The week of 12–18 January 2026 witnessed extensive regulatory activity across taxation, trade, securities, insolvency, corporate law, and financial regulation, reflecting tighter compliance, digitisation, and investor protection. Key income-tax developments included new exemptions for statutory welfare boards, clarification on nil TDS certificates, limits on DTAA abuse, and protection of employees from recovery where employers defaulted on TDS deposits. Customs and DGFT measures focused on tariff value revisions, facilitation of electronic postal exports, quality control relaxations, and calibrated reopening of wheat flour exports through quota-based authorisations. Capital markets saw major reforms with the introduction of the Securities and Exchange Board of India Mutual Funds Regulations, streamlined foreign investor access, and auction-based market reforms. Insolvency jurisprudence reinforced limits on personal liability and locus standi, while RBI issued comprehensive FEMA regulations, ombudsman reforms, and draft prudential norms. Collectively, these updates signal a shift toward structured liberalisation, procedural clarity, and stronger governance across sectors.
Notifications & Circulars issued during week (12th – 18th Jan 2026)
(Income Tax, GST, Central Excise, Custom Duty, DGFT, SEBI, MCA, IBBI, RBI)
(Click the Link for Notification/ Circular as issued)
A. Income Tax
Exemptions to West Bengal Building and Other Construction Workers Welfare Board: West Bengal Building and Other Construction Workers Welfare Board, a Board constituted by the Government of West Bengal, has been notified under section 10(46) for exemption on its income arising from amount received as Cess collected under Building Workers Welfare Cess Act, Registration fees, Subscriptions, Grants and loan from Government and interest on bank deposits.
(Link: Income Tax Notification 07/2026 Dated 14/01/2026)
SC, Mauritius DTAA does not come to rescue, Tiger Global is liable to Tax: Case of Authority of Advance Ruling vs Tiger Global International Holdings, SC Judgement Dated 15th January 2026. The apex court held that the exemption under Article 13(4) of the Double Taxation Avoidance Agreement cannot be claimed where the transfer of unlisted equity shares is carried out pursuant to an arrangement impermissible under Indian law. The Court noted that the transfer of unlisted equity shares by Tiger Global was not an isolated commercial transaction but formed part of a composite arrangement culminating in Walmart’s acquisition of Flipkart. The Court observed that the factual findings on record established that the manner in which the transfer was structured and executed rendered the arrangement impermissible under Indian law.
HC, Nil Withholding Certificates (TDS) for payment to non-residents under Income Tax: Case of Nord Angila Education Limited vs DCIT, HC Delhi Judgement Dated 14th January 2026. The petitioner applied for a Nil Withholding Certificate under Section 197, asserting that the consideration received was not chargeable to tax in India. ITAT in the petitioner’s own case, had already examined the very same services and held that they do not constitute fees for technical services under the India–UK DTAA. The Assessing Officer rejected the petitioner’s application for NIL TDS and directed deduction of tax at 15%, merely stating that determination of income at this stage was premature and that withholding was necessary to protect the interests of the Revenue. The court held this approach to be legally impermissible. Rule 28AA mandates that the Assessing Officer must determine the existing and estimated tax liability after taking into account tax payable on the estimated income.
HC Set aside TDS Demand for Employee due to Non-Deposit by Employer: Case of Tarun Sabharwal vs ITO, HC Delhi Judgement Dated 8th December 2025. The case dealt with the issue of recovery of tax demand from an employee in cases where tax was deducted at source (TDS) by the employer but not deposited with the Government. The court noted that as per CBDT Circular dated 21st September 2023, tax demand in such circumstances cannot be recovered from the employee. The court held that recovery cannot be enforced against the employee.
HC, Ignorance of Tax Law not a genuine ground for Late Return Condonation: Case of Manjit Singh Dhaliwal vs CIT International Taxation, HC Delhi Judgement Dated 23rd December 2025. HC upheld the rejection of application to condone delay in filing his Income Tax Return, ruling that mere ignorance of complex Indian tax laws or COVID-related travel issues don’t constitute “extraordinary circumstances” for condonation.
B. GST
No Notification/ Circular during the week.
C. Central Excise
No Notification/ Circular during the week.
