Delhi I Mumbai I Pune I Kanpur

WEEKLY UPDATES MAY 12TH –17TH, 2014

Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur

INDEX MCA UPDATES One time opportunity for extension of period of Reservation of Name

1

SEBI UPDATES Risk management framework for Foreign Portfolio Investors (FPI) under the SEBI (Foreign Portfolio Investors) Regulations, 2014

2-3

Establishment of Connectivity with both depositories NSDL and CDSL – Companies eligible for shifting from Trade for Trade Settlement (TFTS) to Normal Rolling Settlement

4-5

RBI UPDATES Advance against Pledge of Gold/ Silver Ornaments

6

Opening of Bank Accounts in the Names of Minors

7

Operations of foreign branches and subsidiaries of the Indian banks – Compliance with statutory/regulatory/administrative prohibitions/restrictions

8

Issuance and Operation of Pre-paid Payment Instruments in India – Consolidated Revised Policy Guidelines

9 - 22

Treatment of RIDF and certain other funds under priority sector

23

Levy of Penal Charges on Non-Maintenance of Minimum Balances in Inoperative Accounts

24

Undertaking of activity by the Urban Cooperative Banks (UCBs) as PAN Service Agent (PSA) for providing PAN issuance services to its customers by entering into tie-up with authorized Agencies

25

External Commercial Borrowings (ECB) from Foreign Equity Holder - Simplification of Procedure

26 - 27

CUSTOMS UPDATES Rate of exchange of conversion of each of the foreign currency with effect from the 16th May, 2014

28 - 29

Amends Notification No. 36/2001-Customs (N.T.), dated the 3rd August, 2001

30 - 31

Seeks to extend the levy of notification No. 14/2010-Cus dated 20.02.2014, for a further period of one year ie.upto and inclusive of 21st April, 2015

Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

32

Delhi I Mumbai I Pune I Kanpur

MCA UPDATES One time opportunity for extension of period of Reservation of Name

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur

SEBI UPDATES CIRCULAR CIR/MRD/DP/15/2014

May 15, 2014

To All Stock exchanges and Clearing corporations; All Depositories; All Custodians of Securities; All Foreign Institutional Investors (FIIs) through their designated Custodians of Securities; All Designated Depository Participants (DDPs) through Depositories Dear Sir / Madam, Sub: Risk management framework for Foreign Portfolio Investors (FPI) under the SEBI (Foreign Portfolio Investors) Regulations, 2014 1.

The SEBI (Foreign Portfolio Investors) Regulations, 2014 were notified on January 07, 2014 and shall commence with effect from June 01, 2014.

2.

To effect a smooth transition to the FPI regime, stock exchanges and clearing corporations are directed to take following measures with regard to trading and risk management of FPI trades: 2.1. Margining of trades undertaken by FPIs in the Cash Market: (i)

The trades of FPIs in Category I, II & III shall be margined on a T+1 basis in accordance with SEBI circular MRD/DoP/SE/Cir-18/2008 dated May 22, 2008.

(ii)

However, the trades of FPIs who are Corporate bodies, Individuals or Family offices shall be margined on an upfront basis as per the extant margining framework for the non-institutional trades.

2.2. Position limit of an FPI in the Equity Derivatives Segment and for Interest Rate Futures: Category I & II FPIs shall have position limits as presently available to FIIs. Category III FPIs shall have position limits as applicable to the clients. 2.3. Facility for allocation of trades: In modification to the SEBI circular MRD/DoP/SE/Cir-35/2004 dated October 26, 2004, the following framework shall be implemented to facilitate allocation of trades of a FPI to other FPIs: (i)

Entities who trade on behalf of FPIs shall inform the stock brokers of the details of FPIs on whose behalf the trades would be undertaken.

(ii)

The stock broker, in turn, shall inform the stock exchanges the details of such related FPIs.

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur (iii)

Stock exchanges shall put-in place suitable mechanism to ensure that allocation of trade by a FPI is permitted only within such related FPIs.

3.

Custodians / DDPs shall provide necessary details related to FPIs, including categorisation of FPIs, to the stock exchanges for the purpose of implementing the aforementioned provisions.

4.

Stock Exchanges and Clearing Corporations may specify additional requirements as they may deem fit with regard to transition from FII to FPI regime.

5.

Stock Exchanges and Clearing Corporations are directed to: a) take necessary steps to put in place systems for implementation of the circular, including necessary amendments to the relevant bye-laws, rules and regulations. b) bring the provisions of this circular to the notice of the stock brokers / clearing members and also disseminate the same on its website; c)

6.

communicate to SEBI the status of implementation of the provisions of this circular.

This circular is being 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. Yours faithfully,

Maninder Cheema Deputy General Manager email: [email protected]

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur CIRCULAR CIR/MRD/DP/ 16 /2014

May 16, 2014

To, All Stock Exchanges Dear Sir / Madam, Sub:

Establishment of Connectivity with both depositories NSDL and CDSL – Companies eligible for shifting from Trade for Trade Settlement (TFTS) to Normal Rolling Settlement

1.

It is observed from the information provided by the depositories that the companies listed in Annexure „A‟ have established connectivity with both the depositories.

2.

The stock exchanges may consider shifting the trading in these securities to normal Rolling Settlement subject to the following: a) At least 50% of other than promoter holdings as per clause 35 of Listing Agreement are in dematerialized mode before shifting the trading in the securities of the company from TFTS to normal Rolling Settlement. For this purpose, the listed companies shall obtain a certificate from its Registrar and Transfer Agent (RTA) and submit the same to the stock exchange/s. However, if an issuer-company does not have a separate RTA, it may obtain a certificate in this regard from a practicing company Secretary/Chartered Accountant and submit the same to the stock exchange/s. b) There are no other grounds/reasons for continuation of the trading in TFTS.

3.

The Stock Exchanges are advised to report to SEBI, the action taken in this regard in the Monthly/Quarterly Development Report.

Yours faithfully,

Maninder Cheema Deputy General Manager email: [email protected]

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur Annexure A Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

Name of the Company Milk Partners India Limited (Formerly Ravileela Dairy Products Ltd, Ravileela Dairy Products Pvt Ltd) York Exports Limited Shree Karthik Papers Limited Vitan Agro Industries Limited Meenakshi Enterprises Limited Asia Capital Limited Akashdeep Metal Industries Limited Mega Nirman & Industries Limited (Formerly Daphene Investments And Properties Limited) Mercantile Ventures Limited (Formerly MCC Finance Limited, Excel Finance Limited) SAB Industries Limited (Formerly Steel Strips and Alloys ltd, Asia Steel and Alloys Ltd.) Potential Investments and Finance Limited Tarini Enterprises Limited Capital Trade Links Limited Nishtha Finance And Investments (India) Limited Econo Trade (India) Limited Associated Cereals Limited

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

ISIN INE301N01017 INE057Q01018 INE538D01015 INE186Q01015 INE242Q01016 INE131Q01011 INE149Q01013 INE216Q01010 INE689O01013 INE137M01017 INE919P01011 INE999P01013 INE172D01021 INE217Q01018 INE937K01014 INE840I01014

