Article contains updates with respect to Notifications, Circulars, Rules, Regulations issued in the Month of February 2021 by Ministry of Corporate Affairs (MCA), Securities Exchange Board of India, Updates of the Reserve Bank of India (RBI), Insolvency and Bankruptcy Board of India (IBBI) and also includes Recent Corporate News. Article attempts to analyses Notifications, Circulars, Rules, Regulations issued in the Month of February 2021 in simple Language for understanding of Readers.
Page Contents
1. Updates of the Ministry of Corporate Affairs (MCA)
⇒ Rules
♦ The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2021:
- The Ministry of Corporate Affairs (MCA) has vide notification dated 1st February, 2021 notified the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2021.
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Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2021 With effect from 22nd January, 2021 ⇓ |
- Such notification has amended the Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 by inserting the new sub-rule 1A as follows;
“A scheme of merger or amalgamation under section 233 of the Act may be entered into between any of the following class of companies, namely:
(i) two or more start-up companies; or
(ii) one or more start-up company with one or more small company.
Explanation – For the purposes of this sub-rule, “start-up company” means a private company incorporated under the Companies Act, 2013 or Companies Act, 1956 and recognized as such in accordance with notification number G.S.R. 127 (E), dated the 19th February, 2019 issued by the Department for Promotion of Industry and Internal Trade.”
♦ The Companies (Incorporation) Second Amendment Rules, 2021:
- The Ministry of Corporate Affairs (MCA) vide its notification dated 1st February 2021 amended few provisions of the Companies (Incorporation) Rules, 2014.
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Companies (Incorporation) Second Amendment Rules, 2021 ⇓ With effect from 1st April, 2021 Link: https://taxguru.in/company-law/companies-incorporation-second-amendment-rules-2021.html |
- Such notification has amended the Rule 3 of the Companies (Incorporation) Rules, 2014 where the MCA made space for easing norms around setting up of One Person Company (OPC) by reducing the residency limit of NRIs from 182 to 120 days. Earlier, only Indian resident citizens were allowed to form one person companies in India.
- MCA has also made certain omissions of threshold limits in Rule 7 of the Companies (Incorporation) Rules, 2014.
♦ The Companies (Specification of Definitions Details) Amendment Rules, 2021:
- The Ministry of Corporate Affairs (MCA) vide its notification dated 1st February, 2021 amended the definition of Small Company by making changes into the threshold limits.
- The previous definition was based on thresholds defined by the Companies Act which mentioned a maximum paid up capital of Rs.50 lakh and turnover of Rs.2 crore for the immediately preceding fiscal.
- The changes, announced by finance minister Nirmala Sitharaman during her budget speech and will come into effect from 1st April, 2021.
- Following is the revised threshold limits of the Small Company;
“Small Company means the company having paid up capital and turnover of the small company shall not exceed rupees two crores and rupees twenty crores respectively.”
♦ The Producer Companies Rules, 2021:
- The Ministry of Corporate Affairs (MCA) vide its notification dated 11th February, 2021 notified the Producer Companies Rules, 2021.
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Producer Companies Rules, 2021 ⇓ With effect from 11th February, 2021 Link: https://taxguru.in/company-law/producer-companies-rules-2021.html |
- Following are the notified the Rules;
| SR. NO. | PARTICULARS |
| 1. | Rule 1: Short title and commencement |
| 2. | Rule 2: Applicability |
| 3. | Rule 3: Definitions |
| 4. | Rule 4: Change of place of registered office from one State to another |
| 5. | Rule 5: Investment of general reserves |
♦ The Companies (Share Capital and Debentures) Amendment Rules, 2021:
- The Ministry of Corporate Affairs (MCA) vide its notification dated 11th February, 2021 notified the Companies (Share Capital and Debentures) Amendment Rules, 2021 to further amend the Companies (Share Capital and Debentures) Rules, 2014.
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Companies (Share Capital and Debentures) Amendment Rules, 2021 ⇓ With effect from 1st April, 2021 Link: https://taxguru.in/company-law/companies-share-capital-debentures-amendment-rules-2021.html |
- The said amendment brings in a new Rule 12A which notifies the period for notice of issue of share capital under section 62.
