RBI today raised the annual limit of Foreign Currency Convertible Bonds (FCCBs) for companies to USD 750 million under the automatic route, which does not require prior permission from it. Corporates in specified service sectors like hotels, hospitals and software, can raise FCCBs up to USD 200 million subject to the condition that the proceeds would not be used for acquisition of land.
As Asset Liability Management plays a vital role in the sound management of the insurance business, Authority vide its Circular No: IRDA/ACT/CIR/MISC/081/05/2010, May 13, 2010, has mandated all the non-life insurers to provide the details of ALM activities undertaken by them Section-11 on ‘Investments and ALM’ of Financial Condition Report (FCR) and also discussed the framework of ALM in its guidelines on Corporate Governance. On thorough examination of the details of ALM activities submitted by the non-life insurers in the FCR for the year ended March 31, 2010, it appeared that these details are incomplete and inconsistent. As the mandate by the Authority was very broad, each insurer had adopted their own measures in reporting such details in FCR. In this regard, the following framework shall be put in place by the insurers.
Withdrawal of the facility of re-investment – It has been decided that henceforth re-investment period shall not be allowed for all new allocations of debt limit to FIIs/sub-accounts. Thus, limits acquired in the bidding sessions henceforth shall expire/lapse on either sale or redemption at maturity of the debt investments. These limits then shall again be allocated in subsequent bidding processes.
Circular No. DNPD/8/2011, Dated 30-12-2011 -1. It has now been decided to permit the introduction of cash settled futures on 2-year and 5-year notional coupon bearing Government of India (GoI) security on currency derivatives segment of Stock Exchanges. Eligible Stock Exchanges may do so after obtaining prior approval from SEBI.
On cancellation of the contracts, gains may be passed on to the customer subject to the customer providing a declaration that he is not going to rebook the contract or that the contract has been cancelled on account of cancellation of the underlying exposure.
Circular No. 54/2011-Customs it is clarified that all cases of lease, gift, sale or subletting or transfer of the premises in any other manner, in a customs area by major ports may be firstly examined to see whether required permission from the Central Government/ Ministry / Cabinet Committee has already been obtained or not. In cases where appropriate authority has already given permission for such lease or transfer of premises, then necessary written permission may be given by the Commissioner for such lease or transfer. On the contrary, if no approval of the Government has been obtained, then appropriate action may be initiated against the erring Custodian under the said Regulations and the Customs Act, 1962.
Policy Circular No. 51(RE-2010)/2009-14 Through Notification No. 40 (RE-2010)/2009-14 dated 31.03.2011, export of cotton yarn was made “Free” subject to registration of export contracts with DGFT, for ITC(HS) Code 5205, 5206 & 5207. Procedure for registration of contracts of cotton yarn was notified through Policy Circular No. 27 of 01.04.2011. Thereafter, Trade Notice No. 19 dated 30.08.2011 stipulating procedure for imposition of penalty for failure to export cotton yarn in terms of Policy Circular No. 27 was issued.
In case capital goods have been imported by the contractor/sub-contractor and supplied as such to project authorities, then custom duties paid on such imports can not be refunded back as deemed export duty drawback under paragraph 8.3(b) of FTP.
Export-Import Bank of India (Exim Bank) has concluded an Agreement dated July 11, 2011 with the Government of the Democratic Republic of Congo, making available to the latter, a Line of Credit (LOC) of USD 168 million (USD one hundred sixty eight million) for financing eligible goods, services, machinery and equipment including consultancy services to be exported from India for the purpose of financing Ketende Hydro-electric Project in Congo. The goods, services, machinery and equipment including consultancy services from India for exports under this Agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this Agreement. Out of the total credit by Exim Bank under this Agreement, the goods and services including consultancy services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India and the remaining 25 per cent goods and services (other than consultancy services) may be procured by the seller for the purpose of Eligible Contract from outside India.
The Credit Agreement under the LOC is effective from October 25, 2011 and the date of execution of Agreement is August 12, 2011. Under the LOC, the last date for opening of Letters of Credit and Disbursement will be 48 months from the scheduled completion date(s) of contract(s) in the case of project exports and 72 months (August 11, 2017) from the execution date of the Credit Agreement in the case of supply contracts.