Delhi I Mumbai I Pune I Kanpur

RBI UPDATES RBI/2013-14/587 UBD.CO.BPD.PCB.Cir.No.60/13.05.001/2013-14 May 9, 2014 The Chief Executive Officers of All Primary (Urban) Co-operative Banks Dear Sir / Madam, Advance against Pledge of Gold/ Silver Ornaments Please refer to circular UBD.PCB.Cir.No.24/13.05.001/ 08-09 dated November 10, 2008, wherein Urban Cooperative Banks (UCBs) were advised to observe safeguards in order to mitigate the inherent risks attached to sanction of loans and advances against Gold / Silver ornaments. 2. As a prudential measure, it has now been decided to prescribe a Loan to Value (LTV) Ratio of not exceeding 75 per cent for UCBs‟ lending against gold jewellery (including bullet repayment loans against pledge of gold jewellery). Therefore, henceforth loans sanctioned by UCBs should not exceed 75 per cent of the value of gold ornaments and jewellery. 3. In order to standardize the valuation and make it more transparent to the borrower, it has been decided that gold jewellery accepted as security/collateral will have to be valued at the average of the closing price of 22 carat gold for the preceding 30 days as quoted by the India Bullion and Jewellers Association Ltd. [Formerly known as the Bombay Bullion Association Ltd. (BBA)]. If the gold is of purity less than 22 carats, the bank should translate the collateral into 22 carat and value the exact grams of the collateral. In other words, jewellery of lower purity of gold shall be valued proportionately. 4. It is reiterated that UCBs should continue to observe necessary and usual safeguards and also have a suitable policy for lending against gold jewellery with the approval of their Boards of Directors. Yours faithfully, (P. K. Arora) General Manager

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur RBI/2013-14/586 UBD.BPD.(PCB).Cir.No 61/13.01.000/2013-14 May 12, 2014 The Chief Executive Officer All Primary (Urban) Co-operative Banks Dear Sir/Madam, Opening of Bank Accounts in the Names of Minors Please refer to our circular UBD.(DC) 1148/V.1-84/85 dated February 22, 1985, in terms of which banks were advised to allow minors‟ accounts (fixed and savings deposit accounts) with mothers as guardians to be opened, subject to safeguards in allowing operations in such accounts by ensuring that the minors‟ accounts opened with guardian are not allowed to be overdrawn and that these always remain in credit. Subsequently, Urban Cooperative Banks (UCBs) were advised to extend the facility of allowing opening of minors‟ account with mothers as guardian, to Recurring Deposits. 2. With a view to promoting the objective of financial inclusion and also to bring uniformity among banks in opening and operating minors‟ accounts, banks are advised as under: a.

A savings /fixed / recurring bank deposit account can be opened by a minor of any age through his/her natural or legally appointed guardian.

b.

Minors above the age of 10 years may be allowed to open and operate savings bank accounts independently, if they so desire. Banks may, however, keeping in view their risk management systems, fix limits in terms of age and amount up to which minors may be allowed to operate their deposit accounts independently. They can also decide, in their own discretion, as to what minimum documents are required for opening of accounts by minors.

c.

On attaining majority, the erstwhile minor should confirm the balance in his/her account and if the account is operated by the natural guardian / legal guardian, fresh operating instructions and specimen signature of erstwhile minor should be obtained and kept on record for all operational purposes.

3. UCBs are free to offer additional banking facilities like internet banking, ATM/ debit card, cheque book facility etc., subject to the safeguards that minor accounts are not allowed to be overdrawn and that these always remain in credit.

Yours faithfully, (A.K.Bera) Principal Chief General Manager

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur RBI/2013-14/588 DBOD.No.BP.BC.111/21.04.157/2013-14 May 12, 2014 All Scheduled Commercial Banks (Excluding RRBs and LABs) & All India Term-Lending & Refinancing Institutions Madam / Sir, Operations of foreign branches and subsidiaries of the Compliance with statutory/regulatory/administrative prohibitions/restrictions

Indian

banks

–

Please refer to the Circular DBOD.No.BP.BC.89 /21.04.141/2008-09 dated December 1, 2008 on the captioned subject. In terms of paragraph 5 of the circular, if the foreign branches / foreign subsidiaries of the Indian banks propose to handle structured financial products, banks are required to obtain prior approval of the Reserve Bank for the purpose. 2. On a review, it has been decided that if foreign branches / subsidiaries of Indian banks propose to offer structured financial and derivative products that are not specifically permitted by the Reserve Bank in the domestic market, they may do so only at the established financial centers outside India like New York, London, Singapore, Hong Kong, Frankfurt, Dubai, etc. Banks should ensure that their foreign branches / subsidiaries, dealing with such products in foreign jurisdictions, have adequate knowledge, understanding, and risk management capability for handling such products. At other centers, banks may offer only those products that are specifically permitted in India. 3. The products that the foreign branches / subsidiaries of Indian banks offer at overseas location should be in compliance with host country regulations, with prior approval from their Board and appropriate authority in these foreign jurisdictions. Banks should continue to adhere to more stringent among the host and home regulations in respect of these products. In particular, banks should ensure that the suitability and appropriateness policy is strictly adhered to as mandated by the Reserve Bank and the host regulators. 4. It is reiterated that for undertaking activities by Indian banks‟ branches and subsidiaries abroad which are not permitted under the Banking Regulations Act, 1949 / respective Statute of the Public Sector Banks, banks should obtain from the RBI / Government of India necessary permission under Section 6 (1) (m) or 19 (1) (c) of the Banking Regulations Act, 1949, as the case may be, for undertaking such activities. Yours faithfully, (Rajesh Verma) Chief General Manager

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur RBI/2013-14/590 DPSS.CO.PD.No. 2366/02.14.006/2013-14 May 13, 2014 All Prepaid Payment Instrument Issuers, System Providers, System Participants and all other Prospective Prepaid Payment Instrument Issuers Madam / Dear Sir Issuance and Operation Revised Policy Guidelines

of

Pre-paid

Payment

Instruments

in

India

–

Consolidated

A reference is invited to our guidelines DPSS.CO.PD.No. 2074/02.14.006/2013-14 dated March 28, 2014 on the captioned subject. 2. On a review, it has been decided that Para 7.4 (Co-branded pre-paid payment instrument) of the Annex to Guidelines dated March 28, 2014 to be amended to read as follows: Existing provisions of Para 7.4 of Annex of Revised provisions of Para 7.4 of Annex of Guidelines Guidelines dated March 28, 2014 dated March 28, 2014 All persons authorized / approved to issue prepaid payment instruments are permitted to cobrand such instruments with the name/logos of financial institution/Government Organisation etc. for whose customers/beneficiaries such cobranded instruments are issued. The name of the issuer shall be visible prominently on the payment instrument. Banks/NBFCs/Other persons desirous of issuing such co-branded prepaid instruments may seek one time approval from Reserve Bank of India.

