Monthly Archives: April 2020

FDI – new rule

Ministry of Commerce, Department for promotion of trade & industry has laid down a new rule, whereby FDI has been restricted to a government approval route in case the FDI is from a country which shares a land border with India or where the beneficial owner of such FDI resides in such country which shares a land border with India. The restriction also applies to transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, wherein the beneficial ownership is with a resident in a country which shares land border with India, then such transfer will also require government approval.

Presently, there are 6 countries which share land border with India – Myanmar, Bangladesh, China, Pakistan, Nepal, Bhutan.

Click to access pn3_2020.pdf

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Run for your life

Documentary on Fred Lebow and how the New York City marathon started way back in 1976. This Romanian immigrant had a kind of passionate vision about him in the sense that he nurtured the NYC marathon with all kind of crazy ideas with a competitive spirit. NYC marathon is probably one of the largest marathons in the world. New York Road Runners of which he was the founding member is now doing a lot of work with the running scene in New York organising a lot of races for the kids and mentorship programs for people who want to run a marathon.

Don’t know when the marathons will start again after this horrendous covid season is behind us, but yeah NYC marathon is one of the marathon majors in the world having big names participating in it in a tough undulating course through the five burroughs of New York. NYC marathon kicked off the culture of big city marathons the world over.

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The Ivy Tree

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Anabel Winslow was supposed to have died sometime back after she went abroad and that is after a tiff over something that is discovered later. So when a woman resembling Anabel Winslow comes back to her hometown claiming not to be Anabel but Mary Grey, the plot starts thickening. Her half cousin Connor and half sister Lisa hatch a plot to integrate Mary into the Winslow household in England assuming the nom de guerre of Anabel. Her grandfather is old and ailing and he has to bequeth his properties to his two grand daughters Anabel and Julie. This is where Connor and Lisa machinations come in. The story goes on, one thing leads to another, there is a murder attempt, some old love interest comes back. Goodreads 3/5

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Boston Strangler

Documentary on the life and times of Boston Strangler who terrorised the streets of Boston in the years 1961 to 1964. Albert de Salvo having a rough childhood developed into a sex maniac and later on killing & raping women.  He was never caught, instead he landed himself to police net. He had been arrested by police several times before but never linked to any sex crimes.

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Dawn of Humanity

Documentary on the fossil find in south africa in 2011 which led to a major discovery in the field of paleo anthropology. Whether the fossil find, which was intact to the extent of almost 60% of the skeleton belongs to the austrolopithecus family or hominids or home erectus or homo sapiens. Fascinating to watch the evolution of mankind from millions of years ago.

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NCLT – written submissions

NCLT lays down some salient procedures to be followed while submitting documents during this covid season, when NCLT is taking up matters on video conferencing basis. It says written submissions have to be made, in brief by the appellant to the respondent and reply by respondent to the appellant also in brief in 5 to 10 lines only. Thereafter both parties will submit a joint memo of submissions, both parties giving out their respective reasons in short bullet points. This will enable faster clearance of cases in the NCLT. 

Click to access Notice%20over%20written%20submissions.pdf

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The Story of San Michele

munthe

An autobiographical book, “The Story of San Michele” by Axel Munthe is as much a story about him as about a chapel called San Michele in the island of Capri off Italy as about his love of animals. Axel Munthe was Swedish, but studied medicine in France, and met several famous personalities of his time such as Louis Pasteur, Guy de Maupassant, Henry James, Jean-Martin Charcot. He was a medical doctor yet he treated animals also and got involved in the treatment of mental patients as well. He saved several lives during the times of a cholera epidemic in France, an earthquake in Italy. He bought over a chapel in San Michele and the house adjacent to it, renovated it, which took him several years, for which he went to Rome to earn money. He was a doctor for the rich and influential which is where he earned his moolah. He also purchased an entire mountain in order to save the birds there from being slaughtered. No mention anywhere in the book about his love life or his wife or children, though as per Wikipedia, he has had three marriages and three sons. Goodreads 5/5

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The Why – Running 100 miles

This is a documentary about Billy Young running a 100 mile race, the famous Leadville 100 in Leadville, Colorado. Why do people run 100 miles, i can barely run 26 miles. But i guess it is a huge leap of faith and discovery for many runners, its discovering what their bodies can achieve when their mind sets to do something impossible. Its a challenge into the unknown, pushing your limits to achieving the impossible. Its a nice docu, Billy almost gave up 45 miles, but then that’s where the second wind takes over, the mind says i can do it, the body responds. We have the famous ultra marathoner Anton Krupicka speaking a few positive things during the documentary. Worth a watch for all ultra marathoners.

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faqs on covid csr

MCA has released a FAQs on what all contributions to covid donations are covered as CSR expenditure and it has stirred a hornets nest of protest. MCA has excluded contributions to state CM Relief Fund from the ambit of csr expenditure for corporates. That means if companies have to do CSR expenditure as per the requirements of the Act and the Rules, then they cannot contribute to the state CM relief fund, because it is out of purview of what constitutes CSR expenditure. Centre is playing dirty politics at this time of the severe crisis. All they have to do is include CM Relief fund in the Schedule VII of the CSR Rules. MCA should immediately withdraw this FAQ and bring in amendment to the Schedule VII of the CSR Rules. Otherwise it will sound patently unfair. 

