Weekly Secretarial Updates
March 24, 2012 to March 30, 2012
| RBI UPDATE | |||
| Sr No | Circular/ Notification number | Particulars | Applicability |
| 1 (a) | RBI/2011-12/470 DNBS.CC.PD.No.266 /03.10.01/2011-12 dated March 26, 2012 | Guidelines on Fair Practices Code for NBFCs | All the Non Banking Financial Companies |
| (b) | RBI/2011-12/472 UBD. CO. BPD. (PCB).No 28/12.05.001/2011-12 dated March 27, 2012. | Guidelines issued under Section 36(1) (a) of the Banking Regulation Act, 1949 (AACS) - Implementation of the provisions of Foreign Contribution (Regulation) Act, 2010 | The Act extends to the whole of India, to its citizens outside India and also to associate branches or subsidiaries outside India, of companies or body corporate, registered or incorporated in India. |
| (c) | RBI/2011-12/474 A. P. (DIR Series) Circular No.97 dated March 28, 2012. | Overseas Investments by Resident Individuals – Liberalisation / Rationalisation | Resident Individuals and Category-I Authorised Dealer Banks |
| (d) | RBI/2011-12/473 A.P. (DIR Series) Circular No. 96 dated March 28, 2012 | Overseas Direct Investments by Indian Party – Rationalisation | Person resident in India |
| IRDA UPDATES | |||
| 2 (a) | IRDA/F&I/CIR/INV/69/03/2012 dated March 26, 2012. | One Time declaration of NAV | Applicable to all the Life Insurance Companies |
| SEBI UPDATES | |||
| 3(a) | CIR/MIRSD/ 4/2012 dated March 29, 2012. | Review of Regulatory Compliance and Periodic Reporting | All Bankers to an Issue registered with SEBI (BTIs) |
| (b) | SEBI/Cir/ISD/ 1 /2012 dated March 30, 2012 | Exemptions from 100% promoter(s) holding in demat form | All the Listed Companies |
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1 (a) Guidelines on Fair Practices Code for NBFCs
RBI Circular – March 26, 2012:
Applicability:
All the Non Banking Financial Companies
Details of Earlier guidelines on the same lines:
As per the earlier RBI guidelines on the above topic all the NBFC’s were required to formulate a fair practice code coving the following points while carrying on their business.
- Make adequate disclosures on the terms and conditions of a loan and
- also adopt a non-coercive recovery method.
As a result of the rapid growth in NBFCs’ lending against gold Jewellery there came a need for the RBI to bring in the circular no: RBI/2011-12/470 DNBS.CC.PD.No.266 /03.10.01/2011-12 dated March 26, 2012.
Crux of the Circular:
In addition to the fair practice code adopted by all the NBFCs the following points were to form part of the fair practice code adopted by them:
- Complaints about excessive interest charged by NBFCs
- Clarification regarding re-possession of vehicles financed by NBFCs’ for reference.
For further details information please follow the below link
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1(b) Guidelines issued under Section 36(1) (a) of the Banking Regulation Act, 1949 (AACS) - Implementation of the provisions of Foreign Contribution (Regulation) Act, 2010
RBI Circular – March 27, 2012:
We draw your attention to the RBI circular no. RBI/2011-12/472 UBD. CO. BPD. (PCB).No 28/12.05.001/2011-12 dated March 27, 2012.
The Act extends to the whole of India, to its citizens outside India and also to associate branches or subsidiaries outside India, of companies or body corporate, registered or incorporated in India.
Crux of the Circular:
- The Foreign Contribution (Regulation) Act, 1976 stands repealed with the Foreign Contribution (Regulation) Act, 2010 coming into force.
- The crux of the new act are as follows:
The guidelines on the Foreign Contribution (Regulation) Act, 2010, is intended to consolidate the law regulating the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith.
Details of the same are as follows:
a. Clearly specifies certain persons are totally barred from accepting any foreign contribution.
b. Restrictions on acceptance of foreign hospitality by certain specified persons
c. The Act mandates that except as otherwise provided in the Act, no person having a definite cultural, economic, educational, religious or social program shall accept foreign contribution, unless such person obtains a certificate of registration from the Central Government.
d. The Act imposes a prohibition, on persons registered and granted certificate or has obtained prior permission under the Act, from transferring such contribution to any other person, unless such other person is also registered and had been granted a certificate or obtained the prior permission under the Act.
e. It states that every person who has been granted a certificate or given prior permission shall receive foreign contribution in a single account only through such one of the branches of a bank as he may specify in his application for grant of certificate. However for the purpose of utilizing the foreign contribution he can open one or more accounts in one or more banks.
f. Act makes it is mandatory for every bank or authorised person in foreign exchange to report to such specified authority
o the prescribed amount of foreign remittance
o the source and manner in which the foreign remittance was received and
o other particulars, in such form and manner as may be prescribed.
g. Every person who has been granted a certificate or given prior approval as above has to maintain accounts of the foreign contribution received and utilized in the prescribed manner.
h. Central Government to authorize inspection of accounts or records for verifying contravention of the provisions of the Act. It also provides for seizure of accounts and records and also articles or currency or security received in contravention of the provisions of the Act.