All persons authorized / approved to issue pre-paid payment instruments are permitted to cobrand such instruments with the name/logos of financial institution / Government Organisation etc. for whose customers/beneficiaries such co-branded instruments are issued. The name of the issuer shall be visible prominently on the payment instrument. NBFCs/Other persons desirous of issuing such co-branded prepaid instruments may seek one time approval from Reserve Bank of India. However, banks have been granted general permission to issue rupee denominated co-branded prepaid instruments subject to the terms and conditions as mentioned in the circular RBI/2012-13/325 DBOD.No.FSD.BC. 67/24.01.019/ 2012-13 dated December 12, 2012

3. Stakeholders are advised to take note of the above amendment. The revised consolidated guidelines on Prepaid Payment Instruments is placed at Annex. Yours faithfully, (Vijay Chugh) Chief General Manager

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur Annex Issuance and Operation of Pre-paid Payment Instruments in India – Consolidated Revised Policy Guidelines A. Purpose To provide a framework for the regulation and supervision of persons operating payment systems involved in the issuance of Pre-paid Payment Instruments (PPIs) in the country and to ensure development of this segment of the payment and settlement systems in a prudent and customer friendly manner. For the purpose of these guidelines, the term „persons‟ refers to „entities‟ authorized to issue prepaid payment instruments and „entities‟ proposing to issue pre-paid payment instruments. B. Classification Statutory Guidelines issued by Reserve Bank of India under Section 18 read with Section 10(2) of Payment & Settlement Systems Act, 2007, (Act 51 of 2007). C. Previous Guidelines consolidated This circular supersedes the instructions contained in the circulars issued on Prepaid Payment Instruments so far. D. Scope These guidelines lay down the eligibility criteria and the basic conditions for payment system operators involved in the issuance of Pre-paid Payment Instruments in the country. All persons authorised to operate payment systems and involved in the issuance of Pre-paid Payment Instruments in India shall comply with these guidelines. All persons proposing to operate payment systems and involved in the issuance of Pre-paid Payment Instruments shall seek authorization from the Department of Payment and Settlement Systems, Reserve Bank of India, under the Payment and Settlement Systems Act, 2007. E. Structure 1. Introduction 2. Definitions 3. Eligibility to issue PPI 4. Exemption 5. Capital requirements 6. Safeguards against money laundering (KYC/AML/CFT) provisions 7. Categories of pre-paid payment instruments 8. Deployment of Money collected 9. Issuance and reloading of pre-paid payment instruments 10. Validity 11. Transactions Limits 12. Redemption 13. Fraud prevention and Security standards 14. Customer Protection Issue 1. Introduction 1.1. Consequent to the passing of Payment and Settlement Systems, Act 2007, banks and non-bank entities have been issuing pre-paid payment instruments in the country after obtaining necessary approval / authorisation from Reserve Bank of India and operating within the guidelines issued by Reserve Bank of India in this regard.

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur The initial guidelines on “Issuance and Operation of PPIs” issued in April 2009 have been amended from time to time, taking into account the developments in the field and the progress made by PPI issuers. Given the number of amendments made in the past, it has become necessary to have all the instructions at one place. 1.2 Further, in view of the references received from PPI issuers on certain issues pertaining to the operations of PPIs, a comprehensive review of extant guidelines and instructions has also been carried out, in consultation with the stakeholders. These guidelines, covering both banks and non-bank persons, lay down the basic eligibility criteria and the conditions for operations such payment systems in the country. 2. Definitions 2.1 Issuer: Persons operating the payment systems issuing pre-paid payment instruments to individuals/organizations. The money so collected is used by these persons to make payment to the merchants who are part of the acceptance arrangement directly, or through a settlement arrangement. 2.2 Holder: Individuals/Organizations who acquire pre-paid payment instruments for purchase of goods and services, including financial services. 2.3 Pre-paid Payment Instruments: Pre-paid payment instruments are payment instruments that facilitate purchase of goods and services, including funds transfer, against the value stored on such instruments. The value stored on such instruments represents the value paid for by the holders by cash, by debit to a bank account, or by credit card. The prepaid instruments can be issued as smart cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers and any such instrument which can be used to access the pre-paid amount (collectively called Prepaid Payment Instruments hereafter). The pre-paid payment instruments that can be issued in the country are classified under three categories viz. (i) Closed system payment instruments (ii) Semiclosed system payment instruments and (iii) Open system payment instruments. 2.4 Closed System Payment Instruments: These are payment instruments issued by a person for facilitating the purchase of goods and services from him/it. These instruments do not permit cash withdrawal or redemption. As these instruments do not facilitate payments and settlement for third party services, issue and operation of such instruments are not classified as payment systems. 2.5 Semi-Closed System Payment Instruments: These are payment instruments which can be used for purchase of goods and services, including financial services at a group of clearly identified merchant locations/ establishments which have a specific contract with the issuer to accept the payment instruments. These instruments do not permit cash withdrawal or redemption by the holder. 2.6 Open System Payment Instruments: These are payment instruments which can be used for purchase of goods and services, including financial services like funds transfer at any card accepting merchant locations (point of sale terminals) and also permit cash withdrawal at ATMs / BCs. 2.7 Limits: All „limits‟ in the value of instruments stated in the guidelines, indicate the maximum value of such instruments that can be issued to any holder. 2.8 Merchants: The establishments who accept the PPIs issued by PPI issuer against the sale of goods and services.

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Delhi I Mumbai I Pune I Kanpur 3. Eligibility to issue PPI 3.1 Banks who comply with the eligibility criteria would be permitted to issue all categories of pre-paid payment instruments. 3.2 However, only those banks which have been permitted to provide Mobile Banking Transactions by the Reserve Bank of India shall be permitted to launch mobile based prepaid payment instruments (mobile wallets & mobile accounts). 3.3 Non-Banking Financial Companies (NBFCs) and other persons would be permitted to issue only closed and semi-closed system payment instruments, including mobile phone based pre-paid payment instruments. 4. Exemption 4.1 Foreign Exchange Pre-paid Payment Instruments: Persons authorized under Foreign Exchange Management Act (FEMA) to issue foreign exchange pre-paid payment instruments and where such persons issue such instruments as participants of payment systems authorised by the Reserve Bank of India, are exempt from the purview of these guidelines. The use of such payment instruments shall be limited to permissible current account transactions and subject to the prescribed limits under the Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time. 5. Capital Requirements 5.1 Banks and Non-Banking Financial Companies which comply with the Capital Adequacy requirements prescribed by Reserve Bank of India from time-to-time, shall be permitted to issue pre-paid payment instruments. 5.2 All other persons, seeking authorisation henceforth, shall have a minimum paid-up capital of Rs. 500 lakh and minimum positive net worth of Rs. 100 lakh at all the times. Necessary instructions, if any, for the existing PPI issuers for compliance of enhanced capital requirements will be notified separately. 5.3 Applicant companies having FDI/FII should meet the minimum capital requirement as applicable under Consolidated FDI policy guidelines of Government of India. 5.4 Only companies incorporated in India will be eligible to apply for authorisation. 6. Safeguards against Money Laundering (KYC/AML/CFT) Provisions 6.1 The guidelines on Know Your Customer/Anti-Money Laundering/Combating Financing of Terrorism guidelines issued by the Reserve Bank of India to banks, from time to time, shall apply mutatis mutandis to all the persons issuing pre-paid payment instruments. 6.2 As PPI issuers are operating a Payment System, provisions of Prevention of Money Laundering Act, 2002 and Rules framed thereunder, as amended from time to time, are also applicable to PPI issuers. Necessary systems shall be put in place to ensure compliance with these guidelines. 6.3 The use of pre-paid payment instruments for cross border transactions shall not be permitted except for the payment instruments provided at paragraph 4.1 of the guidelines. -12-

