RBI January 2015

By February 25, 2015 December 20th, 2019 No Comments
Date Subject Amendment
DCBR.CO.BPD (RCB).Cir.No.09/14.01.062/2014-15
7.1.2015 StCBs/CCBs-Designated
Director – Amendment to section 13(2) of Prevention of Money Laundering Act
(PMLA) 2002 
was advised to  State / Central
cooperative banks to nominate a Director on their Boards as ‘Designated
Director’ to ensure compliance with the obligations under the Prevention of
Money Laundering (Amendment) Act, 2012 in the earlier circular in
clarification to that, it is clarified that StCBs/CCBs can also designate a
person who holds the position of senior management or equivalent as a
‘Designated Director’. but  the Principal
Officer cannot be nominated as the ‘Designated Director’. 
FEMA.334/2015-RB 9.1.2015 Foreign
Exchange Management (Transfer or Issue of Security by a Person Resident
outside India) (Amendment) Regulations, 2015
amended the Foreign Exchange Management (Transfer or Issue of Security by a
Person Resident outside India) Regulations, 2000 whereby the invesment in
Pharmaceuticals sector has been revised with certian conditions and allowing
investment in                                
100%  Automatic
Brownfield  100%  Government
15.1.2015 Entry
of Banks into Insurance Business 
notification states that banks may undertake insurance business by setting up
a subsidiary/joint venture, as well as undertake insurance broking/ insurance
agency/either departmentally or through a subsidiary subject to the
conditions of “Guidelines for Banks undertaking Insurance Broking and
Agency Business”                                                                          
it also states that if a bank or its group entities, including
subsidiaries, undertake insurance distribution through either broking or
corporate agency mode, the bank/other group entities would not be permitted
to undertake insurance distribution activities, ie, only one entity in the
group can undertake insurance distribution by either one of the two modes
mentioned above.                                                                                              
16.01.2015 Review
of Guidelines on Restructuring of Advances by NBFCs 
guidelines deals with the new cretaria for treatment of advances for
restructuring by the NBFCs.                                 The
guidlines revise the  date of
commencement of commercial operations (DCCO) and consequential shift in
repayment schedule for equal or shorter duration will not be treated as
restructuring subject to conditions laid down in the Circular.
RBI/2014-15/413 DNBR.PD.CC.No.012/03.10.001/2014-15 19.01.2015 Flexible
Structuring of Long Term Project Loans to Infrastructure and Core Industries
to the Non-Banking Financial (Deposit Accepting or Holding) Companies
Prudential Norms (Reserve Bank) Directions, 2007 
A.P. (DIR Series) Circular No.59
22.01.2015 Overseas
Direct Investments by proprietorship concern / unregistered partnership firm
in India
provides for revised terms and conditions 
to be complied with for considering the proposal of Overseas Direct
Investment, by a proprietorship concern / unregistered partnership firm in
India, by the Reserve Bank under the approval route
A.P. (DIR Series) Circular No. 61
22.01.2015 Depository
Receipts Scheme 
new scheme called ‘Depository Receipts Scheme, 2014’ (DR Scheme, 2014) for
investments under ADR/GDR have been notified by the Central Government
effective from December 15, 2014 which provides for repeal of extant
guidelines for Foreign Currency Convertible Bonds and Ordinary Shares
(Through Depositary Receipt Mechanism) Scheme, 1993 except to the extent
relating to foreign currency convertible bonds.

The salient features of the new scheme are:

    The securities in which a person
resident outside India is allowed to invest under Schedule 1, 2, 2A, 3, 5 and
8 of Notification No. FEMA. 20/2000-RB dated 3rd May 2000 shall be eligible
securities for issue of Depository Receipts in terms of DR Scheme 2014;

    A person will be eligible to
issue or transfer eligible securities to a foreign depository for the purpose
of issuance of depository receipts as provided in DR Scheme 2014.

    The aggregate of eligible
securities which may be issued or transferred to foreign depositories, along
with eligible securities already held by persons resident outside India,
shall not exceed the limit on foreign holding of such eligible securities
under the extant FEMA regulations, as amended from time to time.

    The eligible securities shall not
be issued to a foreign depository for the purpose of issuing depository
receipts at a price less than the price applicable to a corresponding mode of
issue of such securities to domestic investors under FEMA, 1999.

    It is to be noted that if the
issuance of the depository receipts adds to the capital of a company, the
issue of shares and utilisation of the proceeds shall have to comply with the
relevant conditions laid down in the Regulations framed and Directions issued
under FEMA, 1999.

    The domestic custodian shall
report the issue/transfer of sponsored/unsponsored depository receipts as per
DR Scheme 2014 in ‘Form DRR’ as given in Annex within 30 days of close of the
issue/ program.

A.P. (DIR Series) Circular No.64
23.01.2015 External
Commercial Borrowings (ECB) Policy – Simplification of Procedure 
Dealer (AD) are being notified of that the 
Category-I banks were invited and under the  A.P. (DIR Series) Circulars  powers have been delegated to them to deal
with cases related to change in draw-down and repayment schedules of ECBs
subject to conditions specified in the Circular
DCBR.CO.LS (PCB) Cir.No.4/07.01.000/2014-15
29.01.2015 Review
of norms for classification of Urban Co-operative Banks (UCBs) as Financially
Sound and Well Managed (FSWM)
notification is in regards to the clarification to the defination of  “regulatory comfort” under the
circular issued in October 2014. The notification define regulatory comfort
for the purpose of classification of an UCB as FSWM would now include
compliance to the provisions of Banking Regulation Act, 1949 (AACS), Reserve
Bank of India Act, 1934 and the instructions / directions issued by RBI from
time to time i.e. the bank should have track record of regulatory compliance
and no monetary penalty should have been imposed on the bank on account of
violation of RBI directives / guidelines during the last two financial years.

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