FDI in India - Issue of equity shares under the FDI scheme allowed under the Government route against pre-operative/pre-incorporation expenses

RBI/2012-13/502
A.P. (DIR Series) Circular No. 104

May 17, 2013

To
All Category-I Authorised Dealer Banks

Madam / Sir,

Foreign Direct Investment (FDI) in India - Issue of equity shares under the FDI scheme allowed under the Government route against pre-operative/pre-incorporation expenses

Attention of Authorised Dealers Category – I banks is invited to Para 3 (II) of A.P. (DIR Series) Circular No. 74 dated June 20, 2011 read with A.P. (DIR Series) Circular No. 55 dated December 9, 2011, allowing thereby issue of equity shares/ preference shares under the Government route by conversion of import of capital goods, etc., subject to terms and conditions stated therein.

2. On review of the policy, it has now been decided to amend condition at (c) in the aforesaid para. The amended condition is given in the Annex.

RBI announces Scheme for Inflation Indexed Bonds – 2013-14

RBI announces Scheme for Inflation Indexed Bonds – 2013-14

- For Rs. 12,000-15,000 crore

- To be issued in tranches

- First tranche on June 4, 2013 for Rs. 1000-2000 crore

Pursuant to the announcement made in the Union Budget for 2013-14 to introduce instruments that will protect savings of poor and middle classes from inflation and incentivise household sector to save in financial instruments rather than buy gold, RBI, in consultation with Government of India, has decided to launch Inflation Indexed Bonds (IIBs).

RBI - SLR Holdings under Held to Maturity Category

RBI/2012-13/501
DBOD.No.BP.BC.92/21.04.141/2012-13

May 15, 2013

All Scheduled Commercial Banks
(excluding RRBs)

Dear Sir,

Monetary Policy Statement 2013-14 –
SLR Holdings under Held to Maturity Category

Please refer to paragraph 84 of the Monetary Policy Statement 2013-14 (extract enclosed) announced on May 3, 2013 on ‘SLR Holdings under Held to Maturity Category’.

2. In terms of our circular No.DBOD.BP.BC.37/21.04.141/2004-05 dated September 2, 2004 on Prudential Norms on Classification of Investment Portfolio of Banks, the limit of 25 per cent of total investments under Held to Maturity (HTM) category may be exceeded provided the excess comprised only of Statutory Liquidity Ratio (SLR) securities, and the total SLR securities held in the HTM category is not more than 25 per cent of banks’ Demand and Time Liabilities (DTL) as on the last Friday of the second preceding fortnight. This relaxation was allowed taking into account the requirement of maintenance of SLR at 25 per cent of DTL under Section 24 of the Banking Regulations Act, 1949 at that time. The SLR has since been brought down to 23 per cent of DTL. With a view to align the above and in line with the recommendations of the Working Group on Enhancing Liquidity in the Government Securities and Interest Rate Derivatives Markets (Chairman: R.Gandhi), it has been decided as under:

Import of Gold by Nominated Banks/Agencies - RBI

RBI/2012-13/499
A.P.(DIR Series) Circular No.103

May 13, 2013

To,
All Scheduled Commercial Banks which are
Authorised Dealers in Foreign Exchange

Madam/Sirs

Import of Gold by Nominated Banks/Agencies

Attention of Authorised Persons is invited to paragraph 97 of the Monetary Policy Statement 2013-14 dated May 3, 2013 regarding import of gold. In terms of AD (G.P.Series) circular No.7 dated March 6, 1998 (copy enclosed for ready reference), nominated banks/agencies were permitted to import gold on loan basis, Suppliers Credit/Buyers Credit basis, consignment basis as also on unfixed price basis.

RBI Releases Report of the Technical Committee on Services/Facilities to the Exporters

The Reserve Bank of India today released the report of the Technical Committee on Services/Facilities for the Exporters (Chairman - Shri G. Padmanabhan, Executive Director, RBI). Among others the Committee has made recommendations relating to i) review of Gold Card Scheme for extension of export credit to exporters, ii) appropriate inclusion of export finance under the Priority Sector Advances for scheduled commercial banks, iii) raising of foreign currency loans on pool basis for extension of export credit to exporters, iv) allowing factoring on non recourse basis, v) liberalization of merchanting trade, vi) financing to units in Domestic Tariff Area (DTA) / Special Economic Zone (SEZ), vii) more incentives in the area of taxation benefits and subvention, viii) denomination of export credit limit in foreign currency, ix) simplification of hedging procedure, xi) securitization of receivable/ introduction of new insurance products by Export Credit Gurantee Corporation (ECGC)/liberalization of claim procedure by ECGC, etc. Reserve Bank along with the other agencies would examine the recommendations for implementation.