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Delhi I Mumbai I Pune I Kanpur 6.4 Persons issuing pre-paid payment instruments shall maintain a log of all the transactions undertaken using these instruments. This data should be available for scrutiny by the Reserve Bank or any other agency / agencies as may be advised by the Reserve Bank. These persons shall also file Suspicious Transaction Report (STR) to Financial Intelligence Unit – India (FIU-IND). 7. Categories of Pre-paid Payment Instruments 7.1 The maximum value of any pre-paid payment instruments (where specific limits have not been prescribed including the amount transferred as per paragraph 10.2) shall not exceed Rs 50,000/-. 7.2 The following types of semi closed pre-paid payment instruments can be issued on carrying out Customer Due Diligence as detailed:i.

upto Rs.10,000/- by accepting minimum details of the customer provided the amount outstanding at any point of time does not exceed Rs 10,000/- and the total value of reloads during any given month also does not exceed Rs 10,000/-. These can be issued only in electronic form;

ii.

from Rs.10,001/- to Rs.50,000/- by accepting any „officially valid document‟ defined under Rule 2(d) of the PML Rules 2005, as amended from time to time. Such PPIs can be issued only in electronic form and should be non-reloadable in nature;

iii.

upto Rs.50,000/- with full KYC and can be reloadable in nature. The balance in the PPI should not exceed Rs.50,000/- at any point of time.

7.3 Banks can issue open pre-paid payment instrument after full KYC in addition to semi closed PPIs listed above. 7.4 Co-branded pre-paid payment instrument All persons authorized / approved to issue pre-paid payment instruments are permitted to cobrand such instruments with the name/logos of financial institution / Government Organisation etc. for whose customers/beneficiaries such co-branded instruments are issued. The name of the issuer shall be visible prominently on the payment instrument. NBFCs/Other persons desirous of issuing such co-branded prepaid instruments may seek one time approval from Reserve Bank of India. However, banks have been granted general permission to issue rupee denominated cobranded prepaid instruments subject to the terms and conditions as mentioned in the circular RBI/2012-13/325 DBOD.No.FSD.BC. 67/24.01.019/2012-13 dated December 12, 2012 7.5 Prepaid Gift instrument issuance by Banks, NBFCs and other persons Banks, NBFCs and other persons are permitted to issue pre-paid gift instruments subject to the following conditions: a. b. c. d.

The maximum validity of the pre-paid gift instruments shall be one year. Maximum value of each such payment instrument shall not exceed Rs. 50,000/-. These instruments shall not be reloadable. Cash withdrawal shall not be permitted for such instruments.

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Delhi I Mumbai I Pune I Kanpur e.

f.

g.

Full KYC of the purchasers of such instruments shall be maintained. (Separate KYC would not be required in cases of customers who are issued such instruments against debit to their bank accounts in India which are fully KYC compliant). The issuer shall maintain the details of the persons to whom such instruments have been issued and make available the same on demand. The issuer shall also ensure that full details of the ultimate beneficiary are obtained for furnishing to the regulator or Government, as and when requested. Entities may adopt a risk based approach, duly approved by their Board, in deciding the number of such instruments which can be issued to a customer, transaction limits etc.

7.6 Pre-paid Instruments issued by banks to Government Organizations for onward issuance to the beneficiaries of Government sponsored schemes. Banks are permitted to issue pre-paid instruments to Government Organisations for onward issuance to the beneficiaries of Government sponsored schemes, subject to the following conditions:a.

Verification of the identity of the beneficiaries shall be the responsibility of the Government Organisations. b. These payment instruments shall be loaded /reloaded only by debit to a bank account, maintained by the Government Organizations with the same bank. c. The maximum value of each such payment instrument shall not exceed Rs. 50,000/-. d. Banks shall facilitate transfer of funds from such payment instruments to a regular bank account of the beneficiary, if requested for. e. The banks shall be responsible for all customer service aspects related to these instruments. 7.7 Pre-paid Instruments issued by banks to other Financial Institutions for credit of onetime/periodic payments by these organisations to their customers. Banks are permitted to issue prepaid instruments to other financial institutions for credit of one-time/periodic payments by these organisations to their customers subject to the following conditions:a.

Banks shall satisfy themselves about the adequacy of the KYC practices followed by these organisations before issuance of these instruments. b. These payment instruments shall be loaded /reloaded only by debit to a bank account, maintained by the financial institutions with the same bank. c. The maximum value of such payment instrument shall not exceed Rs. 50,000/-. d. Banks shall facilitate transfer of funds from such payment instruments to a regular bank account of the beneficiary, if asked for. e. The banks shall be responsible for all customer service aspects related to these instruments. 7.8 Prepaid Instruments issued by banks for credit of cross border inward remittance. Banks are permitted to issue prepaid instruments to principal agents approved under the Money Transfer Service Scheme (MTSS) of the Reserve Bank of India or directly to the beneficiary under the scheme for loading of the funds from inward remittances, subject to the following conditions:a. Banks shall ensure proper identity of the beneficiaries while directly issuing such prepaid payment instruments to them. b. Banks shall satisfy themselves about the systems followed by the agents for identifying the beneficiaries, before issuance of these instruments. -14-

Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur c. The card shall be loaded only with the remittance proceeds received under the MTSS guidelines. d. The maximum value of such payment instrument shall not exceed Rs. 50,000/-. e. Splitting of single credits among different modes of payment shall not be permitted. Any amount received in excess of Rs. 50,000/- under MTSS should be paid by credit to a bank account/ f. Banks shall facilitate transfer of funds from such payment instruments to a regular bank account of the beneficiary, if asked for. g. The banks shall be responsible for all customer service aspects related to these instruments. 7.9 Pre-paid Instruments issued by banks to Corporates for onward issuance to their employees Banks are permitted to issue prepaid instruments to corporates for onward issuance to their employees subject to the following conditions:a.

Prepaid payment instruments can be issued only to corporate entities listed in any of the stock exchanges in India. b. Verification of the identity of the employee shall be the responsibility of the concerned corporate. The bank should put in place proper systems to capture and maintain details of the employees to whom the cards are issued by the corporate along with copies of photograph and identity proof of such employees. The corporate is also required to make available details of bank accounts (if any) of the employees to the bank. c. Banks may ensure that the list of authorized signatories approved by the Board of the corporate entity is taken on record and requests from such authorized persons are only accepted for the purpose of loading/activating the prepaid payment instruments. d. These prepaid payment instruments shall be loaded / reloaded only by debit to the bank account, which are subject to full KYC, maintained by the corporate with the same bank. e. The maximum value outstanding on individual prepaid payment instruments at any point of time shall not exceed Rs. 50,000/-. f. Banks shall facilitate transfer of funds from such prepaid payment instruments to a regular bank account of the concerned employee, if requested for. g. The banks shall be responsible for all customer service aspects related to these instruments. 8. Deployment of Money Collected 8.1 The money collected against issuance of pre-paid payment instruments at a point of time could be substantial. Further, the turnover of funds may also be rapid. The confidence of public and merchant establishments on prepaid instruments schemes depends on certainty and timeliness of settlement of claims arising from use of such instruments. To ensure timely settlement, the issuers shall invest the funds collected only as provided here-in. 8.2 For the schemes operated by banks, the outstanding balance shall be part of the „net demand and time liabilities‟ for the purpose of maintenance of reserve requirements. This position will be computed on the basis of the balances appearing in the books of the bank as on the date of reporting. 8.3 Other non-bank persons issuing payment instruments are required to maintain their outstanding balance in an escrow account with any scheduled commercial bank subject to the following conditions:(i) The escrow balance must be necessarily maintained with only one scheduled commercial bank at any point of time. (ii) In case there is a need to shift the escrow account from one bank to another, same may be effected in a time-bound manner without unduly impacting the payment cycle to the merchants. The migration should be completed in the minimum possible time and with the prior approval of RBI. -15-

Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur (iii) The balance in the escrow account should, at no time, be lower than the value of outstanding PPIs and payments due to merchants. While as far as possible PPI issuers should ensure immediate credit of funds to escrow on sale / reload of PPIs to end-users, such credit to escrow account should not be later than the close of business day (on which the PPI has been sold / reloaded) under any circumstances. (iv) The amount so maintained in the escrow account shall be used only for making payments to the participating merchant establishments and other permitted payments. Following debits and credits will only be permitted from the escrow account: Credits a. b.