- According to the notification the time period within which the offer of acceptance towards the issue of further shares by a company shall be not less than seven days from the date of offer.
- The amendment will help the company to close the process at the earliest, as the minimum time during which the Rights Offer can be kept open is now reduced to seven days and allotments could be made early. However, the maximum time limit for which an offer can be kept open is unchanged at 30 days from the date of offer.
♦ The Companies (Specification of definitions details) Second Amendment Rules, 2021:
- Ministry of Corporate Affairs (MCA) has amended the definition of the listed companies. For this purpose, the MCA has amended the Companies (Specification of definitions details) Rules 2014. Rule 2A has been inserted after Rule 2 in the Companies (Specification of definitions details) Rules 2014.
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Companies (Specification of definitions details) Second Amendment Rules, 2021 ⇓ With effect from 1st April, 2021 |
- Now the following companies shall not be considered as listed companies for the purposes of compliance under the provisions of the Companies Act, 2013;
√ public companies which doesn’t have their equity shares listed on stock exchanges but have listed their NCDs and/or NCRPS on stock exchanges which have been issued by way of private placement;
√ private companies which have listed their NCDs on stock exchanges which have been issued by way of private placement;
√ public companies which doesn’t have equity shares listed on stock exchanges but have them listed on a permitted stock exchanges in permissible foreign jurisdictions.
⇒ Notifications
♦ Commencement Notification dated 11th February, 2021:
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Commencement Notification dated 11th February, 2021 ⇓ With effect from 11th February, 2021 Link: https://taxguru.in/company-law/mca-notifies-chapter-related-producer-companies-wef-11-02-2021.html |
- The Ministry of Corporate Affairs (MCA) notified that the provisions of the Companies (Amendment) Act, 2020 which will be enforced from 11th February, 2021.
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Commencement Notification dated 11th February, 2021 ⇓ With effect from 11th February, 2021 Link: https://taxguru.in/company-law/mca-notifies-chapter-related-producer-companies-wef-11-02-2021.html |
- Following is the gist of the enforced provisions of the Companies (Amendment) Act, 2020;
| SR. NO. | PROVISION REFERENCE OF COMPANIES (AMENDMENT) ACT 2020 | AMENDED PROVISION OF COMPANIES ACT, 2013 |
| 1. | Section 52 | Amendment to Section 378:
Insertion of new Chapter XXIA |
| 2. | Section 66 | Amendment to Section 465:
Repeal of Certain Enactments and Savings |
⇒ Updates
♦ Extension of Certain Sections of the Companies Act, 2013 to LLP Act, 2008:
- Ministry of Corporate Affairs (MCA) vide a message/ advisory dated 18th day of February, 2021 has decided to extend certain sections of the Companies Act, 2013 to the LLP Act, 2008. Through this intimation, a total eight sections with respect to the Register of significant beneficial owners, disqualifications of directors, conduct of inquiries and inspections and non-cognizable offences will soon be applicable to LLPs.
- The Central Government, in Ministry of Corporate Affairs, under section 67(1) of LLP Act, 2008, following provisions will be extending to Limited Liability Partnerships (LLPs):
| Sections | Particulars |
| Section 90 (1) to (11) | Register of significant beneficial owners in a company |
| Section 164 (1) & (2) | Disqualifications for Appointment of Director |
| Section 165 (1), (3) to (6) | Number of Directorships |
| Section 167 (1) to (3) | Vacation of Office of Director |
| Section 206 (5) | Power to Call for Information, Inspect Books and Conduct Inquiries |
| Section 207 (3) | Conduct of Inspection and Inquiry |
| Section 252 (1) to (3) | Appeal to Tribunal |
| Section 439 (1) to (4) | Offences to be Non-cognizable |
♦ Memorandum of Understanding (MOU) between the Ministry of Corporate Affairs (MCA) and Central Board of Indirect Taxes and Customs (CBIC):
- A formal Memorandum of Understanding (MOU) was signed between the Ministry of Corporate Affairs (MCA) and Central Board of Indirect Taxes and Customs (CBIC), Ministry Of Finance for data exchange between the two organizations.