RBI - Clarification on Overseas Direct Investments

RBI/2012-13/481
A.P. (DIR Series) Circular No. 100

April 25, 2013

To
All Category-I Authorised Dealer Banks
Madam / Sir,

Overseas Direct Investments – Clarification

Attention of the Authorised Dealers (AD) is invited to Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004 notified by the Reserve Bank vide Notification No. FEMA 120/RB-2004 dated July 07, 2004 and as amended from time to time.

Survey on International Trade in Banking Services: 2011-12

The Reserve Bank of India today released, on its website, the data related to the results of Survey on International Trade in Banking Services: 2011-12.

The data compiled are based on an annual survey which is intended to provide information on International trade in banking services (ITBS) for India in respect of the branches/subsidiaries of Indian banks operating abroad and branches/subsidiaries of foreign banks operating in India. Consistent and comparable data are captured on financial auxiliaries’ services rendered by the banks based on explicit/ implicit fee /commission charged to customers (please see Annex for details).

Highlights:

Branches of Agency Banks and RBI offices to remain open on March 29, 30 and 31, 2013 to facilitate Tax Payment

With a view to providing greater convenience to the tax payers, it has been decided that all designated branches of agency banks and RBI offices conducting Government business will keep their counters open on March 29, 30 and 31, 2013 to accept Government taxes. All tax payers are urged to remit taxes well before the last date to avoid last minute rush. Facility for payment of taxes on-line and through select ATMs is also available.

Alpana Killawala

Chief General Manager

Press Release : 2012-2013/1606

Inclusion in the Second Schedule to the Reserve Bank of India Act, 1934 – Sumitomo Mitsui Banking Corporation

RBI/2012-13/456
Ref: DBOD. No.Ret. BC. 85/12.07.137/2012-13

March 22, 2013

All Scheduled Commercial Banks

Dear Sir,

Inclusion in the Second Schedule to the Reserve Bank of India Act, 1934 – Sumitomo Mitsui Banking Corporation

We advise that the name of “Sumitomo Mitsui Banking Corporation" has been included in the Second Schedule to the Reserve Bank of India Act, 1934 by Notification DBOD.IBD.No.9808/23.13.155/2012-13 dated January 09, 2013, published in the Gazette of India (Part III – Section 4) dated February 2, 2013.

Inclusion in the Second Schedule to the Reserve Bank of India Act, 1934 – Westpac Banking Corporation

RBI/2012-13/457
Ref: DBOD. No.Ret. BC.86/12.07.136/2012-13

March 22, 2013

All Scheduled Commercial Banks

Dear Sir,

Inclusion in the Second Schedule to the Reserve Bank of India Act, 1934 – Westpac Banking Corporation

We advise that the name of “Westpac Banking Corporation" has been included in the Second Schedule to the Reserve Bank of India Act, 1934 by Notification DBOD.IBD.No.8297/23.13.138/2012-13 dated December 10, 2012, published in the Gazette of India (Part III – Section 4) dated January 12, 2013.

RBI - Clarification on Priority Sector Lending - Treatment of Contingent Liabilities

RBI/2012-13/455
RPCD.CO.Plan. BC 70/04.09.01/2012-13

March 22, 2013

The Chairman/ Managing Director/
Chief Executive Officer
[All scheduled commercial banks
(excluding Regional Rural Banks)]

Dear Sir\Madam,

Priority Sector Lending-Treatment of Contingent Liabilities – Clarifications

It has come to notice that some banks have included contingent liabilities/off-balance sheet items as part of priority sector target achievement. In this connection, we clarify that this is not in conformity with priority sector lending guidelines. Therefore, banks are advised to declassify such accounts with retrospective effect, where a contingent liability / off-balance sheet item is treated as a part of priority sector target achievement.

FEMA - Clarification on Import of precious and semi precious stones

RBI/2012-13/418
A.P. (DIR Series) Circular No.83

February 20, 2013

To
      All Category - I Authorised Dealer Banks

Madam / Sir,

Foreign Exchange Management Act,1999 - Import of precious and semi precious stones- Clarification

Attention of Authorised Dealer Category – I (AD Category – I) banks is invited to the provisions contained in A.P.(DIR Series) Circular No.34 dated September 24, 2012, in terms of which AD Category – I banks have been permitted to approve Suppliers’ and Buyers’ Credit (trade credit) including the usance period of Letters of Credit  opened for import of gold in any form including jewellery made of gold/ precious metal or and studded with diamonds/semi precious/ precious stone should not exceed 90 days from the date of shipment.

Guidelines on Fair Practices Code for NBFCs – Grievance Redressal Mechanism - Nodal Officer

RBI/2012-13/416
DNBS.CC.PD.No.320/03.10.01/2012-13

February 18, 2013

To
All NBFCs

Dear Sir,

Guidelines on Fair Practices Code for NBFCs – Grievance Redressal Mechanism - Nodal Officer

The Reserve Bank vide its circular dated March 26, 2012, issued revised guidelines on Fair Practices Code (FPC) for all NBFCs to be adopted by them while doing lending business. The guidelines were reviewed in view of the creation of a new category of NBFCs viz; NBFC-MFIs and also rapid growth in NBFCs’ lending against gold jewellery.