Payments received towards sale / reload of PPIs, including at agent locations Refunds received for failed / disputed / returned / cancelled transactions.

Debits c. Payments to various merchants/service providers towards reimbursement of claims received from them d. Payment to sponsor bank for processing funds transfer instructions received from PPI holders as permitted by RBI from time to time. e. Payment towards applicable Government taxes (received along with PPI sale/reload amount from the buyers) f. Refunds towards cancellation of transactions in a PPI in case of PPIs loaded /reloaded erroneously or through fraudulent means (on establishment of erroneous transfer /fraud). The funds have to be credited back to the same source from where these were received. These funds are not to be forfeited till the disposal of the case. g. Any other payment due to the PPI issuer in the normal course of operating the PPI business (for instance, service charges, forfeited amount, commissions) h. Any other debit as directed by the regulator / courts / law enforcement agencies. Note: (1) The payment towards service charges, commission and forfeited amount shall be at predetermined rates/frequency. Such transfers shall only be effected to a designated bank account of the PPI issuer as indicated in the agreement with the bank where escrow account is maintained. (2) All these provisions should be part of Service Level Agreement that will be signed between the PPI issuer and the bank maintaining escrow account. (v) PPI issuer will be required to submit the list of merchants acquired by it to the bank and update the same from time to time. The bank will be required to ensure that payments are to be made only to eligible merchants / purposes. There should be an exclusive clause in the agreement signed between the PPI issuer and bank maintaining escrow account towards usage of balance in escrow account only for the purposes mentioned above. (vi) Further, there should also be an exclusive clause in the agreement signed/to be signed between the issuer/operator and the bank maintaining „escrow account‟, which would enable the bank to use the money in the 'escrow account' only for making payment to the merchants/holders in preference to the other creditors in the event of liquidation/bankruptcy of the issuer. Accordingly, all the banks are advised to add the following paragraph in the agreement entered into with the issuer/operator of prepaid payment instruments for operating escrow account:

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur "It is expressly agreed and confirmed that the amount lying in the escrow account is charged unto the holders of the prepaid payment instruments and the merchant establishments to pay the dues arising out of usage of the prepaid payment instruments or otherwise. Provided further, that the amount in the escrow account shall be deemed to be a security charged unto the participating merchant establishments or holders of the prepaid payment instruments issued by the issuer and to be utilised to redeem the dues arising out of usage of the said prepaid payment instruments in the first instance or otherwise to be paid to the holders of the same on surrender of the instrument and settlement of the dues in the event of the scheme being wound up or being directed by the Reserve Bank of India to be discontinued, as provided for in the operative guidelines issued by the Reserve Bank on April 27, 2009 on Issuance and Operation of Pre-paid Payment Instruments, as amended from time to time." (vii) Banks maintaining the escrow account as above are, therefore, advised to necessarily record the charge of the holders of the pre-paid payment instruments and/or the merchant establishments with the Registrar of Companies under Section 125 of the Companies Act, 1956. (viii) A certificate, as prescribed by the Bank from time to time is required to be submitted by the authorised entities, signed by the auditor(s), on a quarterly basis. Such certificate shall be submitted certifying that the person has been maintaining adequate balance in the account to cover the outstanding value of prepaid payment instruments issued. The certificates shall be submitted within a fortnight from the end of the quarter to which it pertains. Format of the certificate is attached. (ix) The person shall also submit an annual certificate, as above, coinciding with the accounting year of the entity to the Reserve Bank of India. (x)

Adequate records indicating the daily position of the value of instruments outstanding vis-à-vis balances maintained with the banks in the escrow accounts shall be made available for scrutiny to the Reserve Bank or the bank where the account is maintained on demand.

(xi) Settlement of funds with merchants should not be co-mingled with other business handled, if any by the PPI issuer. (xii) NO interest is payable by the bank on such balances. 8.4 As an exception to the above (8.3 xii), the entity can enter into an agreement with the bank where escrow account is maintained, to transfer "core portion" of the amount, in the escrow account to a separate account on which interest is payable, subject to the following:i) ii)

iii) iv) v)

The bank shall satisfy itself that the amount deposited represents the "core portion" after due verification of necessary documents. The amount shall be linked to the escrow account, i.e. the amounts held in the interest bearing account shall be available to the bank, to meet payment requirements of the entity, in case of any shortfall in the escrow account. This facility is permissible to persons who have been in business for at least ONE YEAR and whose accounts have been duly audited for the full accounting year. NO LOAN is permissible against such deposits. Banks shall not issue any deposit receipts or mark any lien on the amount held in such form of deposits. Core portion as calculated above will remain linked to the escrow account. The escrow balance and core portion maintained should be clearly disclosed in the Auditors certificates submitted to Reserve Bank of India on quarterly and annual basis. -17-

Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur Note: For the purpose of these guidelines "Core Portion" may be computed as under:Step 1: Compute lowest daily outstanding balance (LB) on a fortnightly (FN) basis, for one year (26 fortnights) from the preceding month. Step 2: Calculate the average of the lowest fortnightly outstanding balances [(LB1 of FN1+LB2 of FN2+ ........+ LB26 of FN26) divided by26]. Step 3: The average balance so computed represents the "Core Portion" eligible to earn interest. 9. Issuance and reloading of Pre-paid Payment Instruments 9.1 All persons authorised to issue pre-paid payment instruments by Reserve Bank of India are permitted to issue reloadable or non-reloadable pre-paid payment instruments depending upon the permissible category of PPIs. 9.2 Banks are permitted to issue and reload such payment instruments at their branches and ATMs against payment by cash/debit to bank account/credit card and through their business correspondents appointed as per the guidelines issued by the Reserve Bank in this regard. Banks are also permitted to issue and reload semi-closed prepaid payment Instruments through agents (other than BCs) by payment by cash/debit to bank account /credit card subject to the following conditions:i) The issuer may carry out proper due diligence of the persons before appointing them as agents for sale of such instruments. ii) The issuer shall be responsible for all their payment instruments issued by their agents. iii) The pre-paid payment instrument issuers shall be responsible as the principal for all the acts of omission or commission of their agents. 9.3 Other persons shall be permitted to issue and reload such payment instruments through their authorised outlets or through their agents by payment by cash/debit to bank account /credit card subject to the following conditions:i) The issuer may carry out proper due diligence of the persons appointed as authorized agents for sale of such instruments. ii) The issuer shall be responsible for all their payment instruments issued by the appointed agents. iii) The pre-paid payment instrument issuers shall be responsible as the principal for all the acts of omission or commission of their agents. 10. Validity 10.1 All pre-paid payment instruments issued in the country shall have a minimum validity period of six months from the date of activation/issuance to the holder. 10.2 In the case of non-reloadable pre-paid payment instruments, the transfer of outstanding amount at the expiry of the payment instrument to a new similar payment instrument of the same issuer, purchased by the holder may be permitted. 10.3 PPI issuers shall caution the PPI holder at reasonable intervals, during the 30 days‟ period prior to expiry of validity period of PPI, before forfeiting outstanding balances in the PPI, if any. The caution advice shall be sent by SMS / e-mail / post or by any other means in the language preferred by the holder indicated at the time of onboarding the customer (sale of PPI). Further, the information about expiry period as well as forfeiture policy should be made known to the customer at the time of sale / reload of the PPI, and should be clearly enunciated in the terms and conditions of sale of PPI. Where applicable, it should also be clearly outlined on the website of the issuer.

