NOTIFICATIONS, CIRCULARS, (May – June, 2016)
RBI
A.P. (DIR Series) Circular No. 81 dated June 30, 2016 issued by the Reserve Bank of India Foreign Exchange Department regarding Settlement System under Asian Clearing Union (ACU)
Vide this circular the RBI suspended the operations in 'ACU Euro' with effect from July 01, 2016. Accordingly, all eligible current account transactions including trade transactions in 'Euro' are permitted to be settled outside the ACU mechanism until further notice.
A.P. (DIR Series) Circular No. 80 dated June 30, 2016 issued by the Reserve Bank of India Foreign Exchange Department regarding External Commercial Borrowings (ECB) – Approval Route cases
With a view to rationalizing and expediting the process of giving approval with respect to ECB cases coming under the approval route, it has been decided that ECB proposals received by the Reserve Bank above a certain threshold limit (refixed from time to time) be placed before the Empowered Committee. The Reserve Bank will take a final decision in the cases taking into account the recommendation of the Empowered Committee. All other aspects of the ECB policy shall remain unchanged. The Master Direction No. 5 dated January 01, 2016 has being updated to reflect the changes.
A.P. (DIR Series) Circular No. 78 dated June 23, 2016 issued by the Reserve Bank of India Foreign Exchange Department regarding permitting writing of options against contracted exposures by Indian Residents
In order to encourage participation in the Over the Counter
(OTC) currency options market and improve its liquidity, it has
been decided by the Reserve Bank of India (RBI) to permit resident
exporters and importers of goods and services to write (sell)
standalone plain vanilla European call and put option contracts
against their contracted exposure, i.e. covered call and covered
put respectively, to any AD Category-I bank in India subject to
operational guidelines, terms and conditions.
A.P. (DIR Series) Circular No. 76 dated June 23, 2016 issued by the Reserve Bank of India Foreign Exchange Department regarding Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015
In line with the Government of India's startup initiative,
it has been decided by the Reserve Bank of India (RBI) that an
Indian startup, having an overseas subsidiary, may open a foreign
currency account with a bank outside India for the purpose of
crediting to the account the foreign exchange earnings out of
exports/sales made by the said startup or its overseas subsidiary.
The balances held in such accounts, to the extent they represent
exports from India, shall be repatriated to India within the period
prescribed for realization of exports, in Foreign Exchange
Management (Export of Goods and Services) Regulations, 2015 dated
January 12, 2016.
In addition, payments received in foreign exchange by an Indian startup arising out of sales/ export made by the startup or its overseas subsidiaries will be a permissible credit to the Exchange Earners Foreign Currency (EEFC) account maintained in India by the startup.
A startup herein means an entity which complies with the conditions laid down in Notification No. GSR 180(E) dated February 17, 2016 issued by Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India.
A.P. (DIR Series) Circular No. 76 dated June 16, 2016 issued by the Reserve Bank of India Foreign Exchange Department regarding Exim Bank's Government of India supported Line of Credit of USD 2 billion to the Government of the People's Republic of Bangladesh
Export-Import Bank of India (Exim Bank) has entered into an Agreement dated March 09, 2016 with the Government of the People's Republic of Bangladesh, for making available to the latter, a Government of India supported Line of Credit (LOC) of USD 2 billion (USD Two billion) for financing various social and infrastructure development projects.
A.P. (DIR Series) Circular No. 75 dated June 9, 2016 issued by the Reserve Bank of India, Foreign Exchange Department regarding Exim Bank's GoI supported Line of Credit of USD 24.00 million to the Government of the Republic of Cote d'Ivoire
Export-Import Bank of India (Exim Bank) has entered into an Agreement dated September 22, 2015 with the Government of the Republic of Cote d'Ivoire for making available to the latter, a Government of India supported Line of Credit (LOC) of USD 24.00 million (USD Twenty-Four million) for financing Electricity Interconnection Project between Cote d'Ivoire and Mali.