D. Custom Duty
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver: CBDT notified the Tariff Values of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver, which shall come into force w.e.f. 14th January 2026. The tariff value for crude palm oil is set at USD 1077 per metric ton, while gold and silver have tariff values of USD 1485 per 10 grams and USD 2724 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 7679 per metric ton.
(Link: Customs Notification 01/2026 (NT) Dated 13/01/2026)
Bhogapuram notified as Customs Handling Point in Andhra Pradesh: The notification amends earlier notification 61/94 (NT) dated 21st November 1994, and a new entry has been inserted for the State of Andhra Pradesh, adding Bhogapuram as an authorised location for customs operations. It has been notified for the unloading of imported goods and the loading of export goods, or any specified class of such goods.
(Link: Customs Notification 02/2026 (NT) Dated 14/01/2026)
Drawback Rules updated to recognise Postal Export Entries: The Customs and Central Excise Duties Drawback Rules, have been amended, to streamline drawback claims for exports made by post. The key changes include expanding references to “bill of export or shipping bill” to also cover section 84 entries for postal exports, revising headings and scope of rules dealing with postal exports, and aligning procedures across rules 8, 12, 13, and 14. The provisions deem electronic entries made under section 84 for exports by post as valid drawback claims from the date the Electronic Data Interchange receives the entry after the proper officer permits clearance and loading.
(Link: Customs Notification 03/2026 (NT) Dated 15/01/2026)
Electronic Entries for Postal Exports Recognised Under Customs Rules: The notification amending earlier notification 24/2023(NT) dated 1st April 2023 to align export facilitation provisions with electronic processing for exports by post under section 84 of the Customs Act. The amendments expand references to bills of export and shipping bills to expressly include electronic entries made under section 84 for postal exports processed through the customs automated system. It specifies that such exports must be routed through foreign post offices that allow electronic presentation and processing of entries.
(Link: Customs Notification 04/2026 (NT) Dated 15/01/2026)
Electronic Postal Exports included in Customs Export Framework: The notification extend export facilitation provisions to exports made by post through electronic processing. The amendments expressly include electronic entries made under section 84 of the Customs Act, for postal exports alongside shipping bills and bills of export presented under section 50. It clarify that eligibility and benefits apply once the proper officer permits clearance and loading of goods under section 51 or section 84, as relevant. A new condition requires that such exports be undertaken through foreign post offices that allow electronic presentation and processing of entries on the customs automated system.
(Link: Customs Notification 05/2026 (NT) Dated 15/01/2026)
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver: CBDT notified the Tariff Values of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver, which shall come into force w.e.f. 16th January 2026. The tariff value for crude palm oil is set at USD 1075 per metric ton, while gold and silver have tariff values of USD 1483 per 10 grams and USD 2950 per kilogram, respectively. The tariff value for areca nuts is fixed at USD 7679 per metric ton.
(Link: Customs Notification 06/2026 (NT) Dated 15/01/2026)
Amendments to Postal Export (Electronic Declaration and Processing) Regulations: The amendment substitutes the existing prescribed forms under the Regulations with revised forms. It clarifies that the changes are procedural in nature and relate specifically to the formats used for electronic declaration and processing of postal exports.
(Link: Customs Notification 07/2026 (NT) Dated 15/01/2026)
Extending export benefits for exports made through Postal mode: Refer Circular No. 25/2022 dated 9th December 2022 regarding the electronic processing of commercial postal exports through PBE Automated System. Owing to the earlier lack of integration between the PBE Automated system and ICES, exporters were unable to avail export benefits under the said system. The required integration has now been established, thereby enabling seamless processing and the electronic provision of export benefits.
(Link: Customs Circular 01/2026 Dated 15/01/2026)
Cross Recessed Screws (Quality Control) Order: Ministry of Steel, vide Order dated 13th January 2026 has informed that Cross Recessed Screws (Quality Control) Order, 2025 was issued by Department of Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, with effective date of implementation as specified. Subsequently, work related to Iron and Steel products falling under Chapter 72 (4 HSN Codes) and Chapter 73 (250 HSN Codes) has been transferred by DPIIT to Ministry of Steel. In view of representations, the consignments having inward entry date between 1st November 2025 to 12th January 2026 have been exempted from quality control order. The officers under your jurisdiction be sensitised accordingly..