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur 11. Transactions Limits 11.1 There is no separate limit on purchase of goods and services using PPIs and the holder is allowed to use the PPI for these purposes within the overall PPI limit applicable. 11.2 Transaction limits and monthly caps are, however, applicable on funds transfers permitted in PPIs under Domestic Money Transfer (DMT) Guidelines. PPI issuers should ensure that all incoming funds to a PPI under DMT are within the overall permissible limits for that category of PPI. 11.3 Refunds in case of failed / returned / rejected / cancelled transactions may be applied to the respective PPI account immediately even if such application of funds results in exceeding the limits prescribed for that category of PPI. However, PPI issuers will be required to maintain complete details of such returns / refunds etc. and be in readiness to provide them as and when called for. Further, PPIs issuers will be required to put in place necessary systems that enable them to monitor frequent instances of refunds taking in place in specific accounts and if necessary / called for be in a position to substantiate with proof for audit purposes to the regulator. 12. Redemption 12.1 The issuer of such instruments shall not dishonour customer instructions for payments/transfer of money, at approved locations, if there is sufficient balance outstanding against the instrument. 12.2 The holders of pre-paid payment instrument shall be permitted to redeem the balance outstanding within the expiry date, if for any reason the scheme is being wound-up or is directed by the Reserve Bank to be discontinued. 12.3 Where redemption is provided as at 10.2 above, the redemption value shall not be in excess of the amount outstanding or the face value (loading limit) of the instrument. 13. Fraud prevention and security standards 13.1 The pre-paid payment instrument issuers shall put in place adequate information and data security infrastructure and systems for prevention and detection of frauds. It is necessary to have a centralized database/ MIS by the issuer to prevent multiple purchase of payment instruments at different locations, leading to circumvention of limits, if any, prescribed for such payment instruments. 14. Customer Protection Issue 14.1 All pre-paid payment instrument issuers shall disclose all important terms and conditions in clear and simple language (preferably in English, Hindi and the local language) comprehensible to the holders while issuing the instruments. These disclosures shall include: i) All charges and fees associated with the use of the instrument. ii) The expiry period and the terms and conditions pertaining to expiration of the instrument. iii) The customer service telephone numbers and website URL. 14.2 The non-bank PPI issuer shall put in place an effective mechanism for redressal of customer complaints along with escalation matrix and publicise the same for the benefit of customers. Besides reporting of customer complaints in the format and frequency as already mandated, PPI issuers are also required to report frauds, if any, involving the PPIs issued by them on a quarterly basis (or earlier). Instances of fraud along with the modusoperandi adopted by the perpetrators, if known and analysed, may be reported separately. 14.3 In case of pre-paid payment instruments issued by banks, customers shall have recourse to Banking Ombudsman Scheme for grievance redressal. *********** -19-

Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur Changes effected vide this circular: Section Capital Requirement for the PPI issuers Who can issue PPIs Operation of Escrow account

Old provisions Minimum paid-up capital of Rs 100 lakhs and positive net owned funds --

Credits / Debits permitted from Escrow

The amount so maintained shall be used only for making payments to the participating merchant establishments.

--

Revised Minimum paid-up capital of Rs. 500 lakh and minimum positive net worth of Rs.100 lakh at all the times. Only companies incorporated in India will be eligible to apply for authorization The escrow balance must be necessarily maintained with only one scheduled commercial bank at any point of time. The migration from one bank to another, if case of need should be completed in the minimum possible time and with the prior approval of RBI. Following debits and credits will only be permitted from the escrow account: Credits a. Payments received towards sale / reload of PPIs, including at agent locations b. Refunds received for failed /disputed / returned transactions. Debits a. Payments to various merchants/service providers towards reimbursement of claims received from them b. Payment to sponsor bank for processing funds transfer instructions received from PPI holders as permitted by RBI from time to time. c. Payment towards applicable Government taxes (received along with PPI sale/reload amount from the buyers) d. Refunds towards cancellation of PPI in case of PPIs loaded / reloaded erroneously or through fraudulent means (on establishment of erroneous transfer /fraud). The funds have to be credited back to the same source from where these were received. These funds are not to be forfeited till the disposal of the case. e. Any other payment due to the PPI issuer in the normal course of operating the PPI business (for

Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur

PPI funds to be kept separate and distinct Cautioning PPI holder about expiry of PPIs

----

Treatment of funds received due to failed / returned / rejected transactions

----

instance, service charges, forfeited amount, commissions etc.) f. Any other debit as directed by the regulator / courts / law enforcement agencies. Settlement of funds with merchants should not be co-mingled with other business handled, if any, by the PPI issuer.

PPI holder to be cautioned 15 days before expiry of PPI before forfeiting the unspent balance in the PPI, if any.

Caution PPI holder at reasonable intervals, during the 30 days‟ period prior to expiry of validity period of PPI, before forfeiting outstanding balances in the PPI, if any; caution advice shall be sent by SMS / email / post or by any other means in the language preferred by the holder; Information about expiry period as well as forfeiture policy should be made known to the customer at the time of sale / reload of the PPI and also clearly outlined on the website of the issuer, where applicable. Refunds in case of failed / returned /rejected transactions may be applied to the respective PPI account immediately even if such application of funds results in exceeding the limits prescribed for that category of PPI; PPI issuers to maintain complete details of such returns / refunds etc.

Quarterly certificate on balance is Escrow Account by Auditor Sl. No. 1. 2. 3.

4. 5.

Items

Comments from the Auditor‟s

Name & Address of the entity Name & Address of the auditor Escrow Bank details like

Name of the Bank Branch Address Account No. etc. Outstanding Liability of the entity at the beginning of the quarter Debits to Escrow account during the quarter i. Payments to various merchants/service providers towards reimbursement of claims received from them j. Payment to sponsor bank for processing funds transfer instructions received from PPI holders as permitted by RBI from time to time. k. Payment towards applicable Government taxes l. Refunds towards cancellation of transactions in a PPI in case of PPIs loaded

Rs. Rs. Rs. Rs. Rs.

Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur

6.

7. 8.

9.

9. 10. 11. 12.