- The MoU is in line with the vision of MCA and CBIC to harness data capabilities to ensure effective enforcement. Both the organizations are going to benefit from access to each other’s databases which include details of import-export transactions and consolidated financial statements of companies registered in the country. The data sharing arrangement gains significance in light of development of MCA21 Version 3 which will utilize state of the art technology for enhancing ease of doing business in India and improve the regulatory enforcement and similar steps by CBIC like the launch of ADVAIT (Advanced Analytics in Indirect Taxation) a 360-degree taxpayer profiling tool. AI/ML, data analytics will play a critical role in achieving this synergy.
- The MoU will facilitate the sharing of data and information between MCA and CBIC on an automatic and regular basis. It will enable sharing of specific information such as details of Bill of Entry (Imports), Shipping Bill (Exports) Summary from CBIC and financial statements filed with the Registrar by corporates, returns of allotment of shares. The MoU will ensure that both MCA and CBIC have seamless linkage for regulatory purposes. In addition to regular exchange of data, MCA and CBIC will also exchange with each other, on request, any information available in their respective databases, for the purpose of carrying out scrutiny, inspection, investigation and prosecution.
- The MoU comes into force from the date it was signed and is an ongoing initiative of MCA and CBIC, who are already collaborating through various existing mechanisms. A Data Exchange Steering Group also has been constituted for the initiative, which will meet periodically to review the data exchange status and take steps to further improve the effectiveness of the data sharing mechanism.
- The MoU marks the beginning of a new era of cooperation and synergy between the two organizations.
2. Updates of the Securities Exchange Board of India Rules or Regulation
⇒ Circulars
♦ Setting up of Limited Purpose Clearing Corporation (LPCC) by Asset Management Companies (AMCs) of Mutual Funds:
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Circular on setting up of Limited Purpose Clearing Corporation (LPCC) by Asset Management Companies (AMCs) of Mutual Funds dated 2nd February, 2021 ⇓ With effect from 2nd February, 2021 Link: https://taxguru.in/sebi/setting-up-lpcc-amcs-mutual-funds.html |
- With the objective of development of the corporate bond market from the perspective of mutual funds, the Mutual Fund Advisory Committee (MFAC) of SEBI had constituted a Working Group consisting of representatives of various Mutual Funds, Clearing Corporation of India Limited (CCIL) and AMFI for detailed deliberation. The Working Group amongst other suggestions recommended that AMCs of Mutual Funds should set up a Limited Purpose Clearing Corporation (LPCC) for clearing and settling repo transactions in corporate debt securities by contributing an amount of INR 150 Crore. This was recommended as it was felt that mutual funds would be natural beneficiaries of such a clearing corporation. The recommendation of setting up LPCC was also deliberated with various issuers of corporate bonds and in Corporate Bonds and Securitization Advisory Committee (CoBoSAC).
- Upon deliberations, SEBI Board in its meeting held on September 29, 2020, approved a proposal to facilitate setting up of a LPCC for clearing and settling repo transactions in corporate debt securities and accordingly Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 (SECC Regulations), have been amended vide gazette notification no. SEBI/LAD-NRO/GN/2020/32 dated October 08, 2020.
- Accordingly, it has been decided that AMCs shall contribute INR 150 Cr. towards share capital of LPCC in proportion to the Asset Under Management (AUM) of open ended debt oriented mutual fund schemes (excluding overnight, gilt fund and gilt fund with 10 year constant duration but including conservative hybrid schemes) managed by them.
- The contribution shall be based on Average AUM of debt oriented schemes as detailed above for the Financial Year (FY) 2019-20. In this regard, AMFI shall calculate contribution per AMC based on the Average AUM of aforementioned schemes for the FY 2019-20 and inform all AMCs. Accordingly, it will be obligatory on the part of AMC(s) to contribute towards the share capital of LPCC.
- The setting up of LPCC and making the aforesaid contribution shall be in compliance with the net worth requirements, other conditions and timelines, if any, as per SECC Regulations and circulars issued thereunder from time to time.
- AMCs shall ensure that the net worth as prescribed under Regulation 21(f) of SEBI (Mutual Funds) Regulations, 1996 shall be maintained over and above the contribution made towards setting up of the LPCC.
