/F&I/CIR/EMT/085/04/2012 dated April 12, 2012 | Expenses of Management (EOM) under section 40B of the Insurance Act, 1938 read with Rule 17D of the Insurance Rules, 1939 | Life Insurance Companies |
RBI UPDATES:
1(a) Access criteria for payment systems – sub-membership to centralised payment systems
RBI Circular – April 9, 2012:
We draw your attention to the RBI circular no: RBI/2011-12/489 DPSS.CO.OD. 1848 /06.07.003/2011-2012 dated April 9, 2012.
Applicability:
The Chairman/Managing Director/Chief Executive Officer
All Scheduled Commercial Banks including RRBs/
Urban Co-operative Banks/State Co-operative Banks/
District Central Co-operative Banks
Crux of the Circular:
Under the overall guidance of the Board for Payment and Settlement Systems, the Reserve Bank over the last few years, has been taking a number of steps to popularise the electronic payment systems in the country. In this connection, liberalised revised access criteria for centralised and decentralised payment systems were announced.
2. The centralised payment systems, viz. Real Time Gross Settlement System (RTGS) and National Electronic Funds transfer (NEFT), currently provide for only direct membership. As an exception, Regional Rural Banks (RRBs) have been given access to the NEFT system through their Sponsor Banks.
3. On a review, it has been decided to expand the sub-membership route to enable all licenced banks to participate in NEFT and RTGS systems. This would be an alternate mechanism to all licenced banks which have the technological capabilities but are not participating in centralised payment systems on account of either not meeting the access criteria or because of cost considerations. This arrangement would be subject to the following conditions:
A) The sub-member/s would participate in the centralised payment systems through their sponsor bank which is a direct member of the centralised payment system.
B) In order to ensure compliance with the timely credit and return discipline which is of utmost importance in centralized payment systems, branches of sub-member/s that are not under core banking system shall be kept out of the centralised payment systems till such time they are brought under core banking.
C) The sponsor banks would be responsible for sending/receiving the transactions/messages on behalf of their sub-member.
D) There are no restrictions on the number of sub-members a sponsor bank could sponsor. Aspects relating to operational feasibility, risk mitigation, fund settlement, collaterals etc., have to be taken care of by the sponsor banks before sponsoring sub-member/s.
E) The sponsor bank should put in place a risk management framework and a system of continuous monitoring of the risk management practices of sub-member/s that they desire to sponsor. The risk management framework should be approved by the Board of the sponsor bank.
F) The settlement of transactions by/on the sub-members would take place in the settlement accounts of the sponsor banks maintained with Reserve Bank of India. The sponsor bank under this arrangement will assume complete responsibility for the settlement of all transactions by/on the sub-members.
G) The sponsor bank at all times should ensure that their sub-member/s adhere to and abide by the rules, regulations, operational requirements, instructions, orders, decisions etc, of the centralised payment systems, as laid down by Reserve Bank of India from time to time.
H) Redressal of all customer complaints / grievance would be the responsibility of the sponsor bank. To aid in this process, the sponsor bank should ensure that the sub-member/s have put in place a transparent and robust mechanism to resolve customer complaints in a quick and efficient manner, as laid down in the procedural guidelines, business rules and regulations of the centralised payment systems.
I) All disputes between the sponsor bank and the sub-member/s will be handled bi-laterally amongst them.
J) The sponsor bank should bring to the immediate notice of the Reserve Bank of India:
(i) any involvement of its sub-member/s in any suspicious transactions, frauds, etc.,
(ii) any of its sub-member/s resorting to any unfair practices relating to their participation in centralised payment systems;
(iii) any of its sub-member/s not adhering to the rules, regulations, operational requirements, instructions etc, of centralised
payment systems;
K) The sponsor bank is not required to take prior approval of the Reserve Bank of India for sponsoring a submember/ s into the centralised payment systems. However, as and when they sponsor sub-member/s, they should immediately inform the Reserve Bank of India, the details of the sub-member/s, IFSC/MICR codes allotted to the branch/branches of sub-member/s, date of commencement of sub-membership etc.
