Rupee Export Credit Interest Rates

Date: Jun 19, 2012

Rupee Export Credit Interest Rates

RBI/2011-12/608 DBOD.Dir.(Exp).BC.No.112/04.02.001/2011-12  June 19, 2012 All Scheduled Commercial Banks (excluding RRBs) Dear Sir / Madam, Rupee Export Credit Interest Rates Please refer to our circular DBOD.Dir.(Exp).BC.No.38/04.02.001/2011-12 dated October 11, 2011 extending the scheme of interest subvention of 2% from April 1, 2011 to March 31, 2012 on pre and post shipment rupee export credit for certain employment oriented export sectors. 2. In this connection, the Government of India has decided to extend interest subvention of 2% on rupee export credit with effect from April 1, 2012 to March 31, 2013 on the same terms and conditions to the following sectors : i. Handicrafts ii. Carpet iii. Handlooms iv. Small and Medium Enterprises (SMEs) (as defined in Annex) v. Readymade Garments vi. Processed Agriculture Products vii. Sport Goods viii. Toys 3. Accordingly, banks may reduce the interest rate chargeable to the exporters as per Base Rate system in the above mentioned sectors eligible for export credit subvention by the amount of subvention available subject to a floor rate of 7%. Banks may ensure to pass on the benefit of 2% interest subvention completely to the eligible exporters. 4. A directive No. DBOD.Dir.(Exp).BC.No.111 /04.02.001/2011-12 dated June 19, 2012 issued in this regard is enclosed. 5. The procedure for claiming subvention is as follows : i) The amount of subvention would be reimbursed on the basis of claim submitted as at the end of respective quarters in theformat enclosed. ii) The amount of subvention will be calculated on the amount of export credit from the date of disbursement a.    up to the date of repayment; or b.    up to the date beyond which the outstanding export credit becomes overdue. iii) The claims should be accompanied by an External Auditor's Certificate certifying that the claims for subvention of Rs…………….for the respective quarter is true and correct. Settlement of the claim will be done only on receipt of this certificate. iv) Claims may be submitted in the enclosed format to the Chief General Manager-in-Charge, Department of Banking Operations and Development, Reserve Bank of India, Central Office, 13th floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001, within one month from the end of the respective quarters. v) In case no interest subvention is paid for any quarter/s, a NIL statement may be submitted. Yours faithfully, (Deepak Singhal) Chief General Manager-in-Charge Format Rupee Export Credit for the period from April 1, 2012 to March 31, 2013 Claim for the quarter ended............... Category of Exporters Total Rupee export credit granted at or above Base Rate Amount of subvention claimed (rounded off to the nearest rupee) (1) (2) (3) (i) Handicrafts (ii) Carpets (iii) Handlooms (iv) Readymade Garments (v) Processed Agriculture Products (vi) Sport Goods (vii) Toys (viii) Small & Medium Enterprises (SME)* Total * As defined in the Annex. We certify having charged interest rates on the above loans at or above Base Rate by way of Rupee export credit to the eligible exporters as stated in the RBI circular No. DBOD.Dir.(Exp).BC.No.115/04.02.001/2009-10 dated June 29, 2010 and DBOD.Dir.(Exp).BC.No.112 /04.02.001/2011-12 dated June 19, 2012 during the period ............ to ............... (Name and stamp of Authorised Signatory) Dated : Annex Definition of SME Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below : i) A micro enterprise is an enterprise where investment in plant and machinery (original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No.S.O.1722(E) dated October 5, 2006 does not exceed Rs.25 lakh; ii)    A small enterprise is an enterprise where the investment in plant and machinery (original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No. S.O.1722(E) dated October 5, 2006) is more than Rs.25 lakh but does not exceed Rs.5 crore; and iii)    A medium enterprise is an enterprise where the investment in plant and machinery (original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No. S.O.1722(E) dated October 5, 2006) is more than Rs.5 crore but does not exceed Rs.10 crore. DBOD.Dir.(Exp).BC.No.111/04.02.001/2011-12 June 19, 2012 Interest Rates on Rupee Export Credit In exercise of the powers conferred by Sections 21 and 35 A of the Banking Regulation Act, 1949, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, in partial modification of directive DBOD. Dir.(Exp).BC.No .37/04.02.001/2011-12 dated October 11, 2011, hereby notifies as under : It has been decided to extend the coverage of the interest subvention scheme for the period April 1, 2012 to March 31, 2013 to the following sectors on the same terms and conditions. i. Handicrafts ii. Carpet iii. Handlooms iv. Small and Medium Enterprises (SMEs) (as defined in Annex) v. Readymade Garments vi. Processed Agriculture Products vii. Sport Goods viii. Toys (B. Mahapatra) Executive Director Annex Definition of SME Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below : i)  A micro enterprise is an enterprise where investment in plant and machinery (original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No.S.O.1722(E) dated October 5, 2006 does not exceed Rs.25 lakh; ii) A small enterprise is an enterprise where the investment in plant and machinery (original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No. S.O.1722(E) dated October 5, 2006) is more than Rs.25 lakh but does not exceed Rs.5 crore; and iii) A medium enterprise is an enterprise where the investment in plant and machinery (original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No. S.O.1722(E) dated October 5, 2006) is more than Rs.5 crore but does not exceed Rs.10 crore.

