NOW, COMPANIES UNDER INVESTICATIONS BY DIRECTOR OF ENFORCEMENT CAN AVAIL ECB UNDER AUTOMATIC ROUTE !!!

NOW, COMPANIES UNDER INVESTICATIONS BY DIRECTOR OF ENFORCEMENT CAN AVAIL ECB UNDER AUTOMATIC ROUTE !!!

As per the extant guidelines, corporates that are under investigation by any law enforcing agencies like the Directorate of Enforcement (DoE), etc. are not allowed to access ECB under the Automatic route. Any request by such corporates for ECB is examined by the Reserve Bank under the approval route.

On a review, it has been decided to permit all entities to avail of ECBs under the automatic route as per the current norms, notwithstanding the pending investigations / adjudications / appeals by the law enforcing agencies, without prejudice to the outcome of such investigations / adjudications / appeals.

  Accordingly, in case of all applications where the borrowing entity has indicated about the pending investigations / adjudications / appeals, Authorised Dealers while approving the proposal shall intimate the concerned agencies by endorsing the copy of the approval letter. The same procedure will be followed by the Reserve Bank of India also while approving such proposals.

All other aspects of the ECB policy, under the Automatic route such as amount of ECB, eligible borrower, recognised lender, end-use, all-in-cost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements remain unchanged.

Ref- A.P. (DIR Series) Circular No. 87 dated 5th March 2013

Liaison Office (LO) / Branch Office (BO) in India by Foreign Entities – Reporting to Income Tax Authorities.

Liaison Office (LO) / Branch Office (BO) in India by Foreign Entities – Reporting to Income Tax Authorities.

In terms of A.P. (DIR Series) Circular No. 24 dated 30.12.2009 which LOs/BOs are required to furnish copy of the Annual Activity Certificate (AAC) to Director General of Income Tax (International Taxation), Drum Shaped Building, I.P. Estate, New Delhi 110002.

2. It is clarified that copies of the AACs submitted to the DGIT (International Taxation) should be accompanied by audited financial statements including receipt and payment account.

3. Further, at the time of renewal of permission of LOs by AD banks, they may note to endorse a copy of each such renewal to the office of the DGIT (international Taxation).

Ref -A.P. (DIR Series) Circular No. 55   dated November 26, 2012

RBI Asks NBFCs to replace " post dated cheques" with 'CTS 2010' standard Cheques by December 31, 2012.

RBI Asks NBFCs to replace " post dated cheques" with 'CTS 2010' standard Cheques by December 31, 2012.

The Reserve Bank of India (RBI) today asked non-banking financial companies (NBFCs) to replace post-dated cheques issued to them by customers with new standardised cheques with improved security features.

NBFCs accept post-dated cheques from their customers for future monthly installment payments. For the purpose of standardisation and enhanced security features, the banks have been told by RBI to migrate to the 'CTS 2010' standard by December 31, 2012.

The non-CTS cheques would be out of circulation from December 31, 2012 and will not be acceptable at clearing system of the banks as well.

"NBFCs are, therefore, required to ensure the replacement of Non-CTS-2010 standard compliant cheques with CTS-2010 standard compliant cheques before December 31, 2012," RBI said in a notification.

'CTS 2010' standard is a set of benchmarks towards achieving standardisation of cheques issued by banks across the country.

These include provision of mandatory minimum security features on cheque forms like quality of paper, watermark, bank's logo in invisible ink, void pantograph and standardisation of field placements on cheques.

RBI further asked NBFCs to confirm to the regional office of the bank that a plan has been put in place for implementing the CTS 2010 standard within the prescribed timeline.

Source- Indian Express

FURTHER CLARIFICATION ON COMPOUNDING OF OFFENSES UNDER FEMA BY RBI

Foreign Exchange Management Act, 1999 (FEMA)-
Compounding of Contraventions under FEMA, 1999

Attention of all the Authorised Dealer Category - I (AD Category - I) banks and their constituents is invited to A.P. (DIR Series) Circular no. 56 dated June 28, 2010 and the subsequent Press Release dated August 13, 2010, clarifying the position on ‘technical’ contravention and subsequent compounding thereof.

2. In this connection, it is clarified that whenever a contravention is identified by the Reserve Bank or brought to its notice by the entity involved in contravention by way of a reference other than through the prescribed application for compounding, the Bank will continue to decide (i) whether a contravention is technical and/or minor in nature and, as such, can be dealt with by way of an administrative/ cautionary advice; (ii) whether it is material and, hence, is required to be compounded for which the necessary compounding procedure has to be followed or (iii) whether the issues involved are sensitive / serious in nature and, therefore, need to be referred to the Directorate of Enforcement (DOE). However, once a compounding application is filed by the concerned entity suo moto, admitting the contravention, the same will not be considered as ‘technical’ or ‘minor’ in nature and the compounding process shall be initiated in terms of section 15 (1) of Foreign Exchange Management Act, 1999 read with Rule 9 of Foreign Exchange (Compounding Proceedings) Rules, 2000.

 Ref:RBI/2012-13/153-A.P. (DIR Series) Circular No.11 dated 31st July 2012