L) The sponsor bank should inform the Reserve Bank of India in case of cessation of sponsorship arrangement between the sponsor bank and sub-member/s immediately.
M) The charges for customer transactions of sub-member/s cannot exceed the charges applicable to customers of sponsor banks/direct members of the centralised payment systems viz., RTGS and NEFT.
4. The scheme of sub-membership for centralised payment systems is effective from the date of this circular.
5. Any further rationalisation / liberalisation of the access criteria norms would be considered at a later stage based on the experience of these measures put in place.
For further details information please follow the below link
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1 (b) Relief and Savings bonds-Compensation structure for delay in payment of interest and/or principal
RBI Circular – April 10, 2012:
We draw your attention to the RBI circular no: RBI/2011-12/491 DGBA.CDD.H-6614 /13.01.298/2011-12 dated April 10, 2012.
Applicability:
All the Banks and Investors involved in the relief and savings bonds.
Crux of the Circular:
Earlier it was decided that the agency banks may compensate an investor in Relief/Savings bonds, for the financial loss due to late receipt/delayed credit of interest warrants/maturity value, at their own savings bank rate for respective amounts (i.e. upto ` 1 lakh and over ` 1 lakh) without any discrimination.
However in order to avoid ambiguity and variation in compensation rates across different agency banks, these instructions have been reviewed. It has now been decided that with effect from the date of this circular, an agency bank shall compensate an investor in Relief/Savings bonds, for the financial loss due to late receipt/delayed credit of interest warrants/maturity value, at a fixed rate of 8% per annum.
For further details information please follow the below link
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1 (c) Prudential Guidelines on Capital Adequacy and Market Discipline- New Capital
Adequacy Framework (NCAF) - Eligible Credit Rating Agencies - Brickwork
Ratings India Pvt. Ltd. (Brickwork)
RBI Circular – April 13, 2012:
We draw your attention to the RBI circular no: RBI/2011-12/499 DBOD.No.BP.BC 92 /21.06.007/2011-12 dated April 13, 2012.
Applicability:
All the Listed Companies
Crux of the Circular:
At present the rating of the Credit rating agencies viz. CARE, CRISIL, FITCH India and ICRA have been accredited for the purpose of risk weighting the banks' claims for capital adequacy purposes. In addition to the rating of the existing rating agencies the rating of Brickwork Ratings India Pvt. Ltd. (Brickwork) may also be used for the same purpose.
For further details information please follow the below link
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SEBI UPDATES: 2(a) Allocation of debt limits to FIIs
SEBI Circular – April 12, 2012:
We draw your attention to the SEBI circular no. CIR/IMD/FIIC/10/2012 dated April12, 2012.
All Foreign Institutional Investors
Crux of the Circular:
1. Based on the assessment of the utilization of the limits to FIIs for investments in Government Debt Old, corporate Debt Old and Government Debt Long Term category, it has been decided by the government to allocate the unutilized limits. The bidding for this limit shall be done on the NSE from 15:30 hrs to 17:30 hrs, on April 23, 2012.
2. Allocation of limits under Government Debt- Old category:
INR 1,203 crore shall be auctioned through electronic bidding process, in terms of SEBI circular IMD/FII&C/37/2009 dated February 06, 2009, subject to the modifications stated below:-
a) In partial amendment to clause 3 (h) of the aforesaid circular IMD/FII & C/37/2009, no single entity shall be allocated more than INR 120 cr. of the investment limit. Where a single entity bids on behalf of multiple entities, in terms of para 7 of SEBI circular CIR/IMD/FIIC/18 /2010 dated November 26, 2010, then such bid would be limited to INR 120 cr. for every such single entity.
b) In partial amendment to clause 3 (c) and 3(d) of the aforesaid circular IMD/FII &C/37/2009, the minimum amount which can be bid for shall be INR 1 cr.