inancial Inclusion-Opening of Aadhaar Enabled Bank Accounts (AEBA)

Date: Jun 20, 2012

Financial Inclusion-Opening of Aadhaar Enabled Bank Accounts (AEBA)

RBI/2011-12/610 RPCD.CO.RRB.BC.No. 88/03.05.33/2011-12 June 19, 2012 The Chairmen All Regional Rural Banks(RRBs) Madam / Dear Sir, Financial Inclusion-Opening of Aadhaar Enabled Bank Accounts (AEBA). Please refer to our Circular RPCD.CO.BC.FID No.16/12.01.019/2011-12 dated August 12, 2011 forwarding the Operational Guidelines on implementation of Electronic Benefit transfer (EBT) and its convergence with Financial Inclusion Plan (FIP). 2. In view of the timelines attached to the implementation of EBT for routing MGNREGA wages and social security benefits including proposed cash transfers in respect of subsidies on Kerosene, LPG and Fertilisers, you are requested to ensure opening of Aadhaar Enabled Bank Accounts (AEBA) of all the beneficiaries including those residing in villages with less than 2000 population. 3. Please acknowledge receipt. Yours faithfully (C. D. Srinivasan) Chief General Manager

RBI releases guidelines on White Label Automated Teller Machines (WLAs)

Date : 20 Jun 2012

RBI releases guidelines on White Label Automated Teller Machines (WLAs)

The Reserve Bank of India, today released on its website, the final guidelines on "White Label Automated Teller Machines(WLAs) in India". White Label ATMs are ATMs set up, owned and operated by non-bank entities incorporated in India under the Companies Act, 1956. Till now, only banks were permitted to set up Automated Teller Machines (ATMs) as extended delivery channels. Under the guidelines, non-bank entities incorporated in India under the Companies Act, 1956 will be permitted to set up, own and operate ATMs in India. Prospective operators/applicants would need to seek authorisation from the Reserve Bank under the Payment and Settlement Systems (PSS) Act, 2007. For setting up WLAs, entities should have a minimum net worth of Rs. 100 crore as per the latest financial year’s audited balance sheet. The authorisation can be sought under three schemes: Scheme A A minimum of 9,000 WLAs in a period of three years in a ratio of 3:1 – that is, minimum of 1000 WLAs to be installed in Year 1, minimum of twice the number of WLAs installed in Year 1 to be installed in year 2, and minimum of three times the number of WLAs installed in Year 2 to be installed in year 3; For every three WLAs installed in Tier III to VI centres, one WLA can be installed in Tier I to II centres. Out of the 3 WLAs installed in Tier III to VI centres, a minimum of 10 per cent should be installed in Tier V & VI centres. Scheme B A minimum of 5000 WLAs to be installed every year for three years in the ratio of 2:1, that is, for every two WLAs installed in Tier III to VI centres, one WLA can be installed in Tier I to II centres. Out of the WLAs installed in Tier III to VI centres, a minimum of 10 per cent should be installed in Tier V & VI centres. Scheme C A minimum of 25,000 WLAs in the first year and at least another 25,000 in the next two years in the ratio of 1:1. Out of WLAs installed in Tier III to VI centres, a minimum of 10 per cent should be installed in Tier V & VI centres The Reserve Bank had earlier sought comments from the public on the draft guidelines for deployment of WLAs. The final guidelines have been framed after taking into consideration the views received from banks, authorised ATM network operators, non-bank entities and members of public on the draft guidelines and the deliberations with the stakeholders. Alpana Killawala Chief General Manager Press Release : 2011-2012/2036