/ reloaded erroneously or through fraudulent means. m. Any other payment due to the PPI issuer in the normal course of operating the PPI business (for instance, service charges, forfeited amount, commissions etc.) n. Any other debit as directed by the regulator / courts / law enforcement agencies. Credits to Escrow account during the quarter a. Payments received towards sale / reload of PPIs, including at agent locations b. Refunds received for failed / disputed / returned /cancelled transactions. Escrow balance at the end of the quarter Whether the escrow account had sufficient balance to cover the outstanding liability of the entity on daily basis ? If No, (i) number of days of shortfall in balance (ii) Amount short in escrow account (i) Minimum balance in escrow account during the quarter (including core portion) (ii) Maximum balance in the escrow account during the quarter (including core portion) Whether the Core portion of the escrow balance is being maintained with the same bank. Quarterly Average of Core balance. Whether interest is being earned by the entity on the core balance. Number of merchants registered for payments (i) At the beginning of quarter (ii) At the end of quarter

Rs.

Rs.

Rs. Rs.

Other information: Average time taken for payments to merchants Share of Funds transfer in total payments made

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur RBI/2013-14/591 RPCD.CO.Plan. BC 101/04.09.01/ 2013-14 May 15, 2014 The Chairman/ Managing Director/ Chief Executive Officer [All scheduled commercial banks (excluding Regional Rural Banks)] Madam/Dear Sir, Treatment of RIDF and certain other funds under priority sector It has been decided to include the outstanding deposits placed by scheduled commercial banks under Rural Infrastructure Development Fund (RIDF) and certain other funds established with NABARD, on account of their shortfall in lending to priority sector as part of indirect agriculture under priority sector classification. 2. Accordingly, the outstanding deposits as on March 31st of the current year under RIDF, Warehouse Infrastructure Fund, Short Term Co-operative Rural Credit Refinance Fund and Short Term RRB Fund with NABARD will be treated as part of indirect agriculture and will count towards overall priority sector target achievement. The outstanding deposits under the above funds with NABARD as on preceding March 31st will form part of Adjusted Net Bank Credit. 3. These guidelines are applicable with effect from March 31, 2014. The paragraph (II) (iii) of the master circular RPCD.CO.Plan.BC 9 /04.09.01/2013-14 July 01, 2013 on computation of ANBC is amended accordingly. Yours faithfully, (T V Rao) Deputy General Manager

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur RBI/2013-14/592 UBD.BPD.Cir.No.62/13.03.000/2013-14 May 15, 2014 The Chief Executive Officer All Primary (Urban) Co-operative Banks Dear Sir / Madam Levy of Penal Charges on Non-Maintenance of Minimum Balances in Inoperative Accounts Please refer to Part B of the First Bi-monthly Monetary Policy Statement 2014-15 announced on April 1, 2014, proposing certain measures towards consumer protection such as non-levy of penal charges for non-maintenance of minimum balance in the inoperative accounts. 2. In this connection, a reference is invited to our circular UBD.(PCB).Cir.No.54/09.39.000/05-06 dated May 26, 2006 in which urban cooperative banks were advised to display and update, on their website, the details of various service charges including minimum balance to be maintained in savings bank accounts and charges, if any, for non-maintenance thereof. 3. Further, in terms of Para 3 of our Circular UBD.BPD.Cir.5/13.01.000/2012-13 dated August 17, 2012 on 'Financial Inclusion-Access to Banking Services - Basic Savings Bank Deposit Accounts' it was advised to banks that no charge should be levied for non-operation / activation of Basic Savings Bank Deposit Accounts (BSBDAs). 4. It is advised that henceforth banks are not permitted to levy penal charges for non-maintenance of minimum balances in any inoperative account. Yours faithfully, (A.K.Bera) Principal Chief General Manager

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur RBI/2013-14/593 UBD.CO.BPD.(PCB) Cir No. 63/13.05.000/2013-14 May 16, 2014 The Chief Executive Officers All Primary (Urban) Co-operative Banks Madam / Dear Sir, Undertaking of activity by the Urban Cooperative Banks (UCBs) as PAN Service Agent (PSA) for providing PAN issuance services to its customers by entering into tie-up with authorized Agencies Please refer to circular UBD.CO.BPD.(PCB).Cir.No.38/13.05.000/2013-14 dated November 14, 2013 wherein Financially Sound and Well Managed UCBs as defined in our circular UBD.CO.LS.(PCB). Cir.No.24/07.01.000/2013-14 dated October 1, 2013 were permitted to act as PAN Service Agents (PSA) by entering into a tie-up with UTI Infrastructure and Technology Services Ltd with prior approval of the Reserve Bank. 2. It has now been decided that Financially Sound and Well Managed UCBs, as defined in the circular ibid may act as PAN Service Agents (PSA) by entering into a tie-up with NSDL e-Governance Infrastructure Limited or with any other agency authorized by the Income Tax Department, Government of India for this purpose with prior approval of the Reserve Bank. 3. All other terms and conditions as set out in our circular dated November 14, 2013 remain the same. Yours faithfully, (P K Arora) General Manager

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur RBI/2013-14/594 A.P. (DIR Series) Circular No.130 May 16, 2014 To All Category – I Authorised Dealer Banks Madam/Sir, External Commercial Borrowings (ECB) from Foreign Equity Holder - Simplification of Procedure Attention of Authorised Dealer Category – I (AD Category – I) banks is invited to the A.P. (DIR Series) Circular No. 05 dated August 01, 2005 as amended from time to time relating to the External Commercial Borrowings (ECB). Attention is also invited to A. P. (DIR Series) Circular No. 11 dated September 07, 2011, A.P. (DIR Series) Circular No. 29 dated September 26, 2011, and A.P. (DIR Series) Circular No. 31 dated September 04, 2013. 2. As per the extant ECB policy, ECBs from direct foreign equity holders (FEHs) are considered both under the automatic and the approval routes, as the case may be. ECBs from indirect equity holders and group companies and ECBs from direct FEH for general corporate purpose are, however, considered under the approval route. Further, any request for change of the ECB lender in case of FEH requires RBI‟s approval. 3. As a measure of simplification of the existing procedure, it has been decided to delegate powers to AD banks to approve the following cases under the automatic route: i.

Proposals for raising ECB by companies belonging to manufacturing, infrastructure, hotels, hospitals and software sectors from indirect equity holders and group companies.

ii.

Proposals for raising ECB for companies in miscellaneous services from direct / indirect equity holders and group companies. Miscellaneous services mean companies engaged in training activities (but not educational institutes), research and development activities and companies supporting infrastructure sector. Companies doing trading business, companies providing logistics services, financial services and consultancy services are, however, not covered under the facility.

iii.

Proposals for raising ECB by companies belonging to manufacturing, infrastructure, hotels, hospitals and software sectors for general corporate purpose.ECB for general corporate purpose (which includes working capital financing) is, however, permitted only from direct equity holder.

iv.

Proposals involving change of lender when the ECB is from FEH – direct / indirect equity holders and group company.

4. All other terms and conditions stipulated in the relative circulars shall continue to be applicable. 5. Other aspects of the ECB policy such as eligible borrower, recognised lender, permitted end-use, amount of ECB, all-in-cost, average maturity period, pre-payment, ECB liability:equity ratio, refinance of existing ECB, reporting arrangements, etc. shall remain unchanged. 6. These changes will come into force with immediate effect.

