Sunday, 22 June 2014

RBI May 2014

Notification/Circular no. Date Subject Amendment
A.P. (DIR Series) Circular No.117 02-May-14 RBI/2013-14/577
A.P. (DIR Series) Circular No.127 - Foreign Direct Investment (FDI) in India – Reporting mechanism for transfer of equity shares/ fully and mandatorily convertible preference shares/ fully and mandatorily convertible debentures
In cases where the NR investor including an NRI acquires shares on the stock exchanges, the investee company would now have to file form FC-TRS with the AD Category-I bank.
DBOD.AML.BC.No.103/14.01.001/2013-14  09-May-14 RBI/2013-14/585
A.P. (DIR Series) Circular No.129 - External Commercial Borrowings (ECB) Policy - Refinance / Repayment of Rupee loans raised from domestic banking system
Eligible Indian companies will now not be permitted to raise ECB from overseas branches / subsidiaries of Indian banks for the purpose of refinance / repayment of the Rupee loans raised from the domestic banking system in respect of the following:
a. Scheme of take-out financing.
b. Repayment of existing Rupee loans for companies in infrastructure sector.
c. Spectrum allocation
d. Repayment of Rupee loans.
DNBS (PD) CC.No.373/03.10.001/2013-14 13-May-14 RBI/2013-14/590
DPSS.CO.PD.No. 2366/02.14.006/2013-14 - Issuance and Operation of Pre-paid Payment Instruments in India – Consolidated Revised Policy Guidelines
Banks have been granted general permission to issue rupee denominated co-branded prepaid instruments
16-May-14 RBI/2013-14/594
A.P. (DIR Series) Circular No.130 - External Commercial Borrowings (ECB) from Foreign Equity Holder - Simplification of Procedure
 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:
(a) Proposals for raising ECB by companies belonging to manufacturing, infrastructure, hotels, hospitals and software sectors from indirect equity holders and group companies.
(b) 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.
(c) 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.
(d) Proposals involving change of lender when the ECB is from FEH – direct / indirect equity holders and group company.
19-May-14 RBI/2013-14/595 A.P. (DIR Series) Circular No.131 - Overseas Direct Investments – Limited Liability Partnership (LLP) as Indian Party An LLP can now undertake financial commitment to / on behalf of a JV / WOS abroad in terms of the extant ODI Regulations
21-May-14 Notification No. FEMA 303/2014-RB - Foreign Exchange Management (Foreign Exchange Derivative Contracts) (Amendment) Regulations, 2014 A person resident outside India who is eligible to invest in securities as laid down in Schedules 2, 5, 7 and 8 of Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations, 2000 may  also enter into currency futures or exchange traded currency options contracts on a stock exchange recognised under section 4 of Securities Contracts (Regulations) Act, 1956 to hedge an exposure to risk, subject to such terms and conditions as may be prescribed.
22-May-14 Notification No.FEMA. 304/2014-RB -Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) (fifth Amendment) Regulations, 2014 A Non-resident Indian may, without limit, purchase on non-repatriation basis, listed non-convertible/redeemable preference shares or debentures issued in terms of Regulation 7 (2) of these Regulations
22-May-14 Notification No. FEMA.305/2014-RB - Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) (Sixth Amendment) Regulations, 2014 Any person being a non-resident investor of a company registered in India and listed on a recognised stock exchange/s in India (resident investee company), may pledge the shares of that company, in favour of a Non-Banking Financial Company in India, to secure the credit facilities being extended to that resident investee company for bonafide business purposes, subject to the AD bank satisfying itself of the compliance of the conditions stipulated by the Reserve Bank, from time to time, in this regard.
A.P. (DIR Series) Circular No.119 26-May-14 RBI/2013-14/606 DNBS (PD) CC.No.376/03.10.001/2013-14 - Requirement for obtaining prior approval of RBI in cases of acquisition/ transfer of control of NBFCs Prior written permission of the Reserve Bank of India shall be required for –
(i) any takeover or acquisition of control of an NBFC, whether by acquisition of shares or otherwise;
(ii) any merger/amalgamation of an NBFC with another entity or any merger/amalgamation of an entity with an NBFC that would give the acquirer / another entity control of the NBFC;
(iii) any merger/amalgamation of an NBFC with another entity or any merger/amalgamation of an entity with an NBFC which would result in acquisition/transfer of shareholding in excess of 10 percent of the paid up capital of the NBFC.
(iv) Prior written approval of the Reserve Bank would also be required before approaching the Court or Tribunal under Section 391-394 of the Companies Act, 1956 or Section 230-233 of Companies Act, 2013 seeking order for mergers or amalgamations with other companies or NBFCs.

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