Monthly Archives: November 2016

Jan Dhan Accounts – precautions

Accounts under PMJDY – Precautions

Please refer to our circular DCM (Plg) No.1424/10.27.00/2016-16 dated November 25, 2016 on “Withdrawal of cash – Weekly limit”. With a view to protect the innocent farmers and rural account holders of PMJDY from activities of money launders and legal consequences under the Benami Property Transaction & Money Laundering laws, it has been decided to place certain limits, as a matter of precaution, on the operations in the PMJDY accounts funded through deposits of Specified Bank Notes (SBNs) after November 09, 2016. As a temporary measure, the banks are advised to observe the following in respect of the PMJDY accounts:

  1. Fully KYC compliant account holders may be allowed to withdraw ₹ 10,000/- from their account, in a month. The branch managers may allow further withdrawals beyond ₹ 10,000 within the current applicable limits only after ascertaining the genuineness of such withdrawals and duly documenting the same on bank’s record.
  2. Limited or Non KYC compliant account holders may be allowed to withdraw ₹ 5,000 per month from the amount deposited through SBNs after November 09, 2016 within the overall ceiling of ₹ 10,000.

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POS machines exempt from excise duty

The Government has demonetised the currency notes of Rs 500 and Rs 1,000 with effect from mid-night of 8th-9th November, 2016. Along with this, the Government has also laid increased emphasis on promoting digital payments.

Point of Sale (POS) devices are used for cashless transactions, both for making payments or disbursing cash. POS do not attract any basic customs duty. To further reduce the cost of such devices and thereby encourage digital payments, the Government has exempted such devices from Central Excise Duty. Consequently, these devices will also be exempt from Additional Duty of Customs [commonly known as CVD] and additional duty of customs [commonly known as SAD]. Simultaneously, to encourage domestic manufacturers of such devices, all goods required for the manufacture of POS devices have also been exempted from excise duty, and consequently from CVD and SAD. These exemptions will be valid till 31st March 2017.

Notification No.35/2016-Central Excise, dated 28th November, 2016 has also been issued in this regard.


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Ease of doing business – Importers & Exporters

The “Ease of Doing Business” will be further enhanced for the Importers and Exporters by reducing/eliminating physical printouts for customs clearance. The Central Board of Excise and Customs (CBEC) issued a Circular No. 55/2016- Customs dated 23rd November, 2016, wherein Importers and Exporters will henceforth not be required to submit paper documents such as GAR 7 forms / TR 6 Challans, Trans-shipment Permit (TP), Shipping Bill (Exchange Control copy and Export Promotion copy) & Bill of Entry (Exchange Control Copy) to Banks/ DGFT / Customs Ports etc.

As 95% of the importers are now paying duty through e-payment and these documents can be viewed on the ICEGATE e-payment Gateway, the need for print-out of GAR 7 Forms /TR6 Challans is not required. Similarly, Trans-shipment Permit information is sent electronically to the carrier, the transporter undertaking the transshipment, the custodian of the gateway port and the ICES system at the destination ICD or port, the requirement for submission of manual printouts of TP copy has been done away with.

The ICES generates documents such as the Shipping Bill and the Bill of Entry electronically. The CBEC provides copies of the digitally signed Shipping Bill to DGFT and also the data of Shipping Bill is integrated with the EDPMS (Export Data Processing and Monitoring System) of RBI. Therefore, printing of the Exchange Control copy and Export Promotion copy of the Shipping Bill for manual submission by the exporter is not required. Similarly, with the operationalisation of the IDPMS (Import Data Processing and Monitoring System) banks are not required to obtain a physical copy of Bill of Entry from the importer as an evidence of import because data can be transferred in secured manner from the system of Customs department to IDPMS. It has been, therefore, decided to discontinue the printing of Exchange control copy of Bill of Entry.

The above instructions are to be made operational from 1.12.16. All Customs Houses at Ports, Air Cargo Complex, ICDs and CFCs have been asked to issue Public Notice. The above step will help the Importers and Exporters to move towards electronic messaging and paper–free environment.