3. Allocation of limits under Government Debt- Long Term category:
INR 1,410 crore shall be auctioned through electronic bidding process, in terms of SEBI circular IMD/FII&C/37/2009 dated February 06, 2009, subject to the modifications stated below:-
a) In partial amendment to clause 3 (h) of the aforesaid circular IMD/FII & C/37/2009, no single entity shall be allocated more than INR 140 cr. of the investment limit. Where a single entity bids on behalf of multiple entities, in terms of para 7 of SEBI circular CIR/IMD/FIIC/18 /2010 dated November 26, 2010, then such bid would be limited to INR 140 cr. for every such single entity.
b) In partial amendment to clause 3 (c) and 3(d) of the aforesaid circular IMD/FII &C/37/2009, the minimum amount which can be bid for shall be INR 1 cr.
4. Allocation of limits under Corporate Debt- Old category:
INR 4,547 crore shall be auctioned through electronic bidding process, in terms of SEBI circular IMD/FII&C/37/2009 dated February 06, 2009, subject to the modifications stated below:-
a) In partial amendment to clause 3 (h) of the aforesaid circular IMD/FII & C/37/2009, no single entity shall be allocated more than INR 450 cr. of the investment limit. Where a single entity bids on behalf of multiple entities, in terms of para 7 of SEBI circular CIR/IMD/FIIC/18 /2010 dated November 26, 2010, then such bid would be limited to INR 450 cr. for every such single entity.
b) In partial amendment to clause 3 (c) and 3(d) of the aforesaid circular IMD/FII &C/37/2009, the minimum amount which can be bid for shall be INR 1 cr
For further information please follow the below mentioned MCA circular:
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2(b) Master Circular for Depositories
SEBI Circular – April 13, 2012:
We draw your attention to the SEBI circular no.
| Sr No | Name of the Circular | Circular No |
| 1 | Master Circular for Depositories | CIR/MRD/DP/10 /2012 dated April 13, 2012 |
| 2 | Master Circular for Stock Exchange / Cash Market | CIR/MRD/DP/ 11 /2012 dated April 13, 2012 |
Applicability:
All the Depositories, Stock Exchanges and listed companies
Crux of the Circular:
The above mentioned Master circular have been prepared and shall come into force from the date of its issue.
For further information please follow the link:
MC for Depositories http://www.sebi.gov.in/cms/sebi_data/attachdocs/1334309345244.pdf
MC for Stock Exchanges http://www.sebi.gov.in/cms/sebi_data/attachdocs/1334312676570.pdf
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2(c) Processing of investor complaints against listed companies in SEBI Complaints Redress System (SCORES)
SEBI Circular – April 13, 2012:
We draw your attention to the SEBI circular no: CIR/CFD/DIL/3/ 2012 dated April 13, 2012
Applicability:
To all the Stock Exchanges and Listed Companies
Crux of the Circular:
SEBI has commenced processing of investor complaints in a centralized web based complaints redress system ‘SCORES’. Pursuant to SEBI Circular no. CIR/OIAE/2/2011 dated June 03, 2011 on the captioned subject, all listed companies are required to obtain authentication on SCORES.
2. With a view to facilitate the online movement of complaints, it has been decided to mandate that companies desirous of getting their equity shares listed on the stock exchanges should also obtain authentication on SCORES, before Listing Approval is granted by your stock exchange.
3. You are, therefore, advised to ensure compliance of this requirement before Listing Approval is granted by your stock exchange.
4. This Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
For further information please follow the below link:
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2(d) Guidelines for Business Continuity Plan (BCP) and Disaster Recovery (DR)
SEBI Circular – April 13, 2012:
We draw your attention to the SEBI circular no. CIR/MRD/DMS/ 12 /2012 dated April 13, 2012.