♦ Revised disclosure formats under Regulation 7 of SEBI (Prohibition of Insider Trading) Regulations, 2015:
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Circular on Revised disclosure formats under Regulation 7 of SEBI (Prohibition of Insider Trading) Regulations, 2015 dated 9th February, 2021 ⇓ With effect from 9th February, 2021 |
- SEBI, vide Circular nos. CIR/ISD/01/2015 dated May 11, 2015 and CIR/ISD/02/2015 dated September 16, 2015, had specified the formats for disclosures under Regulation 7 of SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”).
- In light of amendments to the PIT Regulations effecting the inclusion of member of the promoter group, and designated person in place of employee, in Regulation 7 of PIT Regulations; and on the basis of feedback received from market participants and stock exchanges, the relevant disclosure formats (Forms B to D) have been suitably revised.
3. Updates of the Reserve Bank of India (RBI)
⇒ Notifications
♦ Risk-Based Internal Audit (RBIA):
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Notification on Risk-Based Internal Audit (RBIA) dated 3rd February, 2021 ⇓ With effect from 3rd February, 2021 Link: https://taxguru.in/rbi/risk-based-internal-audit-rbia.html |
- It is important to note that the notification regarding Risk-based Internal Audit (RBIA) is applicable to all deposit taking Non-Banking Finance Companies (NBFCs), all non-deposit taking NBFCs (including Core Investment Companies) with asset size of ₹5,000 crore and above and all Primary (Urban) Co-operative Banks (UCBs) with asset size of ₹500 crore and above.
- An independent and effective internal audit function in a financial entity provides vital assurance to the Board and its senior management regarding the quality and effectiveness of the entity’s internal control, risk management and governance framework. The essential requirements for a robust internal audit function include, inter alia, sufficient authority, proper stature, independence, adequate resources and professional competence.
- The range and commonality of risks faced by Supervised Entities (SEs) would warrant effective and harmonized systems and processes for the internal audit function across the SEs based on certain common guiding principles.
- Further, in order to ensure smooth transition from the existing system of internal audit to RBIA, the concerned NBFCs and UCBs may constitute a committee of senior executives with the responsibility of formulating a suitable action plan. The committee may address transitional and change management issues and should report progress periodically to the Board and senior management.
♦ Loans and advances to directors, their relatives, and firms / concerns in which they are interested:
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Notification on Loans and advances to directors, their relatives, and firms / concerns in which they are interested dated 5th February, 2021 ⇓ With effect from 5th February, 2021 Link: https://taxguru.in/rbi/rbi-directives-loans-advances-directors-relatives.html |
- Such notification is applicable to all Primary (Urban) Co-operative Banks. The Banking Regulation Act, 1949 (“the Act”) has been amended by the Banking Regulation (Amendment) Act, 2020 notified for the Primary (Urban) Co-operative Banks (UCBs) on September 29, 2020 and deemed to have been effective from June 29, 2020. Consequently, section 20 of the principal Act has become applicable to UCBs. Keeping in view the above, the extant directions on the subject issued to UCBs have been reviewed and the revised directions are issued as under.
- UCBs shall not make, provide or renew any loans and advances or extend any other financial accommodation to or on behalf of their directors or their relatives, or to the firms / companies / concerns in which the directors or their relatives are interested (collectively called as “director-related loans”). Further, the directors or their relatives or the firms / companies / concerns in which the directors or their relatives are interested shall also not stand as surety/guarantor to the loans and advances or any other financial accommodation sanctioned by UCBs. ‘Advances’ for the purpose shall include all types of funded / working capital limits such as cash credits, overdrafts, credit cards, etc.
- The following categories of director-related loans shall, however, be excluded from “loans and advances” for the purpose of these directions:
√ Regular employee-related loans to staff directors, if any, on the Boards of UCBs;
√ Normal loans, as applicable to members, to the directors on the Boards of Salary Earners’ UCBs;
√ Normal employee-related loans to Managing Directors / Chief Executive Officers of UCBs;
√ Loans to directors or their relatives against Government Securities, Fixed Deposits and Life Insurance Policies standing in their own name.