A.P. (DIR Series) Circular No. 69 dated May 12, 2016 issued by the Reserve Bank of India Foreign Exchange Department regarding Establishment of Branch Office (BO)/ Liaison Office (LO)/ Project Office (PO) in India by foreign entities – procedural guidelines
The circular provides procedure for a person resident outside India to open a branch office or a liaison office or a project office in India. The salient provisions are as under-
The circular provides that AD Category-I bank shall consider the application made by the person's resident outside India for establishing Branch Office (BO) / Liaison Office (LO)/ Project Office (PO) or any other place of business in India as per the guidelines issued by the Reserve Bank of India (RBI). Further, if the application to open a BO/LO/PO is received from an entity resident outside India whose principal business falls under sectors where 100 percent Foreign Direct Investment (FDI) is allowed in terms of FEMA Notification No. 20/2000-RB dated May 3, 2000, the AD Category-I bank may consider such applications under the delegated powers.
The circular provides that, an application from a person resident outside India for opening of a BO/LO/PO in India shall require prior approval of RBI in specified cases.
A.P. (DIR Series) Circular No. 64 dated May 26, 2016 issued by the Reserve Bank of India, Foreign Exchange Department regarding Foreign Exchange Management (Deposit) Regulations, 2016
In consultation with the Government of India, the Reserve Bank India (RBI) has repealed the Foreign Exchange Management (Deposit) Regulations, 2000, and notified Foreign Exchange Management (Deposit) Regulations, 2016 (Notification No. FEMA 5(R)/2016-RB dated April 1, 2016). The regulations seek to regulate deposits between a person resident in India and a person resident outside India. In terms of Regulation 4 of the Deposit Regulations, no restriction under these regulations shall be applicable for opening of rupee/ foreign currency deposit accounts by certain persons, viz.
- Rupee/ foreign currency accounts by foreign diplomatic missions and diplomatic personnel or their family members in India with an Authorised Dealer in India subject to conditions mentioned therein.
- Deposits in rupees maintained by persons resident in Nepal and Bhutan with Authorised Dealer in India.
- Deposits with Authorised Dealer in India maintained by any multilateral organization, of which India is a member nation, and the subsidiary/ affiliate bodies and officials of such organizations in India.
In terms of Regulations 5 and 6 of the Deposit Regulations, a person resident outside India may open deposit accounts with Authorized Dealer/ authorized bank/Indian company under various schemes.
MCA
Notification dated June 1, 2016 bearing S.O. 1932(E) issued by the Ministry of Corporate Affairs, Government of India
The Central Government has pursuant to Section 408 of the Companies Act, 2013 notified constitution of the National Company Law Tribunal to exercise and discharge the powers and functions as are, or may be, conferred on it by or under the said Act with effect from the 1st day of June, 2016.
Notification dated May 18, 2016 bearing S.O. 1795 (E) issued by the Ministry of Corporate Affairs, Government of India
Pursuant to sub-section (3) of section 1 of the Companies Act, 2013, the Central Government has appointed 18th day of May, 2016 as the date on which the provisions of clause (iv) of sub-section (29) of section 2, sections 435 to 438 (both sections inclusive) and section 440 (provisions relating to establishment of Special Court) of the said Act shall come into force.
Notification dated June 1, 2016 bearing S.O. 1934(E) issued by the Ministry of Corporate Affairs, Government of India
Pursuant to sub-section (3) of section (1) of the Companies Act 2013, the Central Government appointed the 01st day of June, 2016 as the date on which the several provisions of the said Act shall come into force, including:
- Sub-section (7) of section 7, except clause (c) and (d) [provisions relating to incorporation of companies].
- Second proviso to sub-section (1) of section 14 and [approval of Tribunal with respect to alteration of Articles of Association having effect of conversion of public company into private company].
- Sub- section (2) of section 14 [provision with respect to order of Tribunal approving alteration].
- Sub-section (3) of section 55 [provision with respect to approval of tribunal relating to issue and redemption of preference shares].
- Proviso to clause (b) of sub-section (1) of section 61 [Approval of Tribunal with respect to change in voting percentage of shareholders on consolidation and division of share capital].
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