Shifting of Foreign Exchange Department, Mumbai Regional Office to Mumbai Fort Office of Reserve Bank of India

The Foreign Exchange Department, Mumbai Regional Office housed at C-7, 1st, 5th & 6th Floor, Bandra-Kurla Complex, Bandra (East), Mumbai-400 051 has since shifted to 1st Floor, Main Building, Reserve Bank of India, Foreign Exchange Department, Mumbai Regional Office, Shahid Bhagat Singh Road, Mumbai-400 001, as at the close of business of February 11, 2013. It is, therefore, requested that in future all correspondences meant for The General Manager, Foreign Exchange Department, Mumbai Regional Office, Reserve Bank of India may now be addressed to:-

RBI - Gold Deposit Scheme now enables Mutual Funds/Exchange Traded Funds registered under SEBI to deposit part of their gold with the banks

The Central Government, with a view to bringing privately held stock of gold in circulation, reduce the country’s reliance on import of gold and providing its owners with some income apart from freeing them from the problems of storage, movement and security of gold in their possession, had notified Gold Deposit Scheme 1999 on September 14, 1999. Accordingly, Reserve Bank of India vide circular No IBS 912/23.67.001/99-2000 dated October 5, 1999 had formulated guidelines for Gold Deposit Scheme to enable banks authorized to deal in gold to prepare their own Gold Deposit Schemes.

RBI sets up Technical Committee on Services/Facilities for the Exporters

Given the current global and Indian scenario and the importance of export sector in the overall context, the Reserve Bank of India has constituted a technical committee to examine issues relating to difficulties being faced by exporters with regard to availability of credit, transaction costs, insurance and factoring and other procedural hassles in their dealings with banks and financial institutions. The decision to set up such a committee was announced by the Governor, Dr. D.Subbarao in his meeting with bankers post Third Quarter Review of the Monetary Policy 2012-13 on January 29, 2013.

RBI Cancels the Licence of Abhinav Sahakari Bank Ltd., Rahuri Dist. Ahmednagar, Maharashtra for carrying on banking business

It is hereby notified for the information of the public that the Reserve Bank of India vide order dated February 1, 2013 has cancelled the licence of Abhinav Sahakari Bank Ltd., Rahuri, Dist. Ahmednagar, Maharashtra to carry on banking business under Section 22 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies). As such, the bank is precluded from transacting the business of 'banking' as defined in Section 5(b) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies), including acceptance/ repayment of deposits, forthwith.

Ajit Prasad
Assistant General Manager

Press Release : 2012-2013/1369

RBI - Opening of NRO accounts by individuals of Bangladesh Nationality

Attention of all the Authorised Dealer banks and Authorised banks (Authorised banks) is invited to Paragraph 1 of Schedule-3 of Foreign Exchange Management (Deposit) Regulations, 2000 contained in Notification No. FEMA.5/2000-RB dated May 3, 2000, as amended from time to time, in terms of which opening of Non-Resident Ordinary Rupee (NRO) accounts by individuals/ entities of Bangladesh/ Pakistan nationality/ ownership requires approval of Reserve Bank.

RBI - Banks not Permitted to finance purchase of Gold in any form

RBI/2012-13/413
RPCD.RCB.BC.No. 64/07.51.014/2012-13

February 07, 2013

The Chairmen / CEOs of all
State and Central Co-operative Banks

Madam / Dear Sir,

Bank Finance for Purchase of Gold

State and Central Co-operative Banks grant loans for various purposes against the security of gold / gold ornaments as part of their lending policy.

2. In terms of announcements made in paragraph 102 and 103 (extract enclosed) of the Second Quarter Review of Monetary Policy 2012-13 on October 30, 2012, the significant rise in import of gold in recent years is a cause of concern as direct bank financing for purchase of gold in any form viz., bullion/primary gold/jewellery/gold coin, etc., would lead to fuelling of demand of gold for speculative purposes. It was therefore proposed that other than working capital finance, banks would not be permitted to finance purchase of gold in any form.

RBI Permits standalone PDs to trade in corporate bonds

With a view to further developing the debt market in India, it has been decided to permit standalone Primary Dealers (PDs) to become members of SEBI approved stock exchanges for the purpose of undertaking proprietary transactions in corporate bonds. While doing so, standalone PDs should comply with all the regulatory norms laid down by SEBI and all the eligibility criteria/rules of stock exchanges.

Yours faithfully

(K.K. Vohra)
Chief General Manager