- Explanation: For the purpose of these directions –
> The term ‘any other financial accommodation’ shall include funded and non-funded credit limits and underwritings and similar commitments, as under:
√ The funded limits shall include loans and advances by way of bill/cheque purchase/ discounting, pre-shipment and post-shipment credit facilities and deferred payment guarantee limits extended for any purpose including purchase of capital equipment and acceptance limits in connection therewith sanctioned to borrowers, and guarantees by issue of which a bank undertakes financial obligation to enable its constituents to acquire capital assets. It shall also include investments which are in the nature of / in lieu of credit.
√ The non-funded limits shall include letters of credit, guarantees other than those referred to in paragraph (a) above, underwritings and similar commitments. It shall also include off-balance sheet exposure in the form of derivatives.
> The word “relative” shall have the meaning as under:
A person shall be deemed to be a relative of another, if and only if:-
√ They are members of a Hindu Undivided Family; or
√ They are husband and wife; or
√ The one is related to the other (or vice-versa) in the manner indicated below:
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-
- Father (including step-father)
- Mother (including step-mother)
- Son (including step-son)
- Son’s wife
- Daughter (including step-daughter)
- Daughter’s husband
- Brother (including step-brother)
- Brother’s wife
- Sister (including step-sister)
- Sister’s husband
-
> The word “interested” shall mean the director of the UCB or his relative, as the case may be, being a director, managing agent, manager, employee, proprietor, partner, coparcener or guarantor, as the case may be, of the firm / company / concern (including HUF):
Provided that a director of a UCB or his relative shall also be deemed to be interested in a company, being the subsidiary or holding company, if he/she is a director, managing agent, manager, employee or guarantor of the respective holding or subsidiary company:
Provided further that a director of a UCB shall also be deemed to be interested in a company/firm if he/she holds substantial interest in or is in control of the company/firm or in a company, being the subsidiary or holding company, if he/she holds substantial interest in or is in control of the respective holding or subsidiary company:
Provided further that a relative of a director of a UCB shall also be deemed to be interested in a company/firm if he/she is a major shareholder or is in control of the company/firm or in a company, being the subsidiary or holding company, if he/she is a major shareholder or is in control of the respective holding or subsidiary company:
> The term “control” shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in another manner.
> The term “major shareholder” shall mean a person holding 10% or more of the paid up share capital.
> UCBs shall submit information pertaining to their director-related loans as at the end of each quarter (i.e. 31 March, 30 June, 30 September and 31 December), in the format given in the Annex to such directions, to the concerned Regional Office of Department of Supervision of Reserve Bank of India within fifteen days from the end of the respective quarter. In the case of UCBs functioning under Administrator(s) / Person(s)-in-Charge / Special Officers, the UCBs concerned should submit the information in respect of loans and advances availed by the Administrator(s) / Person(s)-in-Charge / Special Officers, including their relatives.
> These directions supersede the earlier directives / instructions issued on the subject and shall come into force immediately. The existing director-related loans sanctioned/granted by UCBs in terms of the earlier directives / instructions prior to the issue of this circular, if any, may continue till their respective maturity and shall not be renewed further.
> A copy of this Notification should be placed before the Board of Directors of your bank in its ensuing meeting and a confirmation thereof should be sent to the concerned Regional Office of the Department of Supervision of Reserve Bank of India.
♦ Maintenance of Cash Reserve Ratio (CRR):
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Notification on Maintenance of Cash Reserve Ratio (CRR) dated 5th February, 2021 ⇓ With effect from 5th February, 2021 Link: https://taxguru.in/rbi/rbi-decides-gradually-restore-crr-two-phases.html |
- The cash reserve ratio (CRR) of all banks was reduced by 100 basis points to 3.00 per cent of their Net Demand and Time liabilities (NDTL) effective from the reporting fortnight beginning March 28, 2020. The dispensation was available for a period of one year ending March 26, 2021.