White Label ATMs (WLAs) in India - Guidelines

Source: www.rbi.org.in

Date: Jun 20, 2012

White Label ATMs (WLAs) in India - Guidelines

RBI/2011-12/612 DPSS.CO.PD. No. 2298/02.10.002/2011-2012 June 20, 2012 The Chairman and Managing Director / Chief Executive Officers All Scheduled Commercial Banks including RRBs / Urban Co-operative Banks / State Co-operative Banks / District Central Co-operative Banks Authorised ATM Network Operators / Card Payment Network Operators  Prospective White Label ATM Operators. Dear Sir, White Label ATMs (WLAs) in India - Guidelines In terms of existing rules/regulations, only banks are permitted by Reserve Bank of India (RBI) to set up Automated Teller Machines (ATMs) as extended delivery channels. Banks have played a major role in encouraging ATM adoption by customers and modifying behavioral strategies in the domain of personal banking. The investments in ATMs have been leveraged for delivery of a wide variety of banking services to customers across the banking industry and expanded the scope of banking to anytime, anywhere banking through interoperable platforms provided by the authorised shared ATM Network Operators / Card Payment Network Operators. 2. Although there has been nearly 23-25 % year-on-year growth in the number of ATMs (90,000+ presently), their deployment has been predominantly in Tier I & II centres. There is a need to expand the reach of ATMs in Tier III to VI centres (classification of centres as prescribed under the Census of India 2011). In spite of the banks' pioneering efforts in this direction, much needs to be done. 3. Keeping this in view, RBI has reviewed the extant policy on ATMs. While reviewing the policy, the Reserve Bank has taken into account the feedback received from banks, authorised ATM network operators, non-bank entities and members of public on the draft guidelines issued and placed on the Banks website, on February 14, 2012. 4. Accordingly, it has been decided to permit non-bank entities incorporated in India under the Companies Act 1956, to set up, own and operate ATMs in India. Non-bank entities that intend setting up, owning and operating ATMs, would be christened "White Label ATM Operators" (WLAO) and such ATMs would be called "White Label ATMs" (WLAs). They will provide the banking services to the customers of banks in India, based on the cards (debit/credit/prepaid) issued by banks. The WLAO's role would be confined to acquisition of transactions of all banks' customers and hence they would need to establish technical connectivity with the existing authorised shared ATM Network Operators / Card Payment Network Operators. 5. Non-bank entities would be permitted to set up WLAs in India, after obtaining authorisation from RBI under the Payment and Settlement Systems (PSS) Act 2007. The general guidelines for any non-bank entity to seek authorisation under the PSS Act for operating a payment system are available at http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/86707.pdf. Non-bank entities intending to set up WLAs under these guidelines may approach RBI for seeking specific authorisation, within four months from the date of issuance of these guidelines, beyond which the authorisation seeking window will be closed. Such non-bank entities should have a minimum net worth of Rs 100 crore as per the latest financial year’s audited balance sheet, which is to be maintained at all times. 6. The specific criteria and guidelines subject to which prospective WLA operators will be authorised to operate WLAs are listed in Annex - A. The roles and responsibilities of the stakeholders (WLAO, sponsor banks, network operators) and general conditions are indicated at Annex - B. The additional information to be sought from the WLAO while submitting the application for authorisation is given at Annex -C. Yours faithfully, (Vijay Chugh) Chief General Manager Annex A Specific Criteria and guidelines for a non-bank entity seeking authorization under the PSS Act 2007, to set up, own and operate White Label ATMs (WLAs) (Ref DPSS.CO.PD. No. 2298 / 02.10.002 / 2011-2012 June 20, 2012) 1. The eligibility criteria for WLA Operators (WLAO) would be as under: The Memorandum of Association (MOA) of the applicant entity must cover the proposed activity of operating WLAs. In case of any Foreign Direct Investment (FDI) in the applicant entity, necessary approval from the competent authority as required under the policy notified by Department of Industrial Policy and Promotion (DIPP) under the consolidated policy on FDI and regulations framed under the Foreign Exchange Management Act (FEMA) must be submitted while seeking authorization. Non-bank entities must have net worth of at least Rs 100 crore as per the last audited balance sheet. The net worth of at least Rs 100 crore has to be maintained at all times. 2. The authorised non-bank entity (henceforth referred to as WLA Operator or WLAO) would have the freedom to choose the location of the WLA. 3. The authorisation for setting up a WLA operation under the proposed guidelines would be initially valid for a period of one year. The scheme and number of WLAs sought to be installed would need to be indicated at the time of application. The details of the schemes are as under: a. Scheme A Year -1 minimum of 1000 WLAs Year -2 minimum of twice the number of WLAs installed in Year 1 and Year -3 minimum of three times the number of WLAs installed in Year 2 The ratio of 3:1 would be applicable, i.e. for every 3 WLAs installed in Tier III to VI centres, 1 WLA can be installed in Tier I to II centres. Out of the 3 WLAs installed in Tier III to VI centres, a minimum of 10 % should be installed in Tier V & VI centres. b. Scheme B A minimum of 5000 WLAs every year for three years. The ratio of 2:1 would be applicable, i.e. for every 2 WLAs installed in Tier III to VI centres, 1 WLA can be installed in Tier I to II centres. Out of the WLAs installed in Tier III to VI centres, a minimum of 10 % should be installed in Tier V & VI centres. c. Scheme C A minimum of 25,000 WLAs in the first year and at least another 25,000 in the next two years. The ratio of 1:1 would be applied under this scheme. Out of the WLAs installed in Tier III to VI centres, a minimum of 10 % should be installed in Tier V & VI centres 3.1 The authorisation issued to a WLAO cannot be assigned/transferred without prior approval of the Reserve Bank of India. 3.2 No switchover of schemes is permissible. The date for determining the time line for implementation would commence 30 days after issuance of the authorisation. 3.3 WLAOs would need to seek extension of their authorisation, if required, three months prior to the completion of one year for continued operation of the system. 4. The above targets will form part of the terms and conditions of the authorisation given under Section 7 of The Payment and Settlement Systems Act, 2007 and are expected to be complied with. Necessary certificates indicating adherence to annual targets and ratios would be submitted by WLAO to the RBI within a month of completion of one year. 5. Only cards issued by banks in India (domestic cards) would be permitted to be used at the WLAs in the initial stage. 6. Acceptance of deposits at the WLAs, by the WLAO would not be permitted. 