Fema / RBI News, Articles, Notifications and Forms

  • Sep
  • 20
  • 2014

Another Turnaround for FDI – RBI relaxes norms for issuance of Equity shares

Added In RBI / FEMA
Debolina Banerjee Background The regulatory environment concerning the foreign investment in India has been under constant evolution. In recent times the Reserve Bank of India (RBI) has been consistently making endeavors to ensure availability of funds to India Inc. 

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  • Sep
  • 17
  • 2014

FDI in India – Issue of equity shares under FDI Scheme against legitimate dues

Added In RBI / FEMA
The extant guidelines for issue of shares/convertible debentures under the automatic route have been reviewed in consultation with the Government of India and, accordingly, it has been decided to permit issue of equity shares against any other funds payable by the investee company

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  • Sep
  • 10
  • 2014

Treatment of accounts opened for credit of Scholarship Amounts under Government Schemes

Added In RBI / FEMA
As directed by the Bombay High Court, Regional Rural Banks and State / Central Cooperative Banks are hereby advised to ensure that accounts of all student beneficiaries under the various Central/State Government Scholarship Schemes are free from restrictions of ‘minimum balance’ and ‘total credit limit’.

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  • Sep
  • 09
  • 2014

Upper age limit for Whole Time Directors on the Boards of Banks

Added In RBI / FEMA
It has been decided that the upper age limit for MD & CEO and other WTDs of banks in the private sector should be 70 years, i.e. beyond which nobody should continue in the post. Within the overall limit of 70 years, individual bank’s Boards are free to prescribe a lower retirement age for the WTDs, including the MD & CEO, as an internal policy.

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  • Sep
  • 09
  • 2014

Guidelines on Wilful Defaulters – Clarification regarding Guarantor, Lender and Unit

Added In RBI / FEMA
While dealing with wilful default of a single borrowing company in a Group, the banks /FIs should consider the track record of the individual company, with reference to its repayment performance to its lenders. However, in cases where guarantees furnished by the companies within the Group on behalf of the wilfully defaulting units are not honoured when invoked by the banks /FIs, such Group companies should also be reckoned as wilful defaulters

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  • Sep
  • 07
  • 2014

RBI permits overseas lender to lend in Indian Rupees

Added In RBI / FEMA
RBI allowed for repayment of rupee loans by availing of ECB in certain sectors and also permitted refinancing of existing ECB by raising fresh ECB at lower all-in-cost but subject to the condition that outstanding maturity of the original loan is not reduced. Some of them are enlisted hereunder:

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  • Sep
  • 01
  • 2014

Account cannot be classified at Inoperative if Dividend been credited to such account

Added In RBI / FEMA
There may be instances where the customer has given a mandate for crediting dividend on shares to Savings Bank account and there are no other operations in the Savings Bank account. Some doubts have arisen whether such an account is to be treated as inoperative account after two years.

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  • Sep
  • 01
  • 2014

Specify time frame for Disposal of loan applicable -RBI to banks

Added In RBI / FEMA
It is, therefore, advised that banks should clearly delineate the procedure for disposal of loan proposals, with appropriate timelines, and institute a suitable monitoring mechanism for reviewing applications pending beyond the specified period. It is, however, reiterated that there should not be any compromise on due diligence requirements. Banks may also make suitable disclosures on the timelines for conveying credit decisions through their websites, notice-boards, product literature, etc.

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  • Aug
  • 28
  • 2014

A Financial Conditions Index for India

Added In RBI / FEMA
Financial market variables contain information about the future state of the economy. Changes in financial variables often translate into changes in the real economy. Very often financial variables send contradictory signals to economic agents. Further, acute information asymmetry exists in financial markets especially around trigger events during times of crises.

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  • Aug
  • 28
  • 2014

Purchase and sale of securities other than shares or convertible debentures of an Indian company by a person resident outside India

Added In RBI / FEMA
With a view to providing flexibility in regard to the manner in which government securities can be acquired by eligible investors, it has now been decided to remove any stipulation as to the manner of acquisition from the said Regulations. Consequently, the eligible investors can acquire such securities in any manner as per the prevalent/approved market practice.

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