- As announced in paragraph 2 of the Statement on Developmental and Regulatory Policies dated February 05, 2021, it has been decided to gradually restore the CRR in two phases in a non-disruptive manner. Accordingly, banks are required to maintain the CRR at 3.50 per cent of their NDTL effective from the reporting fortnight beginning March 27, 2021 and 4.00 per cent of their NDTL effective from fortnight beginning May 22, 2021.
♦ Section 24 of the Banking Regulation Act, 1949 – Maintenance of Statutory Liquidity Ratio (SLR) – Marginal Standing Facility (MSF) – Extension of Relaxation:
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Notification on Section 24 of the Banking Regulation Act, 1949 – Maintenance of Statutory Liquidity Ratio (SLR) – Marginal Standing Facility (MSF) – Extension of Relaxation dated 5th February, 2021 ⇓ With effect from 5th February, 2021 Link: https://taxguru.in/rbi/banks-allowed-continue-with-msf-relaxation-up-to-september-30-2021.html |
- As per circulars DOR.No.Ret.BC.52/12.01.001/2019-20 dated March 27, 2020, DOR.RRB.No.28/31.01.001/2020-21 dated December 4, 2020 and Press Release No.2020-2021/401 dated September 28, 2020 on Marginal Standing Facility (MSF), wherein the banks were allowed to avail of funds under the MSF by dipping into the Statutory Liquidity Ratio (SLR) up to an additional one per cent of their net demand and time liabilities (NDTL), i.e., cumulatively up to three per cent of NDTL. This facility, which was initially available up to June 30, 2020 was later extended in phases up to March 31, 2021 providing comfort to banks on their liquidity requirements and also to enable them to meet their Liquidity Coverage Ratio (LCR) requirements.
- As announced in the Statement of Developmental and Regulatory Policies of February 05, 2021, with a view to providing comfort to banks on their liquidity requirements, banks are allowed to continue with the MSF relaxation for a further period of six months, i.e., up to September 30, 2021.
♦ Credit to MSME Entrepreneurs:
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Notification on Credit to MSME Entrepreneurs dated 5th February, 2021 ⇓ With effect from 5th February, 2021 |
- In terms of paragraph 5 of the Statement on Developmental and Regulatory Policies of February 5, 2021, Scheduled Commercial Banks will be allowed to deduct the amount equivalent to credit disbursed to ‘New MSME borrowers’ from their Net Demand and Time Liabilities (NDTL) for calculation of the Cash Reserve Ratio (CRR). For the purpose of this exemption, ‘New MSME borrowers’ shall be defined as those MSME borrowers who have not availed any credit facilities from the banking system as on January 1, 2021. This exemption will be available only up to ₹25 lakh per borrower disbursed up to the fortnight ending October 1, 2021, for a period of one year from the date of origination of the loan or the tenure of the loan, whichever is earlier.
- Banks are required to report the exemption availed at the end of a fortnight, in Annex A to Form A as per Master Circular on Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) dated July 1, 2015, under the item “Any other liabilities coming under the purview of zero prescription” at VIII.1. Proper fortnightly records of credit disbursed to new MSME borrowers/CRR exemption claimed, duly certified by the Chief Financial Officer (CFO) or an equivalent level officer, must be maintained by banks for supervisory review.
♦ Remittances to International Financial Services Centers (IFSCs) in India under the Liberalized Remittance Scheme (LRS):
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Notification on Remittances to International Financial Services Centers (IFSCs) in India under the Liberalized Remittance Scheme (LRS) dated 16th February, 2021 ⇓ With effect from 16th February, 2021 Link: https://taxguru.in/rbi/banks-allow-resident-individuals-remittances-lrs-ifscs-india.html |
- With a view to deepen the financial markets in International Financial Services Centers (IFSCs) and provide an opportunity to resident individuals to diversify their portfolio, the extant guidelines on Liberalized Remittance Scheme (LRS) have been reviewed and it has been decided to permit resident individuals to make remittances under LRS to IFSCs set up in India under the Special Economic Zone Act, 2005, as amended from time to time. Accordingly, AD Category – I banks may allow resident individuals to make remittances under LRS to IFSCs in India, subject to the following conditions:
√ The remittance shall be made only for making investments in IFSCs in securities, other than those issued by entities/companies resident (outside IFSC) in India.