7. The WLAO would be permitted to display advertisements and offer value added services as per the regulations in force from time to time. The advertisements placed on such ATMs would be subject to the Advertising Standards Council of India (ASCI) codes and other regulations. WLAOs would be permitted to display advertisement of financial products confirming to the regulatory framework as laid down by RBI, SEBI, IRDA and PFRDA. While running advertisements on the WLA screen would be permitted, such advertisements should disappear once the customer commences a transaction in order to ensure that the customer is not distracted in any way during the process. 8. The extant guidelines on five free transactions in a month as applicable to bank customers for using other bank ATMs would be inclusive of the transactions effected at the WLAs. 9. The WLA Operator would not be entitled to any fee from the card issuer-bank other than the "Interchange" fee payable to "acquirer" bank under the bank owned ATM scenario. 10. While the WLA operator is entitled to receive a fee from the banks for the use of ATM resources by the banks customers, WLAs are not permitted to charge bank customer directly for the use of WLAs. 11. Regulatory guidelines relating to compensation for failed transactions at bank ATMs would, mutatis mutandis, apply to the transactions effected at such WLAs. General guidelines governing the operations of the bank operated ATMs would also apply, mutatis mutandis, to WLAs. Annex B Roles and Responsibilities of various stakeholders in the WLA model (Ref DPSS.CO.PD. No. 2298 / 02.10.002 / 2011-2012 June 20, 2012) A. WLA Operator (WLAO) Non-bank entities shall commence setting up and operating WLAs only after it has been authorised to do so by the RBI under the Payment and Settlement Systems Act, 2007. Taking over of ATMs operated by banks would not be permitted. Entities may ensure to draw a strategic plan for installation of such WLAs based on the criteria set during authorization. WLAO may also indicate the value added services it proposes to offer at the WLA while seeking authorisation. WLAO is permitted to have more than one Sponsor Bank. All the transactions of WLAs serviced by this Sponsor Bank would be settled through it. The Sponsor Bank should be a member of the ATM Network Operators/ Card Payment Network Operators authorised by the RBI and also be a member of the RTGS. WLAO may ensure that there are no operational constraints particularly with reference to security and customer service while considering multiple sponsor bank relationship. Cash Management at the WLAs will be the responsibility of the Sponsor Bank, who may if required, make necessary arrangements with other banks for servicing cash requirements at various places. While the cash would be owned by the WLAO, the responsibility of ensuring the quality and genuineness of cash loaded at such WLAs would be that of the Sponsor bank. At no point of time, the WLAO or his agents shall have access to the cash at the WLAs. WLAO may establish connectivity with any of the authorised ATM Network Operators/ Card Payment Network Operatorsand ensure that the settlement of all the transactions at the WLAs shall be done only in the books of the Sponsor Bank through the ATM Network Operators/ Card Payment Network Operators with whom the WLAO has established connectivity. Maintenance and servicing of the WLAs shall be the sole responsibility of the WLAO. B. Sponsor Bank I. Cash Management A suitable Service Level Agreements (SLA) may be drawn up between the WLAO and the Sponsor Bank for adequate supply of genuine and good quality notes. The Sponsor Banks may also enter into tie-ups with other banks for providing adequate cash at various WLAs at locations where it has no presence. II. Funds Settlement Inter-bank funds settlement in respect of WLA transactions involving the Issuing and Sponsor Banks will, mutatis mutandis, follow the settlement procedures put in place by the authorised ATM Network Operators/ Card Payment Network Operators. III. Customer Grievance Redressal While the primary responsibility to redress grievances of customers relating to failed transactions at such WLAs will vest with the Issuing Bank, the Sponsor Bank will provide necessary support in this regard, ensuring that the WLAO makes available relevant records and information to the Issuing Bank. For this purpose, the Sponsor Bank should have necessary arrangement with the WLAO. The extant directives of the RBI on the time-lines for resolution of complaints of failed ATM transactions at bank operated ATMs would also apply to transactions at the WLAs. For delay in resolution of such complaints attributable to the Sponsor Bank or the WLAO resulting in payment of penalty to the customer by the Issuing Bank in terms of the directives of RBI, the Issuing Bank shall be compensated by the Sponsor Bank. The Sponsor Bank may have appropriate agreements with the WLA Operator for recovery of such amounts. C. Authorised ATM Network Operators/Card Payment Network Operators ATM Network Operators/ Card Payment Network Operators may offer direct connectivity to any authorised WLA Operator, if necessary, to facilitate transactions at the WLA and the settlement thereof through the Sponsor Bank. ATM Network Operators/ Card Payment Network Operators should bring the WLAO under the ambit of the Network’s Procedural Guidelines as though they are members and the Dispute Resolution Mechanism put in place in accordance with the extant directives of the Reserve Bank of India. D. General The ATM Network Operators/ Card Payment Network Operators, the WLAO and the Sponsor Bank shall enter into a Tri-partite Service Level Agreements (SLAs) to address issues relating to inter-bank settlement of the transactions at the WLAs, and settlement of customer complaints relating to failed ATM transactions. The SLAs should clearly spell out the role of each party. The relevant provisions of all guidelines/directives/instructions issued by various departments of the Reserve Bank of India viz. Department of Payment & Settlement Systems (DPSS), Department of Banking Operations and Development (DBOD), Customer Services Department (CSD), Department of Currency Management (DCM) and Department of Banking Supervision (DBS) with reference to the services, operations, cash handling, security, etc. at the bank ATMs would also apply to the WLAs. ANNEX-C Additional Information to be declared by the WLAO (Ref DPSS.CO.PD. No. 2298 / 02.10.002 / 2011-2012 June 20, 2012) Sl No. Information Required Yes / No 1. Does the Memorandum of Association (MOA) of the applicant entity cover the proposed activity of operating WLAs? 2. Has the entity taken necessary approval in the case of any Foreign Direct Investment (FDI) in the company, as required under the policy notified by Department of Industrial Policy and Promotion (DIPP) under the consolidated policy on FDI and regulations framed under the Foreign Exchange Management Act (FEMA) 3. Does the entity have a net worth of at least Rs 100 crore as per the latest financial year’s audited balance sheet. 4. Indicate one of the schemes to be operated (A/B/C) and the number of WLAs to be installed in the first, second and third year. 5. Does the entity have past experience in the field internationally? If yes details thereof. 6. Has the entity been involved in any activity directly or indirectly with banks with respect to bank owned ATMs. If yes details thereof. 7. Details of Value Added Services, if any, proposed to be offered. Related Press Release Jun 20, 2012 RBI releases guidelines on White Label Automated Teller Machines (WLAs)

