India: Corporate Law Alert - January 14, 2013

Last Updated: 5 March 2013

Reserve Bank of India Amends Definition of Infrastructure Loan of NBFCs

The Reserve Bank of India ("RBI") vide Notification No. DNBS. 253/CGM (CRS)-2012 dated December 28, 2012 has amended the definition of 'infrastructure loan' as given in the Non-Banking Financial (Deposit Accepting or Holding) Companies (NBFC) Prudential Norms (Reserve Bank) Directions, 2007. RBI has also vide Notification No. DNBS. 254/CGM (CRS)-2012 dated December 28, 2012 decided to bring about harmonization by amending the definition of the term 'infrastructure loans' in the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies (NBFC) Prudential Norms (Reserve Bank) Directions, 2007. Pursuant to the amendments, "infrastructure loan" means a credit facility extended by NBFCs to a borrower for exposure in the following infrastructure subsectors:


Infrastructure sub-sectors


  1. Roads and bridges
  2. Ports
  3. Inland waterways
  4. Airports
  5. Railway track, tunnels, viaducts, bridges
  6. Urban public transport (except rolling stock in case of urban road transport)


  1. Electricity generation
  2. Electricity transmission
  3. Electricity distribution
  4. Oil pipelines
  5. Oil / gas / Liquefied Natural Gas storage Facility
  6. Gas pipelines

Water and Sanitation

  1. Solid waste management
  2. Water supply pipelines
  3. Water treatment plants
  4. Sewage collection, treatment and disposal system
  5. Irrigation (dams, channels, embankments etc.)
  6. Storm water drainage system


  1. Telecommunication (fixed network)
  2. Telecommunication towers

Social and Commercial Infrastructure

  1. Education institutions (capital stock)
  2. Hospitals (capital stock)
  3. Three-star or higher category classified hotels located outside cities with population of more than 1 million
  4. Common infrastructure for industrial parks, SEZ, tourism facilities and agriculture markets
  5. Fertilizer (Capital investment)
  6. Post harvest storage infrastructure for agriculture and horticultural produce including cold storage
  7. Terminal markets
  8. Soil-testing laboratories
  9. Cold chain

The RBI has further clarified that the exposure to projects which were previously included under the definition of infrastructure but are not included in the revised definition will continue to get the benefits under 'infrastructure lending' till the completion of such projects. However, any fresh lending to those sub-sectors from the date of this circular will not qualify as 'infrastructure lending'.

Export of Goods and Services – Simplification and Revision of Softex Procedures

The RBI vide A.P. (DIR Series) Circular No. 66 dated January 1, 2013 has decided to implement the Softex procedure introduced vide A.P. (DIR Series) Circular No. 80 dated February 15,2012 to all Special Economic Zones ("SEZs"), Export Processing Zones ("EPZs"), 100% Export Oriented Units ("EOUs") and Domestic Tariff Areas ("DTAs").

As per the revised procedure, a software exporter either under the Software Technology Parks of India ("STPI") scheme or SEZs/ EPZs/ 100% EOUs/ DTA, whose annual turnover is at least Rs. 1000 crores or who files at least 600 (Six Hundred) SOFTEX forms annually on an all India basis, will be eligible to submit statements in the revised excel format sheets. The notification clarifies that all other terms and conditions as mentioned in Circular No. 80 dated February 15, 2012 will remain unchanged.

External Commercial Borrowings for Low Cost Affordable Housing Projects

The RBI has vide A.P. (DIR Series) Circular No. 61 dated December 17, 2012 decided to allow External Commercial Borrowings ("ECB") for low cost affordable housing projects via the approval route. ECB can be availed of by developers/builders for low cost affordable housing projects. Housing Finance Companies ("HFCs") and the National Housing Bank ("NHB") can also avail of ECB for financing prospective owners of low cost affordable housing units.

For the purpose of low cost affordable housing project for the purpose of ECB would be a project in which at least 60% (Sixty per cent) of the permissible floor space index would be for units with a maximum area up to 60 (Sixty) square meters.

Slum rehabilitation projects are also eligible under the scheme, subject to the parameters set by the Central Sanctioning and Monitoring Committee of the Affordable Housing in Partnership Scheme.

The eligibility criteria laid down for builders or developers are that: (i) they must be a company incorporated under the Companies Act, 1956; (ii) they should have a minimum of five years experience in undertaking residential projects; (iii) they should not have defaulted in terms of any financial commitments to banks or financial institutions; and (iv) they must have all necessary clearances from various bodies with respect to land usages and environment clearances.

The eligibility criteria laid down for HFC is that: (i) the HFC should be registered with the NHB and operating in accordance with the regulatory directions and guidelines issued by NHB; (ii) the minimum paid up capital as per the latest audited balance sheet should be Rs. 50 crores (Rupees Fifty Crores)etc.

The RBI has further stated that the ECB proceeds shall be utilized for low cost affordable housing projects only and shall not be utilized for acquisition of land. Developers, builders, HFCs and NHB will not be permitted to raise 'Foreign Currency Convertible Bonds' under this scheme.

The RBI has also decided that NHB shall act as the nodal agency for deciding a project's eligibility as a low cost housing project. On satisfaction of the same, the NHB shall forward the application of the builder/developer to the RBI for consideration under the approval route.