Applicability:
All Stock Exchanges / All Depositories
Crux of the Circular:
In the event of disaster, the disruption in trading system of stock exchanges / depository system may not only affect the market integrity but also the confidence of investors. In order to address this issue, the current BCP - DR setups of some of the stock exchanges having nation-wide terminals and depositories were examined by the Technical Advisory Committee of SEBI (TAC). Based on the recommendations of TAC, the broad guidelines for BCP - DR have been drafted.
For further information please follow the link:
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IRDA UPDATES: 3(a) Expenses of Management (EOM) under section 40B of the Insurance Act, 1938 read with Rule 17D of the Insurance Rules, 1939
IRDA Circular – April 12, 2012:
We draw your attention to the IRDA circular no. IRDA/F&I/CIR/EMT/085/04/2012 dated April 12, 2012.
Applicability:
Life Insurance Companies
Crux of the Circular:
1. Introduction:
As per Section 40B of the Insurance Act, 1938, every insurer transacting life insurance business in India is required to furnish to the Authority, the statement of Expenses of Management (EoM), in the prescribed form within the prescribed time. The detailed computation of EoM under Section 40B of the Insurance Act, 1938 read with Rule 17D of the Insurance Rules, 1939 are to be filed on an annual basis.
2. Divergent Practices Observed:
On detailed review of the statements filed by the insurers, it is observed that divergent practices are being followed in interpretation of some of the applicable provisions. These divergences are mainly observed in the interpretation of the terms ‘charges’ and ‘expenses capitalised’ under Section 40B.
3. Clarifications:
With a view to facilitatea uniform approach by all companies the following clarifications are provided:
i) For the purposes of explanation (b) of Section 40B
a) ‘Charges’: Includes all charges levied directly or indirectly in respect of the insurance business but excludes taxes which are a charge against profits e.g., income tax, wealth tax. However, taxes like Service Tax borne by the insurer and Fringe Benefit Tax, which are not charged against profits, shall be included.
The share of head office expenses in respect of life insurance business transacted by the insurer outside India shall,however, be excluded.
b) ‘Expenses Capitalized’: Shall be such expenses like administration and other general overhead expenses, which are otherwise considered as revenue expenses, are added to the cost of fixed assets where they are attributable to the construction/acquisition of fixed assets or bringing it to its working condition. Depreciation on such capitalised expenses should be excluded for the purposes of these computations in the subsequent years to avoid double count.
ii) For the purposes of computation of expenses of management under Rule 17D the following shall be considered:
a) Income/expenditure accounted on accrual basis;
b) Pension business shall be treated as immediate/deferred annuity business, as applicable;
c) Group Insurance:
- Regular Premium plans with limited premium payment term and/or pre-determined policy term shall be treated as regular business with due classification into first year premium and renewal premium.
- Plans other than those quoted above shall be treated as Single Premium plans.
iii) Insurers are advised to strictly adhere to the following:
a) Apply the percentages of allowable expenses as specified under Rule 17D on:
- ‘Premium net of reinsurance’ in case of first year premium and renewal premium under life insurance business; and
- ‘Premium received’ in case of annuity business and single premium business.
b) Ensure that computations are in accordance withIRDA (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002, especially in terms of classification of business lines and segments.
4. In the event of differences in the data furnished in the Statement under Rule 17D with that of the Financial Statements, reconciliation between the two shall be filed as part of the statement under this Circular.
5. The statement of expenses of management as prescribed in the format annexed to this Circular shall be placed along with the Financial Statements prepared under IRDA (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002 for consideration by the Audit Committee prior to being placed for approval by the Board of the Company.
6. The statement of expenses of management and the Financial Statements, along with the Auditors Report, duly adopted by the Board, shall be filed with the Authority as directed vide IRDA Circular Ref: IRDA/F&A/013/2005-06 dated 9th June 2005.
7. This Circular is effective from the financial year 2011-12.
For further information please follow the link:
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