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur 7. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers. 8. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (Rudra Narayan Kar) Chief General Manager-in-Charge

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur

CUSTOMS UPDATES [TO BE PUBLISHED IN THE GAZETTE OF INDIA, PART-II, SECTION 3, SUB-SECTION (ii), EXTRAORDINARY] GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS Notification No. 41/2014 - Customs (N.T.) Dated the 15th May, 2014 25 Vaisakha, 1936(SAKA) S.O. (E). – In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in super session of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.38/2014-CUSTOMS (N.T.), dated the 1st May, 2014 vide number S.O. (E), dated the 1st May, 2014, except as respects things done or omitted to be done before such supersession, the Central Board of Excise and Customs hereby determines that the rate of exchange of conversion of each of the foreign currency specified in column (2) of each of Schedule I and Schedule II annexed hereto into Indian currency or vice versa shall, with effect from 16th May, 2014 be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the said section, relating to imported and export goods. SCHEDULE-I S.No.

Foreign Currency

(1)

(2)

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

Australian Dollar Bahrain Dinar Canadian Dollar Danish Kroner EURO Hong Kong Dollar Kuwait Dinar New Zealand Dollar Norwegian Kroner Pound Sterling Singapore Dollar South African Rand Saudi Arabian Riyal Swedish Kroner Swiss Franc UAE Dirham US Dollar

Rate of exchange of one unit of foreign currency equivalent to Indian rupees (3) (a) (For Imported Goods) 56.50 162.70 55.55 11.15 82.80 7.75 217.90 52.30 10.20 101.15 48.20 6.00 16.35 9.25 67.90 16.70 60.10

(b) (For Export Goods) 55.10 153.70 54.10 10.80 80.85 7.60 205.45 51.00 9.90 98.85 47.10 5.60 15.45 8.95 66.25 15.80 59.10

Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur SCHEDULE-II S.No.

Foreign Currency

(1)

1. 2.

(2)

Japanese Yen Kenya Shilling

Rate of exchange of 100 units of foreign currency equivalent to Indian rupees (3) (a) (b) (For Imported Goods) (For Export Goods) 59.25 57.80 70.35 66.30

[F.No.468/01/2014-Cus.V]

(SATYAJIT MOHANTY) Director (ICD) Tele: 2309 3380

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART-II, SECTION-3, SUB-SECTION (ii)] Government of India Ministry of Finance (Department of Revenue) (Central Board of Excise and Customs) Notification No. 42/2014-CUSTOMS (N. T.) New Delhi, 15th May, 2014 25 Vaisakha, 1936 (SAKA) S.O. … (E).– In exercise of the powers conferred by sub-section (2) of section 14 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise & Customs, being satisfied that it is necessary and expedient so to do, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 36/2001-Customs (N.T.), dated the 3rd August, 2001, published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide number S. O. 748 (E), dated the 3rd August, 2001, namely:In the said notification, for TABLE-1, TABLE-2, and TABLE-3 the following Tables shall be substituted namely:“TABLE-1 Sl. No. (1) 1 2 3 4 5 6 7 8 9

Chapter/ heading/ subheading/tariff item (2) 1511 10 00 1511 90 10 1511 90 90 1511 10 00 1511 90 20 1511 90 90 1507 10 00 7404 00 22 1207 91 00

Description of goods (3) Crude Palm Oil RBD Palm Oil Others – Palm Oil Crude Palmolein RBD Palmolein Others – Palmolein Crude Soyabean Oil Brass Scrap (all grades) Poppy seeds

Tariff value US $ (Per Metric Tonne) (4) 905 938 922 946 949 948 946 3891 3255

TABLE-2 Sl. No. (1) 1

Chapter/ heading/ subheading/tariff item (2) 71 or 98

2

71 or 98

Description of goods (3) Gold, in any form, in respect of which the benefit of entries at serial number 321 and 323 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed Silver, in any form, in respect of which the benefit of entries at serial number 322 and 324 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed

Tariff value (US $) (4) 424 per 10 grams

650 per kilogram

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Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015

Delhi I Mumbai I Pune I Kanpur TABLE-3 Sl. No.

Chapter/ heading/ subheading/tariff item

Description of goods

(1) 1

(2) 080280

(3) Areca nuts

Tariff value (US $ Per Metric Tons ) (4) 1908” [F. No. 467/01/2014-Cus-5]

(SATYAJIT MOHANTY) Director (ICD) Note: - The principal notification was published in the Gazette of India, Extraordinary, Part-II, Section-3, Subsection (ii), vide Notification No. 36/2001–Customs (N.T.), dated the 3rd August, 2001, vide number S. O. 748 (E), dated the 3rd August, 2001 and was last amended vide Notification No. 36/2014-Customs (N.T.), dated the 30th April, 2014, published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide number S. O 1184 (E) Dated, the 30th April, 2014.

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Delhi I Mumbai I Pune I Kanpur [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No.20/2014-Customs (ADD) New Delhi, dated the 12th May, 2014 G.S.R. (E).-Whereas, the designated authority vide notification number 15/04/2014-DGAD, dated the 17th April, 2014, published in Gazette of India, Extraordinary, Part I, Section 1, dated the 17th April, 2014, have initiated review, in terms of sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975) and in pursuance of rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the said rules), in the matter of continuation of anti-dumping duty on “Cold Rolled Flat Products of Stainless Steel” falling under the heading 7219 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating in, or exported from, the People‟s Republic of China, Korea RP, European Union, South Africa, Taiwan (Chinese Taipei), Thailand and United States of America (USA) imposed vide notification of the Government of India in the Ministry of Finance (Department of Revenue), notification No. 14/2010-Customs, dated the 20th February 2010, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 95 (E), dated the 20th February, 2010, and have requested for extension of anti-dumping duty for a further period of one year, in terms of sub-section (5) of Section 9A of the said Customs Tariff Act; Now, therefore, in exercise of the powers conferred by sub-sections (1) and (5) of Section 9A of the said Customs Tariff Act and in pursuance of Rule 23 of the said Rules, the Central Government hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 14/2010-Customs, dated the 20th February, 2010, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 95(E), dated the 20th February, 2010, namely: In the said notification, after Paragraph 2, the following shall be inserted, namely:“3. Notwithstanding anything contained in Paragraph 2 above, this notification shall remain in force up to and inclusive of 21st April, 2015 unless revoked earlier.” [F. No.354/87/2009-TRU (Pt-III)] (Akshay Joshi) Under Secretary to the Government of India Note.- The principal notification number 14/2010-Customs, dated the 20th February, 2010 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 95 (E), dated the 20th February, 2010 and was last amended vide notification No. 86/2011-Customs, dated the 6th September, 2011 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 663 (E), dated the 6th September, 2011.

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Delhi I Mumbai I Pune I Kanpur PS.: This compilation provides for the updates available on respective websites till May 17, 2014. DISCLAIMER The materials and information contained herein are a compilation of relevant news update from various official websites. This effort is being made by BMC to provide general information on a particular subject and is not exhaustive treatment of such subjects. It should neither be regarded as comprehensive nor sufficient for taking decisions, nor should it be used in place of professional advice. This update is for private circulation only. Although our endeavor is to provide accurate & timely information, there can be no guarantee as of the date it is received or that it will continue to be accurate in future. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this presentation, as it is just a compilation done with an aim to provide assistance and saving time of professionals. Edited and Compiled By: Team BMC

Corporate Office: 63/12, 1st Floor, Main Rama Road, New Delhi – 110015