Annual return on Foreign Liabilities and Assets Reporting by Indian Companies – Revised format

Date: Jun 20, 2012

Annual return on Foreign Liabilities and Assets Reporting by Indian Companies – Revised format

RBI/2011-12/613 A.P. (DIR Series) Circular No.133 June 20, 2012 To All Category - I Authorised Dealer Banks Madam / Sir, Annual return on Foreign Liabilities and Assets Reporting by Indian Companies – Revised format Attention of the Authorised Dealer (AD) Category – I banks is invited to A. P. (DIR Series) Circular No.45 dated March 15, 2011wherein, it was, inter-alia, stipulated that the annual return on Foreign Liabilities and Assets (FLA) is required to be submitted directly by all the Indian companies which have received FDI and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year, to the Director, External Liabilities and Assets Statistics Division, Department of Statistics and Information Management (DSIM), Reserve Bank of India, C-8, 3rd floor, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051, by July 15 of every year. 2. The Annual Return on FLA is now modified as attached. An easy-to-fill soft form of the return with guidance to users and in-built validations is now being made available on the RBI website (www.rbi.org.in → Forms category → FEMA Forms) which can be duly filled-in, validated and sent by e-mail, by July 15 every year. Any queries related to filling of annual return should be e-mailed. These directions will come into force with immediate effect. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned. 3. Necessary amendments to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 and the Foreign Exchange Management (Transfer or Issue of any Foreign Security) (Amendment) Regulations, 2004 notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000 and Notification No. FEMA 120 dated July 07, 2004, respectively will be issued separately. 4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. (Rudra Narayan Kar) Chief General Manager SOURCES:  www.rbi.org.in

