Tuesday, 1 December 2015
Friday, 27 November 2015
Finance Minister’s Budget announcement – phasing out plan of deductions under the Income-tax Act – reg.
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to Schedule 5 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA.20/2000- RB dated May 3, 2000, as amended from time to time and toA.P. (DIR Series) Circular No. 71 dated February 3, 2015 and A. P. (DIR Series) Circular No.73 dated February 6, 2015 in terms of which all future investments by Foreign Portfolio Investors (FPI) in NCDs/bonds shall be required to be made in securities with a minimum residual maturity of three years.
2. On a review, it has been decided to permit FPI to acquire NCDs/bonds, which are under default, either fully or partly, in the repayment of principal on maturity or principal installment in the case of amortising bond. The revised maturity period of such NCDs/bonds, restructured based on negotiations with the issuing Indian company, should be three years or more.
3. The FPI which propose to acquire such NCDs/bonds under default should disclose to the Debenture Trustees the terms of their offer to the existing debenture holders / beneficial owners from whom they are acquiring. Such investment should be within the overall limit prescribed for corporate debt from time to time (currently Rs. 2443.23 billion). All other existing conditions for investment by FPIs in the debt market remain unchanged.
4. 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. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
Wednesday, 25 November 2015
RBI grants ‘in-principle’ approval to NPCI to function as the central unit for Bharat Bill Payment Systems (BBPS)
The Reserve Bank of India has today decided to grant 'in principle' approval to the National Payments Corporation of India (NPCI) to function as the Bharat Bill Payment Central Unit (BBPCU) in BBPS.
The Bharat Bill Payment System (BBPS), an integrated bill payment system, will function as a tiered structure for operating the bill payment system in the country with a single brand image providing convenience of 'anytime anywhere' bill payment to customers. As the central unit, NPCI will set necessary operational, technical and business standards for the entire system and its participants, and also undertake clearing and settlement activities. The present scope of BBPS will include utility bill payments, such as, electricity, water, gas, telephone and Direct-to-Home (DTH). Based on the experience, this would be extended to include other types of repetitive payments, like school / university fees, municipal taxes etc. in future.
The Operating Units will function as entities facilitating collection of bills/repetitive payments. Reserve Bank had invited applications for authorisation/approval to function as Operating Unit from non-banks/banks. The last date for receipt of such applications/approval requests was November 20, 2015. This had been extended to December 18, 2015.
As at the close of business on November 20, 2015, the Bank has received 12 applications for authorisation from non-bank entities and 18 requests for approval from banks for operating as a BBPOU. Reserve Bank would continue to receive further applications for authorisation/approval as Operating Units till close of business on Friday, December 18, 2015.
It may be recalled that the Reserve Bank of India had, vide circular dated November 28, 2014 issued guidelines for setting up the Bharat Bill Payment System (BBPS), wherein it was indicated that NPCI will function as BBPCU and there could be multiple Bharat Bill Payment Operating Units-BBPOUs (Operating Unit) under BBPS.
Anirudha D. Jadhav
Press Release : 2015-2016/1234
RBI grants “in-principle” approval to three applicants for setting up Trade Receivables Discounting System (TReDS)
In the Union Budget for 2015-16 the Honourable Union Finance Minister had highlighted the need for and use of TReDS for improving flow of funds to MSME sector by reducing the receivables realisation cycles. TReDS will allow SMEs to post their receivables on the system and get them financed. This will not only give them greater access to finance but will also put greater discipline on corporates to pay their dues on time.
In line with this, the Reserve Bank of India has today decided to grant "in-principle" approval to the following three applicants to set up and operate Trade Receivables Discounting System (TReDS) as per the Guidelines issued on December 03, 2014 under the Payment and Settlement System (PSS) Act 2007.
NSE Strategic Investment Corporation Limited (NSICL) and Small Industries Development Bank of India (SIDBI), Mumbai
Axis Bank Limited, Mumbai
Mynd Solutions Pvt. Ltd., Gurgaon, Haryana
The "in-principle" approval granted will be valid for a period of 6 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the Reserve Bank. On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of "in-principle" approval, the Reserve Bank would consider granting to them a Certificate of Authorisation for commencement of the business of TReDS.
As the TReDS will be a payment system authorised under the PSS Act 2007, an elaborate four-tiered structure of application processing was adopted for this purpose.
To start with, a preliminary scrutiny of the applications was done by the Department of Payment and Settlement Systems to vet the eligibility of the applicants vis-à-vis the requirements laid down in the Guidelines. In the next stage, the applicants were invited to make presentations before the Inter Department Group (IDG) comprising officials from various regulatory departments of the Reserve Bank and elaborate or clarify on areas, such as, the financial plan including source of funds, business plan including implementation time, process and technical plans as also issues related to risk management, grievance redressal, Business Continuity Plan / Disaster Recovery Management, etc.
In the third stage, the Committee of Governor and Deputy Governors reviewed the applications and the assessment of the IDG. As suggested by the Committee, another round of meeting with the shortlisted applicants was held to seek further information/clarifications. In the final stage, the recommendations made by this Committee was considered by the Board for Payment & Settlement System (BPSS) today and it approved grant of "in-principle" approval to the these applicants.
The Governor, in his statement on September 04, 2013 had announced the intention to facilitate Electronic Bill Factoring Exchanges in the country, which could electronically accept and auction MSME bills against large companies so that MSMEs could be paid promptly.
The Reserve Bank of India published a concept paper on "Micro, Small & Medium Enterprises (MSME) Factoring-Trade Receivables Exchange" in March 2014 taking into account the interest expressed by a few entities and in consultation with select stakeholders. Subsequently, the draft guidelines for setting up of and operating TReDS were released on July 22, 2014.
Based on the feedback received from public/stakeholders, final guidelines were issued on December 03, 2014 under Section 10(2) read with Section 18 of the Payment and Settlement Systems (PSS) Act, 2007. Entities interested in setting up and operating TReDS were advised to apply for authorisation till February 13, 2015 which was further extended upto March 09, 2015.
The names of applicants who had applied for setting up TReDS was released on March 25, 2015.
Anirudha D. Jadhav
Press Release : 2015-2016/1235
The Reserve Bank of India, in consultation with Government of India, had notified the issuance of Sovereign Gold Bonds, 2015-16 vide circulars IDMD.CDD.No. 939/14.04.050/2015-16 dated October 30, 2015 and IDMD.CDD.No. 968/14.04.050/2015-16 dated November 4, 2015. The first tranche of Sovereign Gold Bonds was open for subscription from November 5 to November 20, 2015. The bonds were to be issued on November 26, 2015.
Large number of applications has been received by banks and post offices. To enable smooth uploading of applications into RBI's E-kuber system, particularly by the post offices, it has since been decided to shift the issue date of the Sovereign Gold Bond from November 26, 2015 to November 30, 2015.
Other terms and conditions of the above circulars remain unchanged.
Anirudha D. Jadhav
Press Release : 2015-2016/1236