For the financial year 2012-13, an aggregate limit of USD 1 (One) billion is fixed for ECB under the low cost affordable housing scheme which includes ECBs to be raised by developers/ builders and the NHB / specified HFCs. The said policy has come into force with immediate effect.

Trade Credits for Import into India

The RBI has vide A.P. (DIR Series) Circular No. 59 dated December 14, 2012 decided to relax the condition of ab initio buyers' credit from 15 (Fifteen) months to 6 (Six) months for existing trade credits for companies in the infrastructure sector. However, the condition regarding ab initio buyers' credit for 15 (fifteen) months shall continue for future trade credit for companies in the infrastructure sector.

The RBI had vide A.P. (DIR Series) Circular No. 28 dated September 11, 2012, specified that companies in the infrastructure sector, where infrastructure is as defined under the extant guidelines on ECB, were allowed to avail trade credit up to a maximum period of 5 (Five) years for import of capital goods as classified by the Directorate General of Foreign Trade, subject to the following conditions:

  1. the trade credit must be ab initio contracted for a period not less than 15 (fifteen) months and should not be in the nature of short term rollovers; and
  2. AD banks are not permitted to issue letters of credit / guarantees / letter of undertaking / letter of comfort in favour of overseas suppliers, bank and financial institution for the extended period beyond 3 (Three) years.

Review of All-In-Cost Ceiling – External Commercial Borrowing

The RBI vide A.P. (DIR Series) Circular No. 60 dated December 14, 2012 has decided to continue with the enhanced 'all-in-cost' ceiling for ECB which it had originally specified vide A.P. (DIR Series) Circular No. 51 dated November 23, 2011 and extended from time to time. The enhanced 'all-in-cost' ceiling for ECB is as follows:

Average Maturity Period

All-in-Cost over 6 month LIBOR (for the respective currency of borrowing or applicable benchmark)

3 years and upto 5 years

350 bps

More than 5 Years

500 bps

The aforementioned 'all-in-cost' ceiling is applicable upto March 31, 2013 and is subject to review thereafter. All other aspects of the ECB policy remain unchanged.

Review of All-In-Cost Ceiling – Trade Credits for Imports into India

The RBI vide A.P. (DIR Series) Circular No. 58 dated December 14, 2012 has decided to continue with the 'all-in-cost' ceiling for trade credits for imports into India which was specified vide A.P. (DIR Series) Circular No. 44 dated November 15, 2011 and extended from time to time. The enhanced 'all-in-cost' ceiling is as follows:

Maturity Period

All-in-Cost over 6 month LIBOR (for the respective currency of borrowing or applicable benchmark)

Upto 1 year

350 bps

More than 1 year and upto 3 years

350 bps

The aforementioned 'all-in-cost' ceiling is applicable upto March 31, 2013 and is subject to review thereafter. All other aspects of Trade Credit policy remain unchanged.

Delegation of Powers by the Central Government to RBI

The Ministry of Corporate Affairs ("MCA") has vide notification dated December 21, 2012 delegated to the RBI all powers in relation to banking companies falling within the purview of the Banking Regulation Act, 1949, relating to reference of cases against the managerial personnel to the Tribunal, power of application for an interim order by the Tribunal and power to remove managerial personnel on the basis of the Tribunal's decision.

The delegation has been made subject to the condition that the Central Government may at any time revoke such powers or may itself exercise such powers if, in its opinion, such an action is necessary in public interest.

Recognition of MCX Stock Exchange Limited by the Central Government

MCA has vide notification dated December 21, 2012 inserted MCX Stock Exchange Limited as a recognized stock exchange thereby bringing it within the purview of a "recognized stock exchange" under the Companies Act, 1956.

Amendment of The Companies (Central Government's) General Rules and Forms, 1956

MCA has vide Notification dated December 19, 2012 substituted Annexure A of Form 23 C (Form of application to the Central Government for appointment of cost auditor). The amendment is to be effective from December 23, 2012.

MCA has further, vide Notification dated December 24, 2012 substituted Annexure A of Form 18 (Pursuant to Section 146 of the Companies Act, 1956, for the notice of situation or Change of situation of Registered Office of the Company). The amendment became effective from December 25, 2012.

Amendment of Companies (Directors Identification Number) Rules, 2006

MCA has vide Notification dated December 24, 2012 amended Form DIN 1 (Application for allotment of Director Identification Number ("DIN")) by substituting Annexure A of the particular form.

The MCA has also amended Form DIN 4 (Form for the Intimation of change in particulars of Director to be given to the Central Government) to substitute the certification column of the form.

Filing of Form 68 for rectification of mistakes in Form 1, Form 1A and Form 44

The MCA has vide General Circular No. 42/2012 dated December 21, 2012 allowed companies that were incorporated prior to 2009 and other companies which could not avail this facility earlier to rectify the mistakes in Form 1, Form 1A and Form 44 by filing of Form 68 on payment of the stipulated fee of Rs. 1000 (Rupees One Thousand). The requisite Form 68 may be filed within a period of 180 days from the effective date. This Circular came into effect from December 23, 2012.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.