Home Loans-Levy of fore-closure charges/ pre-payment penalty

Date: Jun 15, 2012

StCBs/DCCBs - Home Loans-Levy of fore-closure charges/ pre-payment penalty

RBI/2011-12/602 RPCD CO. RCBD. BC. No. 84 /03.03.01/2011-12 June 15, 2012 The Chairmen/Chief Executives of All State and Central Co-operative Banks Dear Sir Home Loans-Levy of fore-closure charges/ pre-payment penalty Please refer to our circular RPCD.CO.RCBD.BC.No. 48 /03.03.01/2010-11 dated January 20, 2011 on housing finance. 2. In this context, attention is invited to paragraphs 81 to 83 of the Monetary Policy Statement 2012-13 announced on April 17, 2012 with regard to home loans on floating interest rates. The Committee on Customer Service in Banks (Chairman: M. Damodaran)  had observed that foreclosure charges levied by banks on prepayment of home loans are resented upon by home loan borrowers across the board especially since banks were found to be hesitant in passing on the benefits of lower interest rates to the existing borrowers in a falling interest rate scenario. As such, foreclosure charges are seen as a restrictive practice deterring the borrowers from switching over to cheaper available source. 3. The removal of foreclosure charges/prepayment penalty on home loans will lead to reduction in the discrimination between existing and new borrowers and competition among banks will result in finer pricing of the floating rate home loans. Though many banks have in the recent past voluntarily abolished pre-payment penalties on floating rate home loans, there is a need to ensure uniformity across the banking system. It has, therefore, been decided that banks will not be permitted to charge foreclosure charges/pre-payment penalties on home loans on floating interest rate basis, with immediate effect. Yours faithfully (C. D. Srinivasan) Chief General Manager

Guidelines for Chit Fund Companies

Guidelines for Chit Fund Companies

How To Get a Registration Certificate

Chit fund Companies operating in Delhi as a practice, first obtain a certificate of incorporation from the Ministry of Corporate Affairs (A) Requirements for registration of New Co. with Registrar of Chit Fund, New Delhi. After getting this certificate, you can apply for registration of first Bye-laws of the company with Chit Fund Department., Govt. of N.C.T. of Delhi, 13th floor, Bikri Kar Bhawan, I.P. Estate, New Delhi 110 002 (Tel. No. 331 8992) a) Memorandum and Articles of Association. b) Incorporation Certificate. c) Form No. 2 regarding shares allotment. d) Form No. 18 regarding registered office.  e) Form No. 32 regarding appointment of Directors. f) R.O.C. Receipt for filing of form No. 2, 18, 32. g) Bank certificate for deposit of Rs. 1,00,000/- as paid-up capital. h) Resolution for appointment of foreman of the company. I) Affidavits of the Directors regarding:- 1. Age, good health and sound mind. 2. Insolvency., 3. Non-conviction. 4. Membership/Directorship in other chit fund company. j) Proof of ownership of the office premises. k) No objection certificate from the landlord. l) Rent Receipt of premises. m) Lay out plan of premises. n) Photo-copies of Ration Cards of the Directors. o) Photographs of all the Directors duly attested. p) Papers regarding financial soundness of the Directors. 1. Proof of property, if any. 2. Assessment order, if any. 3. Balance sheet(s) of the company whether partnership or proprietorship. 4. Other financial documents. q) Form CF-1 in duplicate (application for registration). r) Bye-laws in duplicate. s) Cash Voucher for Rs.50/- (Bye-laws fee). (B) Basic requirements for approval of First Bye-laws i) All Directors/Partners should be adults, possess good health and sound mind, should not have been convicted in any case and should be financially sound. Preferably, the Directors should not be related to each other. ii) The Company should have at least an amount of Rs.1,00,000/- in the bank as paid-up capital. Documents to be submitted at the time of approval of Bye-laws a. Form CF-1. b. Bye-laws (in duplicate). c. Form regarding details of company’s business and deposit of fee. d. Certificate of Registration in Form CF-II (in duplicate). e. Bye-laws fee amounting to Rs. 50/- for each Bye-law to be deposited in cash with the Cashier. f. Residential proof of Directors/Foreman in the shape of ration card, election I-Card, or passport. (C) Inspection of the Registered Office After all the prescribed requirements are fulfilled, spot inspection of the proposed registered office of the company will be made by the Chit Fund Department through an Inspecting Officer. For this purpose, the registered office should be:- i) having atleast 150 square feet of office area. ii) well furnished to conduct chit fund business. iii) having an Auction Hall. iv) a sign board displayed on the front side of the premises. Preferably, the company should also display the registered groups with it showing tickets and monthly subscription and the chit value. In case any vacancy is likely to come up in a group, this may also be displayed. (D) Framing of Bye-Laws The Bye-Laws submitted for registration shall contain the following particulars: i) The full name of foreman conducting chit business. ii) The complete address of the foreman, registered address, in the case of a company being a foreman. iii) The name under which chit business is done or is proposed to be done. iv) The full details of the working of the chit. v) The area of operation of the chit. vi) The circumstances under which withdrawals of subscriber shall be permitted. vii) The procedure to be followed for returning the money of the subscribers in case withdrawal, ineligibility or death of the subscriber. viii) The condition under which the transfer of a chit or the interest of a subscriber shall be permitted. ix) The full name and designation of the officer entitled to sign documents on behalf of the foreman. x) The rate of commission to which the foreman is entitled. xi) The language in which the accounts shall be kept. xii) The mode of custody and investment of money. xiii) The settlement of disputes touching or concerning the chit. On receipt of application, the Registrar shall examine the application and Bye-laws in order to satisfy himself that the bye-laws are: a) in conformity with the Act and Rules. b) suitable for carrying out the object of the chit. c) suitable for carrying safe and fair conduct of the business. and shall grant a certificate of registration in Form CF-II. (E) Amendment of Bye-laws: After the Bye-laws have been registered, the chit fund company can apply for the amendment of these bye-laws, if necessary. Documents required for amendment of Bye-laws: i) Application alongwith a Court fee stamp of Rs.5/-. ii) Approved Bye-laws (in original). iii) Proposed Bye-laws (in duplicate). When the proposed amendments in Bye-laws are approved, one copy of Bye-Laws duly endorsed for registration of amendment will be issued to the company. No application for amendment of Bye-laws will be entertained, if the chit group of such Bye-laws has commenced. Under prevailing practice of the department amendment of bye-laws is allowed only once. (F) After the Registrar, Chit Funds Delhi is satisfied that all the requirements are fulfilled, a certificate for registration of first Bye-laws will be issued to the company. The Certificate of registration or the attested copy thereof shall be displayed prominently at every place of chit business.