(Link: Customs Instructions 01/2026 Dated 17/01/2026)
HC, Textile Committee Cess invalid as Dyeing is Not ‘Manufacture’: Case of Varun Fabs Limited vs Union of India, HC P&H Judgement Dated 24th December 2025. HC held that independent dyeing and processing units are not considered manufacturers under textile law, thus quashing the imposition of Textile Committee Cess.
E. Directorate General of Foreign Trade (DGFT)
Wheat Flour exports permitted up to 5 Lakh MT: The notification maintains the existing prohibition on exports of wheat or meslin flour, including atta, maida, semolina (rava/sirgi), wholemeal atta, and resultant atta. However, it introduces a limited relaxation by permitting exports of up to 5 lakh metric tonnes (LMT) of such products. This allowance is subject to obtaining a specific export authorisation and compliance with operational modalities to be notified separately through a public notice.
(Link: DGFT Notification 55/2026 Dated 16/01/2026)
Modalities for Export of Wheat Flour and Related Products: The public notice prescribe modalities for the export of wheat flour and related products. Export authorisations must be applied for online within specified monthly windows, and will be valid for six months. Eligibility is restricted to manufacturer exporters, merchant exporters with valid manufacturing tie-ups, and EOUs/SEZ/Advance Authorisation holders, subject to strict documentation, minimum quantity thresholds of 2,500 MT, and compliance declarations ensuring use of domestic wheat and no diversion from PDS stocks. Authorisations are non-transferable, misdeclarations attract a three-year bar, and exporters must submit landing certificates within 30 days of shipment to remain compliant.
(Link: DGFT Public Notice 44/2026 Dated 16/01/2026)
Interest Subvention Support for Pre and Post Shipment Export Credit under NIRYAT PROTSAHAN: DGFT has amended the operational guidelines for Interest Subvention Support on pre- and post-shipment export credit under the Export Promotion Mission – Niryat Protsahan. It align eligibility with the RBI consolidated credit directions, clarify that support applies to the interest cost actually borne by eligible MSME exporters, and ring-fence applicability to facilities sanctioned on or after 2nd January 2026. The exclusions bar deemed exports and accounts turning non performing before completing the export cycle. Revised rates apply prospectively, while exporters graduating out of MSME status retain eligibility for three years as per Ministry of MSME norms.
(Link: DGFT Trade Notice 22/2026 Dated 16/01/2026)
F. Securities and Exchange Board of India (SEBI)
SEBI Mutual Funds Regulations 2026: The SEBI (Mutual Funds) Regulations 2026 replacs the existing framework with a comprehensive, principle-based regime. These overhaul registration, eligibility, governance, and net worth norms for sponsors, trustees, asset management companies, and custodians, while strengthening trustee oversight, conflict-of-interest controls, disclosures, valuation standards, and investor grievance mechanisms. A new regime for Specialized Investment Funds is introduced with higher risk disclosures and minimum investment thresholds, alongside a differentiated “Mutual Fund Lite” framework tailored for passive products with proportionate compliance. Detailed provisions govern scheme launch, advertisements, listing, winding up, investments, borrowing limits, NAV computation, payouts, stress testing, and market abuse deterrence.
(Link: SEBI Notification Dated 14/01/2026)
Amendments to SEBI Credit Rating Agencies Regulations: The amendment broadens and clarifies the scope of activities that credit rating agencies (CRAs) may undertake by expressly allowing them to carry out other activities specified by the Board and to rate financial instruments that fall under the purview of other financial sector regulators or authorities, as specified by SEBI. The revised explanation makes it clear that such ratings must strictly comply with the relevant rating guidelines issued by the concerned regulator or authority and will remain under that regulator supervisory jurisdiction.