i. The Act describes certain offences and the punishment/penalties for violation of its provisions.
j. Rules framed under the Act
- The Rules, inter alia, provide for Guidelines for the Central Government for declaration of an organization to be of a political nature, the nature of activities which would be treated as speculative activities, what constitutes administrative expenses, procedure for availing of foreign hospitality by specified categories of persons, procedure relating to application for obtaining 'registration' or 'prior permission' to receive foreign contribution, whom to make application for compounding, procedure for transferring foreign contribution to other registered or unregistered persons, the Forms to be used for various purposes etc.
http://rbi.org.in/scripts/NotificationUser.aspx?Id=7091&Mode=0
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1(c) Overseas Investments by Resident Individuals – Liberalisation / Rationalisation
RBI Circular – March 28, 2012:
We draw your attention to the RBI circular no RBI/2011-12/474 A. P. (DIR Series) Circular No.97 dated March 28, 2012.
Applicability:
Resident Individuals and Category-I Authorised Dealer Banks
Crux of the Circular:
As per this circular, general permission is granted to resident individuals in respect to the acquisition of the shares in the following manner:
- Acquiring qualification shares of an overseas company for holding the post of a Director
- Acquiring shares of a foreign company towards professional services rendered or in lieu of Director’s remuneration
- Acquiring shares in a foreign company through ESOP Scheme
For further information please follow the link:
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1(d) Overseas Direct Investments by Indian Party – Rationalisation
RBI Circular – March 28, 2012:
We draw your attention to the RBI circular no: RBI/2011-12/473 A.P. (DIR Series) Circular No. 96 dated March 28, 2012
Applicability:
Person resident in India
Crux of the Circular:
This circular further liberalises the various provisions / regulations relating to transfer or issue of any foreign security by a person resident in India.
This circular is applicable in the following manner:
- Creation of charge on the immovable / movable property and other financial assets (except shares of JV / WOS) of the Indian Party
- bank guarantee issued by a resident bank on behalf of an overseas JV / WOS of the Indian party, which is backed by a counter guarantee / collateral by the Indian party, shall be reckoned for computation of the financial commitment of the Indian Party and reported accordingly
- The personal guarantee issued by the promoters of the Indian Party as presently allowed under the General Permission shall also be extended to the indirect resident individual promoters of the Indian Party with same stipulations as in the case of personal guarantee by the direct promoters.
- Submission of Annual Performance Report in the prescribed format and manner.
- The Compulsorily Convertible Preference Shares shall be treated at par with equity shares and the Indian party is allowed to undertake financial commitment based on the exposure to JV by way of CCPS.
For further information please follow the below link:
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IRDA UPDATES:
2 (a) One Time declaration of NAV
IRDA Circular – March 26, 2012:
We draw your attention to the IRDA circular no: IRDA/F&I/CIR/INV/69/03/2012 dated March 26, 2012.
Applicability:
Applicable to all the Life Insurance Companies
Crux of the Circular:
Previously all the Life Insurance Companies were to compute and declare the NAV on a daily basis, now a relaxation has been provided for such declaration.
As per this circular a certificate to this effect issued by the auditor shall be filed with the IRDA that the NAV is computed and declared for each segregated fund on a daily basis.
This certificate to be filed on or before March 30, 2012.
For further details information please follow the below link
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SEBI UPDATES:
3 (a) Review of Regulatory Compliance and Periodic Reporting
SEBI Circular – March 29, 2012:
We draw your attention to the SEBI circular no: CIR/MIRSD/ 4/2012 dated March 29, 2012.
Applicability:
All Bankers to an Issue registered with SEBI (BTIs)
Crux of the Circular:
In order to strengthen the compliance mechanism and role of the Boards of BTIs, SEBI has brought in the periodic reporting in the new format.
The new format includes the status of regulatory compliance and investor grievances redressal.
This circular enables to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
For further details information please follow the below link
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3 (b) Exemptions from 100% promoter(s) holding in demat form
SEBI Circular – March 30, 2012:
We draw your attention to the SEBI circular no: SEBI/Cir/ISD/ 1 /2012 dated March 30, 2012.
Applicability:
All the Listed Companies
Crux of the Circular:
This circular provides the exemptions that shall be taken into consideration while arriving at compliance with 100% promoter(s) holding in demat form. Such exemption shall be applicable in cases where :-
- Promoter(s) have sold their shares in physical mode and such shares have not been lodged for transfer with the company;
- Matters concerning part/entire shareholding of promoters/promoter group are sub judice before any Court/Tribunal; or
- Shares cannot be converted into demat form due to death of any promoter(s); or
- Shares allotted to promoter(s) that await final approval for listing from stock exchange and such pendency is less than 30 days or shares that upon receipt of final listing approval from stock exchange are pending conversion to demat and such pendency is less than 15 days.
For availing the above said exemption companies shall approach Stock Exchange(s) along with necessary documentary evidence.
Purpose of this circular
This enables to protect the interests of investors in securities and to promote the development of, and to regulate the securities market as well as to regulate the business in stock exchanges.
For further details information please follow the below link
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