Strengthening the Regulatory Framework for Unclaimed Deposits

Date: Jun 13, 2012

RRBs/StCBs/DCCBs - Strengthening the Regulatory Framework for Unclaimed Deposits

RBI/2011-12/599 RPCD.No. RRB.RCB.BC. 83/03.07.033/2011-12 June 12, 2012 All State and Central Co-operative Banks / Regional Rural Banks Dear Sir Strengthening the Regulatory Framework for Unclaimed Deposits Please refer to paragraphs 102 and 103 of the Monetary Policy Statement for the year 2012-13, announced on April 17, 2012 proposing certain measures for strengthening the Regulatory Framework for Unclaimed Deposits. 2. In terms of our circulars RPCD. CO. RF. BC. No. 89/07.38.01/2008-09 dated February 18, 2009 and RPCD.CO.RRB.BC. No.108/03.05.33/2008-09 dated May 22, 2009  detailed instructions have been given to State and Central Co-operative Banks / Regional Rural Banks  on dealing with unclaimed deposits/inoperative accounts. They have been advised to find the whereabouts of the customers and their legal heirs. These instructions, inter alia, include i) annual review of accounts in which there are no operations, ii) operations in such accounts to be allowed after due diligence, and iii) no charge to be levied for activation of inoperative accounts, etc. 3. Despite the above instructions, State and Central Co-operative Banks / Regional Rural Banks have not been pro-active in tracing customers linked with unclaimed deposits/inoperative accounts. Also, the need to identify the owners of these unclaimed deposits/inoperative accounts is closely linked to KYC due diligence. Therefore, in terms of our circular RPCD.No.RRB. RCB.BC.58/03.05.033/2011-12 dated February 8, 2012 State and Central Co-operative Banks / Regional Rural Banks were advised that they should display the list of unclaimed deposits/inoperative accounts which are inactive/ inoperative for ten years or more on their respective websites by June 30, 2012. The list so displayed on the websites must contain only the names of the account holder(s) and his/her address in respect of unclaimed deposits/inoperative accounts, etc. 4. On a review, with a view to further strengthen the regulatory framework for inoperative accounts and unclaimed deposits, State and Central Co-operative Banks / Regional Rural Banks are advised to put in place a Board approved policy on classification of unclaimed deposits; grievance redressal mechanism for quick resolution of complaints; record keeping; and periodic review of such accounts. 5. The first periodic review of unclaimed deposits/inoperative accounts should be put up to their respective bank Boards by September 30, 2012. Yours faithfully, (C.D. Srinivasan) Chief General Manager Source:  www.rbi.org.in

Revision in framework for Qualified Foreign Investor (QFI) investment in Equity Shares and Mutual Fund schemes

CIRCULAR

CIR/ IMD/ FII&C/ 13/ 2012

June 07, 2012

All SEBI registered Intermediaries/ Recognized Stock Exchanges/ Depositories/ Mutual Fund/ qualified Depository Participants (DP)

Sir / Madam,

Sub: Revision in framework for Qualified Foreign Investor (QFI) investment in Equity Shares and Mutual Fund schemes

Vide SEBI circulars  Cir/IMD/DF/14/2011 and  Cir/IMD/FII&C/3/2012 dated August 09, 2011 and January 13, 2012, respectively, Qualified Foreign Investors (QFI) were allowed to invest in schemes of Indian mutual funds and Indian equity shares subject to terms and conditions mentioned therein. Subsequently, vide SEBI circular  CIR/IMD/FII&C/4/2012 dated January 25, 2012, the eligibility criteria for a qualified DP was revised.