(Link: SEBI Notification Dated 13/01/2026)
Introduction of Closing Auction Session (CAS) in the Equity Cash Segment and certain modifications in the Pre-Open Auction Session: SEBI mandates introduction of a Closing Auction Session (CAS) in the equity cash segment, from 3rd August 2026, initially applicable to securities with listed derivatives and preserving VWAP-based closing for others. CAS is prescribed as a 20-minute separate session (3:15-3:35 pm) with specified sub-periods, random order-entry close, allowable order types (limit and market), equilibrium-price matching rules, +/-3% price band from a VWAP/LTP-based reference price, carry-forward of CTS limit orders (subject to modification rules), order-level margining, dissemination requirements and existing cash-market risk controls. The Pre-Open Auction Session framework is aligned with CAS mechanics (timings, order priority, dissemination). Stock Exchanges and Clearing Corporations must jointly formulate SOPs within 30 days.
(Link: SEBI Circular Dated 16/01/2026)
Single Window Automatic and Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework for FPIs and FVCIs: SEBI introduced the Single Window Automatic and Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework, to simplify onboarding and ongoing compliance for low-risk, well-regulated foreign investors such as sovereign entities, regulated retail mutual funds, insurance companies, and pension funds from identified jurisdictions. The key relaxations include a longer registration validity of 10 years (instead of three), KYC review periodicity extended to 10 years, and streamlined renewal requirements. SWAGAT-FI investors are also granted unified accounting and investment access across FPI, FVCI, and other foreign investment routes.
(Link: SEBI Circular Dated 16/01/2026)
Consultation Paper on proposal to permit netting of funds for transactions done by Foreign Portfolio Investors (FPIs): The paper propose to permit netting of funds for cash market transactions by Foreign Portfolio Investors (FPIs) to improve operational efficiency and reduce funding costs. Currently, FPIs must settle purchases and sales on a gross basis, even when same day buy and sell values offset, leading to temporary liquidity strain, forex slippage, and higher funding costs, especially during index rebalancing. The proposal would allow netting only for outright transactions (securities with either buy or sell, not both, in a settlement cycle), while continuing gross settlement for non-outright transactions to mitigate market risk. Securities settlement, STT, and stamp duty would remain delivery-based. The comments/ feedback is invited from stakeholders.
(Link: SEBI Consultation Paper Dated 16/01/2025)
Consultation paper for simplification of client on-boarding and rationalisation of risk management framework at KYC Registration Agencies: The key proposals include centralising and sharing supplementary KYC information at the KRA level, mandating periodic KYC reviews every five years, enabling seamless sharing of updated KYC data across intermediaries, and introducing defined timelines for delinking KYC records after account closure. Some relaxations are proposed for OCI card holders residing in India, simplified documentation for name changes already updated in PAN and Aadhaar, optional overseas address proof in specified cases, and easing source verification requirements for current addresses. The paper also proposes flexibility in capturing alternate contact details and reduced verification where Aadhaar-seeded information is already validated. The comments/ feedback is invited from stakeholders.
(Link: SEBI Consultation Paper Dated 16/01/2025)
G. Ministry of Corporate Affairs (MCA)
Government revises Part-Time appointments to NFRA: The amendment substitute the existing list of part-time members with a new set of senior officials drawn from key financial and regulatory institutions. The revised composition includes a Joint Secretary from the Ministry of Corporate Affairs, the Deputy Comptroller and Auditor General of India, the Chief Financial Officer of the Reserve Bank of India, and an Executive Director of the Securities and Exchange Board of India.
(Link: MCA Notification Dated 13/01/2026)
Incorrect E-Form Filing attracts penalty even if Later Rectified: The adjudication arose from the filing of Form AOC-4 containing incorrect particulars, where the company mistakenly selected an incorrect status regarding whether it was an OPC or Small Company. Although the error was admitted as inadvertent and a request was made to mark the form as defective, the Adjudicating Officer held that such rectification does not nullify the completed contravention. Emphasising that MCA filings are public records relied upon by regulators and stakeholders, the order held that responsibility for correctness squarely rests on the authorised signatory. Consequently, penalties of ₹10,000 each were imposed on the company and the signatory officer, with directions to rectify the filing within the stipulated time.