√ Resident Individuals may also open a non interest bearing Foreign Currency Account (FCA) in IFSCs, for making the above permissible investments under LRS. Any funds lying idle in the account for a period upto 15 days from the date of its receipt into the account shall be immediately repatriated to domestic INR account of the investor in India.
√ Resident Individuals shall not settle any domestic transactions with other residents through these FCAs held in IFSC.
- AD Category – I banks, while allowing such remittances, shall ensure compliance with all other terms and conditions, including reporting requirements prescribed under the Scheme. It may be noted that any person resident in India (outside IFSC) entering into any transaction with a person/entity in IFSC shall only be governed by regulations/directions and rules issued/notified by the Reserve Bank of India and the Government of India respectively under Foreign Exchange Management Act (FEMA), 1999. Further, compounding of any contravention of FEMA provision by such person resident in India shall be dealt by the Reserve Bank of India in accordance with the extant instructions/provisions on compounding of contraventions under FEMA.
- Master Direction No.7 (Master Direction – Liberalized Remittance Scheme) is being updated to reflect the above changes. AD Category – I banks should bring the contents of this circular to the notice of their constituents and customers.
4. Updates of the Insolvency and Bankruptcy Board of India (IBBI)
⇒ Circulars
♦ Providing copy of application to the Board, as mandated under Rule 9 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019:
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Circular on providing copy of application to the Board, as mandated under Rule 9 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 dated 2nd February, 2021 ⇓ With effect from 2nd February, 2021 |
- Rule 9 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 mandates an applicant to provide a copy of the application filed under sub-section (1) of section 94 or sub-section (1) of section 95 of the Insolvency and Bankruptcy Code, 2016 (Code) for initiation for insolvency resolution process of a personal guarantor to a corporate debtor, inter alia, to the Board for its record.
- For convenience of applicants, the Board has made available a facility on its website at https://ibbi.gov.in/intimation-applications/iaaa-personal-one for providing a copy of the application online to the Board. The format for submission is at Annexure A. A step-by-step guide for submission of the application is at Annexure B. On submission of the application online, the applicant shall get an acknowledgement. The applicants are encouraged to avail of this facility.
5. Recent Corporate News
| Adani Group releases pledge on 10 lakh share of AGEL, 1.38 cr shares of ATL; |
| Warren Buffett’s Berkshire snaps up record $24.7 bn of own stock; |
| DHFL resolution: Co receives no objection from RBI, files application with NCLT; |
| Maruti Suzuki crosses 20 lakh cumulative exports mark; |
| RBI fines Bank of Maharashtra with ₹2 cr for non-compliance of various norms; |
| DLF plans to raise up to ₹395 cr via issue of debentures; |
| Ashok Leyland to buy Nissan’s stake in Hinduja Tech for Rs70.20 crore; |
| Wipro launches Cisco Business Unit to co-develop solutions; |
| Bharti Airtel raises $1.25 billion via overseas bonds; |
| Just Dial launches its exclusive B2B platform, Jd Mart; |
| IIFL and Axis Securities win bids to acquire Karvy accounts; |
| Piramal Group appoints Kalpesh Kikani as CEO of Piramal Alternatives; |
| Apple partner Foxconn to form EV partnership with Fisker; |
| RIL prices CBM gas at $6 per mBtu, invites bids for sale; |
| Bosch investing ₹800 crore to upgrade Bengaluru facility to fully AIoT-enabled campus; |
| Reliance seeks bids for coal gas for CBM blocks in Madhya Pradesh at minimum $6; |
| Essar Power to set up 90 MW solar plant in Madhya Pradesh for ₹300 crore; |
| Tata Power raises ₹9,000 crore via NCDs; |
| Investcorp to invest $10.36 million in Safari Industries; |
| Flipkart to add 25,000 electric vehicles to logistics fleet by 2030; |
| Jet creditors to be paid ₹600 cr over two years; |
| Heranba Industries IPO subscribed 82% on Day 1. |
Disclaimer:
The entire contents of this newsletter have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer the relevant existing provisions of applicable laws. The user of this information agrees that the information is not professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. Further, in no event shall I be liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.
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