2. On a review and in consultation with the Government of India (GoI) and RBI, it has been decided to revise the definition of QFI as under:

QFI shall mean a person who fulfils the following criteria:

(i)    Resident in a country that is a member of Financial Action Task Force (FATF) or a member of a group which is a member of FATF; and

(ii)  Resident in a country that is a signatory to IOSCO’s MMOU (Appendix A Signatories) or a signatory of a bilateral MOU with SEBI:

Provided that the person is not resident in a country listed in the public statements issued by FATF from time to time on-(i) jurisdictions having a strategic Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) deficiencies to which counter measures apply, (ii) jurisdictions that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies:

Provided further such person is not resident in India:

Provided further that such person is not registered with SEBI as Foreign Institutional Investor or Sub-account or Foreign Venture Capital Investor.

Explanation.-For the purposes of this clause:

(1)The term "Person" shall carry the same meaning under Foreign Exchange Management Act (FEMA), 1999 and section 2(31) of the Income Tax Act, 1961;

(2)  The phrase “resident in India” shall carry the same meaning as in the FEMA 1999, and Income Tax Act, 1961;

(3)  “Resident" in a country, other than India, shall mean resident as per the direct tax laws of that country.

(4)   “Bilateral MoU with SEBI” shall mean a bilateral MoU between SEBI and the overseas regulator that inter alia provides for information sharing arrangements.

(5)   Member of FATF shall not mean an Associate member of FATF.

The definition of QFI, as provided in the circulars  Cir/IMD/DF/14/2011 and  Cir/IMD/FII&C/3/2012 dated August 09, 2011 and January 13, 2012, respectively, stands amended as above.

3.         The word “Purchase” used in clause 6.1.4 of circular Cir/IMD/FII&C/3/2012 dated January 13, 2012 shall be substituted with the word “Subscription”.

4.          Between clauses 8.6 and 8.7 of Circular dated January 13, 2012, clause 8.6.1 is inserted to read as under:

“8.6.1. In case a person invests in the same company through both QFI route and FDI route, the aggregate holding of the person in such company shall not exceed five percent of paid up equity capital of the company at any point of time. This investment limit shall be applicable to each class of equity shares having separate and distinct ISIN. This shall be subject to guidelines on FDI as prescribed by GoI and RBI from time to time .”

5. It has been decided to allow QFIs to make fresh purchases of eligible securities, out of the sale/ redemption/ dividend proceeds of any of the eligible securities. Further, it is clarified that all the eligible securities shall be held in a single demat account of the QFI. Eligible securities shall mean mutual fund units (under both direct and indirect route), equity shares, corporate debt and any other security which is permitted for investment by QFI from time to time by GoI, RBI and SEBI.

Clause 4.7.7 of circular  Cir/IMD/DF/14/2011 dated of circular  Cir/IMD/FII&C/3/2012 dated January 13,

August 09, 2011 and Clause 9.2.2 2012 stand amended, accordingly.

6. It has been further decided to extend the option of appointment of custodian of securities by the QFI. The QFI, if it so desires, may appoint a custodian of securities, who would be obligated to perform clearing and settlement of securities on behalf of the QFI client. However, no person shall be appointed as custodian by the QFI unless it is itself the qualified DP of the QFI and is also registered as custodian with SEBI under SEBI (Custodian of Securities) Regulations, 1996.

7. A QFI shall open a single non-interest bearing Rupee Account with an AD Category- I bank in India, for routing the receipt and payment for transactions relating to purchase and sale of eligible securities subject to the conditions as may be prescribed by RBI from time to time. Accordingly, it is clarified that henceforth there is no more requirement for opening and maintenance of a single rupee pool bank account by the qualified DP. QFIs, shall, henceforth invest in all eligible securities through this single non- interest bearing Rupee Account.

Circulars dated August 9, 2011, January 13, 2012, and January 25, 2012 respectively, stand amended as above.

This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Yours faithfully,

S MADHUSUDHANAN

Deputy General Manager

Tel No.: 022-26449614

Email: smadhu@sebi.gov.in