(Link: MCA ROC Kolkata Order Dated 16/01/2026)
H. Insolvency and Bankruptcy Board of India (IBBI)
SC, Execution cannot impose Personal Liability without Prior Adjudication: Case of Ansal Crown Heights Flat Buyers Association vs Ansal Crown Infrabuild Pvt Ltd, SC Judgement Dated 12th January 2026. The apex court held that once a moratorium is declared, execution proceedings must stop. It also clarified that directors or promoters cannot be made personally liable when no order was passed against them.
SC, Homebuyers Society denied Locus Standi to intervene in IBC Section 7 Appeal: Case of Elegna Coop Housing Society vs Edelweiss ARC Limited, SC Judgement Dated 15th January 2026. The apex court held that a society or Resident Welfare Association, not being a creditor in its own right and not recognised as an authorised representative of allottees under the IBC, has no locus standi to intervene in proceedings arising out of a petition under section 7 of IBC.
NCLAT, Non-Disclosure under Sec 89 of Companies Act, insufficient to prove Oppression or Mismanagement: Case of Satyanarayan Gupta vs Shivangan Realestate Pvt Ltd, NCLAT Delhi Judgement Dated 12th September 2025. The appellate tribunal ruled that section 89 non-disclosure attracts penalties but is not grounds for oppression claims, and that private MoUs cannot enforce disguised loan/share issues in company petitions. Thus, reinforcing that Section 89 non-compliance is a regulatory violation, not a trigger for oppression remedies.
(Link: NCLAT Delhi Judgement Dated 12/09/2025)
NCLAT, No bar on asset transfer in CIRP even if there was unregistered ‘Agreement to Sell’: Case of Late Babu Lal vs Jasrati Education Solutions Limited, NCLAT Delhi Judgement Dated 15th October 2025. The appellate tribunal held that an unregistered Agreement to Sell (A2S) does not prevent recognition of asset transfer in the context of Corporate Insolvency Resolution Process (CIRP).
IBBI Penalises IP R Thamodharan for allowing suspended directors to run operations without Approval: The IP delegated day to day management and overall operations of the corporate debtor to a director of suspended board without prior approval or subsequent ratification by Committee of Creditors. The DC found that such delegation violated statutory duties requiring the IRP/RP to assume control, preserve assets, and manage operations. The Committee also held that the IRP/RP failed to comply with GST laws by not obtaining a fresh GST registration for the corporate debtor during CIRP and by allowing the suspended management to file returns, contrary to statutory obligations and CBIC guidance. The DC suspended the registration for a period of one year.
(Link: IBBI Order Dated 13/01/2026)
I. Reserve Bank of India (RBI)
Export and Import of Goods and Services: RBI has issued the Foreign Exchange Management (Export and Import of Goods and Services) Regulations 2026, after a comprehensive review of the existing FEMA framework, To be, effective from 1st October 2026. Authorised dealers are directed to ensure strict compliance with FEMA, related rules and regulations, and the prevailing Foreign Trade Policy while handling export, import, and merchanting trade transactions. All references to the RBI must be routed through the PRAVAAH portal, and any doubtful transactions are to be reported to the Directorate of Enforcement.
(Link: RBI Circular 194/2026 Dated 16/01/2026)
Modified Interest Subvention Scheme for Short Term Loans for Agriculture through Kisan Credit Card (KCC): The circular informs about continuation of the Modified Interest Subvention Scheme (MISS) for short-term agriculture and allied activity loans availed through the Kisan Credit Card (KCC) for the financial year 2025–26. Under the scheme, farmers are eligible for short-term crop loans and allied activity loans up to an overall limit of Rs 3 lakh at a concessional interest rate of 7% per annum, supported by an interest subvention of 1.5% to lending institutions. Farmers who repay promptly will receive an additional 3% incentive, effectively reducing their interest burden to 4% per annum. It clarifies sub-limits for allied activities, priority to crop loans, benefits for warehouse receipt financing, and relief measures for loans restructured due to natural calamities.
(Link: RBI Circular 193/2026 Dated 13/01/2026)
Foreign Exchange Management (Guarantees) Regulations 2026: The circular mandates that banks facilitate guarantees involving non-residents strictly in accordance with the new regulations and ensure compliance with related regulatory instructions. It introduces comprehensive reporting of all guarantees i.e. issued, modified, or invoked, through a prescribed GRN format, with detailed reporting procedures to be notified separately.