PIB press release dated 28th November, 2016

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Special measures to incentivise e-payments

Gist of RBI notification dated 22nd November, 2016 follows

Special measures to incentivise Electronic Payments –
(i) Enhancement in issuance limits for Pre-Paid Payment Instruments (PPIs) in India
(ii) Special measures for merchants

Following the withdrawal of legal tender characteristics of existing ₹ 500/- and ₹ 1000/- Bank Notes (Specified Bank Notes – SBN), in order to facilitate the adoption of digital payments, it has been considered necessary to introduce the following special measures in partial modification of Master Circular DPSS.CO.PD.PPI.No.01/02.14.006/2016-17 dated July 01, 2016 on Issuance and Operation of Pre-paid Payment Instruments in India.

(i) Enhancement in PPI limits:

  1. The limit of semi-closed Prepaid Payment Instrument (PPI) that can be issued under Para 7.2 (i) of the Master Circular on issuance and operations of PPIs in India has now been enhanced from ₹ 10,000/- to ₹ 20,000/- .
  2. The total value of reloads during any given month shall also not exceed ₹ 20,000/-
  3. All other extant instructions in this regard shall remain unchanged.

(ii) Special dispensation for merchants:

As per the extant PPI guidelines, merchants are defined as establishments who accept the PPIs issued by PPI issuer against the sale of goods and services. As a special dispensation for small merchants, PPI issuers can now issue PPIs to such merchants subject to the following:

  1. Merchants shall give a self-declaration in respect of their merchant status and details of their own bank account, which shall be kept on record by the issuer.
  2. PPIs can be issued to such willing merchants only after due verification and validation of their bank account details.
  3. Inflows of funds / credit to such PPIs shall emanate only from sale transactions of the merchant.
  4. While there is no minimum balance requirement, the maximum value in these PPIs shall not exceed ₹ 20,000/- at any point of time.
  5. Funds transfer from such PPIs are permitted only to the merchant’s own linked bank account and upto an amount of ₹ 50,000/- per month, without any limit per transaction.
  6. PPI issuers shall clearly identify such PPIs in their systems for the purpose of maintenance of escrow, reporting and MIS requirements.

2. The above measures shall come into effect from the date of this circular and shall be applicable till December 30, 2016, subject to review.

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Withdrawal limits for farmers

Gist of RBI notification dated 21st November, 2016

2. On a review, certain modifications have been brought in the limits for withdrawal from bank accounts which are as under:

i. For farmers

Farmers may be allowed to draw upto ₹ 25000/- per week in cash from their loan (including Kisan Credit Card limit) or deposit accounts subject to their accounts being compliant with the extant KYC norms.

ii. For traders registered with APMC markets / mandis

At present all current account holders are allowed to withdraw, in cash, ₹ 50,000/- in a week from their current account subject to certain terms and conditions and the same is being now extended to the traders registered with APMC markets/mandis. Such traders will be permitted to draw up to ₹ 50,000/- from their current accounts provided that such accounts are compliant with the extant KYC norms and are operational for the last three months or more.

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Withdrawal limits for corporate O/D & CC

RBI has vide its notification dated 21st November, 2016 allowed corporate overdraft and cash credit account holders to withdraw upto Rs.50,000/- a week by cash, most of which will be given by Rs.2000/- notes. The O/D or C/C limits should have been operational for minimum 3 months as on the date of this notification.

This is not applicable to individual overdraft facilities.


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Withdrawal of ATM usage charges

RBI has vide its notification dated 14th November, 2016 withdrawn the levy of ATM charges for all transactions (inclusive of both financial and non-financial transactions) by savings bank customers done at their own banks’ ATMs as well as at other banks’ ATMs, irrespective of the number of transactions during the month.

This waiver is applicable on transactions done at ATMs from November 10, 2016 till December 30, 2016, subject to review.

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