(Link: RBI Circular 192/2026 Dated 12/01/2026)
FEMA Export and Import of Goods and Services Regulations 2026: RBI has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations 2026, replacing the 2015 export regulations and consolidating the framework for both exports and imports of goods and services. The regulations, to come into force on 1st October 2026. These prescribe detailed rules on declarations, receipt and payment mechanisms, timelines for realisation and repatriation of export proceeds, and payment for imports. They introduce uniform Export Declaration Form (EDF) requirements for goods and services, empower Authorised Dealers to monitor, extend timelines, allow reductions, set-offs, and third-party payments, and mandate strict reporting through EDPMS, IDPMS and FETERS. They also lay down conditions for advance payments, unrealised exports, merchanting trade transactions, project exports, INR trade settlement, and internal policies of Authorised Dealers.
(Link: RBI FEMA Notification Dated 13/01/2026)
RBI issues Integrated Ombudsman Scheme 2026: RBI issued the revised Integrated Ombudsman Scheme that will come into effect from 1st July 2026. It is expected to strengthen the Reserve Bank Ombudsman framework and bring about further efficiency in resolution of complaints. Complaints of customers of Regulated Entities (REs) relating to deficiency in service, received through e-mail and physical form, including postal and hand-delivered complaints, will be addressed and sent to the Centralised Receipt and Processing Centre of the Reserve Bank. While considering the complaints, RBI Ombudsman/RBI Deputy Ombudsman will take into account, the principles of banking law and practice, as also the directions, instructions, guidelines or regulations issued by the REs and such other factors as may be relevant.
(Link: RBI Press Release Dated 16/01/2026, Scheme)
RBI Internal Ombudsman Directions 2026: RBI has issued the Master Directions specific to each category of regulated entity. The directions significantly strengthen internal grievance redressal and ensure fairness before customer complaints are rejected. It mandate appointment of an independent Internal Ombudsman (IO) with fixed tenure, and safeguards against conflicts of interest. All partially resolved or wholly rejected complaints must be automatically escalated to the IO within prescribed timelines through a fully automated complaints system, culminating in a reasoned decision within 30 days. The IO may recommend compensation, conduct root-cause analysis, and suggest policy changes, while not directly handling complaints from customers. Any override of the IO’s decision requires approval and reporting.
(Link: Press Release RBI Master Directions Dated 14/01/2026)
(Link: Commercial Banks RBI Master Directions 381/2026 Dated 14/01/2026)
(Link: Small Finance Banks RBI Master Directions 382/2026 Dated 14/01/2026)
(Link: Payments Banks RBI Master Directions 383/2026 Dated 14/01/2026)
(Link: NBFC RBI Master Directions 384/2026 Dated 14/01/2026)
(Link: Non-Bank PPI Issuers RBI Master Directions 385/2026 Dated 14/01/2026)
(Link: Credit Information Companies RBI Master Directions 386/2026 Dated 14/01/2026)
Draft Directions on Clarification on Owned Fund/Tier 1 Capital for NBFCs/ARCs and Concentration Norms: The proposals include clarifications on the computation of Owned Fund and Tier 1 Capital. The draft amendments also revise how Tier 1 Capital is to be reckoned for compliance with credit and investment concentration norms. A key proposal across the directions is the inclusion of quarterly profits in Owned Fund or Tier 1 Capital, subject to conditions such as limited review of quarterly financials by statutory auditors, adjustment for average dividends paid over the last three years, and full deduction of current-year losses. It also clarify that applicable capital for concentration norms should be based on the latest available audited or limited-reviewed financial statements. Certain entities are exempted from deducting Right-of-Use assets where the underlying leased asset is tangible.
(Link: Press Release RBI Draft Directions Dated 13/01/2026)
(Link: NBFC Prudential Norms Draft Directions Dated 13/01/2026)
(Link: NBFC Concentration Risk Draft Directions Dated 13/01/2026)
(Link: Housing Finance Companies Draft Directions Dated 13/01/2026)
(Link: Core Investment Companies Draft Directions Dated 13/01/2026)
(Link: Mortgage Guarantee Companies Draft Directions Dated 13/01/2026)
(Link: Asset Reconstruction Companies Draft Directions Dated 13/01/2026)
(Link: Standalone Primary Dealers Draft Directions Dated 13/01/2026)
Draft Directions on Net Open Position: The draft proposes a comprehensive overhaul of the Net Open Position (NOP) framework for foreign exchange risk. The key proposals include elimination of separate onshore and offshore NOP computation, inclusion of accumulated surplus of overseas operations in NOP, and requirement to maintain forex risk capital on actual NOP on a continuous, end-of- day basis. It also revises the shorthand method for NOP calculation by treating gold separately, permits limited exclusion of qualifying structural foreign exchange positions subject to strict conditions, and standardises exclusions for capital-deducted items and non-performing securities. Most entities would apply a 9% capital charge on overall NOP, while Standalone Primary Dealers would apply a higher 15% charge.
(Link: Press Release RBI Draft Directions Dated 14/01/2026)
(Link: Commercial Banks Prudential Norms Draft Dated 14/01/2026)
(Link: Small Finance Banks Prudential Norms Draft Dated 14/01/2026)
(Link: Regional Rural Banks Prudential Norms Draft Dated 14/01/2026)
(Link: Local Area Banks Prudential Norms Draft Dated 14/01/2026)
(Link: Urban Cooperative Banks Prudential Norms Draft Dated 14/01/2026)
(Link: Rural Cooperative Banks Prudential Norms Draft Dated 14/01/2026)
(Link: AIFIs Prudential Norms Draft Dated 14/01/2026)
(Link: Standalone Primary Dealers Draft Dated 14/01/2026)
Discussion Paper on Licensing of Urban Co-operative Banks (UCBs): The Licensing of new UCBs has remained on hold since 2004 due to widespread financial weaknesses observed in newly licensed banks. The paper notes that the UCB sector has since undergone significant regulatory strengthening, consolidation, and improvement in financial health, supported by enhanced RBI powers, a tiered regulatory framework, and the establishment of an Umbrella Organisation. It examines whether it is appropriate to resume licensing and, if so, what eligibility criteria should apply. It outlines arguments both for and against reopening licensing, highlighting issues such as governance, capital adequacy, technology gaps, and risk management.
(Link: RBI Discussion Paper Dated 13/01/2026, Press Release)
J. Miscellaneous
CCPA, Forced Service Charge by restaurant & GST thereon is Unfair Trade Practice: Case of China Gate Restaurant Private Limited, CCPA Order Dated 29th December 2025. Central Consumer Protection Authority (CCPA) has imposed a Rs 50,000 fine for levying mandatory service charges in violation of consumer protection norms and court directions. The restaurant added a 10% service charge to customer bills and charged GST on the service charge, despite clear guidelines that such charges must be voluntary and cannot be included automatically. The action followed a complaint filed through the National Consumer Helpline, who alleged that the restaurant refused to remove the service charge and misbehaved when the consumer objected to it.
SC, Multiple cheques for one transaction gives rise to separate prosecution under section 138 of NI Act: Case of Sumit Bansal vs MGL Developers and Promotors, SC Judgement Dated 8th January 2026. The apex court held that under Section 138 of the Negotiable Instrument (NI) Act, a separate cause of action arises upon each dishonour of a Cheque. Thus, multiple cheques for one transaction will give arise to separate prosecution.
SC, Stamp Duty demand quashed where tenancy Never Surrendered: Case of Vayetti Sirinivasrao vs Gaineedi Jagjyothi, SC Judgement Dated 15th January 2026. The apex court held that an agreement to sell executed with an existing tenant, who was already in possession long prior to the agreement, does not attract stamp duty as a “sale” or deemed conveyance under Andhra Pradesh Stamp Act.
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Compiled by:- CMA Yash Paul Bhola, MBA, FCMA, Former Director (Finance), National Fertilizers Limited.
Disclaimer: The contents of this article are for informational purposes only. The user may refer to the relevant notification/ circular/ decisions issued by the respective authorities for specific interpretation and compliances related to a particular subject matter)
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