Click to access Notification_10042020.pdf

COVID-19 related Frequently Asked Questions (FAQs) on
Corporate Social Responsibility (CSR)
The Ministry has been receiving several references/ representations from various
stakeholders seeking clarifications on eligibility of CSR expenditure related to COVID-19
activities. In this regard, a set of FAQs along with clarifications are provided below for better
understanding of the stakeholders:
1 Whether contribution made to ‘PM CARES Fund’ shall qualify as CSR expenditure?
MCA: Contribution made to ‘PM CARES Fund’ shall qualify as CSR expenditure under item no (viii) of Schedule VII of the Companies Act, 2013 and it has been further clarified vide Office memorandum F. No. CSR-05/1/2020-CSR-MCA dated 28th March, 2020.
2. Whether contribution made to ‘Chief Minister’s Relief Funds’ or ‘State Relief Fund for COVID-19’ shall qualify as CSR expenditure?
MCA: ‘Chief Minister’s Relief Fund’ or ‘State Relief Fund for COVID-19’ is not included in Schedule VII of the Companies Act, 2013 and therefore any contribution to such funds shall not qualify as admissible CSR expenditure.
3. Whether contribution made to State Disaster Contribution made to State Disaster
Management Authority to combat COVID-19 Management Authority shall qualify as CSR
expenditure?
MCA: It shall qualify as CSR expenditure under item no (xii) of Schedule VII of the 2013 and clarified vide general circular No. 10/2020 dated 23rd March, 2020.
4. Whether spending of CSR funds for COVID-19 related activities shall qualify as
CSR expenditure?
MCA: Ministry vide general circular No. 10/2020 dated 23rd March, 2020 has clarified that spending CSR funds for COVID-19 related activities shall qualify as CSR expenditure. It is further clarified that funds may be spent for various activities related to COVID-19 under items nos. (i) and (xii) of Schedule VII relating to promotion of health care
including preventive health care and sanitation, and disaster management. Further, as per general circular No. 21/2014 dated 18.06.2014, items in Schedule VII are broad based and may be interpreted liberally for this purpose.
5. Whether payment of salary/wages to employees and workers, including contract labour, during the lockdown period can be adjusted against the CSR expenditure of the
companies?
MCA: Payment of salary/ wages in normal circumstances is a contractual and statutory
obligation of the company. Similarly, payment of salary/ wages to employees and workers even during the lockdown period is a moral obligation of the employers, as they have no alternative source of employment or livelihood during this period. Thus, payment of salary/ wages to employees and workers during the lockdown (including imposition of other social distancing requirements) shall not qualify as admissible CSR expenditure.
6. Whether payment of wages made to casual/daily wage workers during the lockdown period can be adjusted against the CSR expenditure of the companies?
MCA: Payment of wages to temporary or casual or daily wage workers during the lockdown period is part of the moral/ humanitarian/ contractual obligations of the company and is applicable to all companies irrespective of whether they have
any legal obligation for CSR contribution under section 135 of the Companies Act 2013. Hence, payment of wages to temporary or casual or daily wage workers during the lockdown period shall not count towards CSR expenditure.
7. Whether payment of exgratia to temporary /casual/daily wage workers shall
qualify as CSR expenditure?
MCA: If any ex-gratia payment is made to temporary /casual workers/ daily wage workers over and above the disbursement of wages, specifically for the purpose of fighting COVID 19, the same shall be admissible towards CSR expenditure as a onetime exception provided there is an explicit declaration to that effect by the Board of the
company, which is duly certified by the statutory auditor.

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small bank accounts

https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11566

RBI had allowed small bank accounts to be opened vide the above circular. The small accounts was to operational only for a period of 12 months followed by another 12 months upon review. This is basically to mitigate the suffering of those poor & marginal sections of the society, who might not have an officially valid document (OVD). So they were allowed to produce this OVD within this period of 24 months by the banker. Now in view of the Covid crisis, they have been allowed to remain as small bank accounts upto 30th June, 2020 without being disturbed. 

The gist of the above circular relating to small accounts and the fresh circular giving this relief is produced hereunder.

23. 25Notwithstanding anything contained in Section 16 and as an alternative thereto, in case an individual who desires to open a bank account, banks shall open a ‘Small Account’, which entails the following limitations:

  1. the aggregate of all credits in a financial year does not exceed rupees one lakh;
  2. the aggregate of all withdrawals and transfers in a month does not exceed rupees ten thousand; and
  3. the balance at any point of time does not exceed rupees fifty thousand.

26Provided, that this limit on balance shall not be considered while making deposits through Government grants, welfare benefits and payment against procurements.

Further, small accounts are subject to the following conditions:

  1. The bank shall obtain a self-attested photograph from the customer.
  2. The designated officer of the bank certifies under his signature that the person opening the account has affixed his signature or thumb impression in his presence.

    27Provided that where the individual is a prisoner in a jail, the signature or thumb print shall be affixed in presence of the officer in-charge of the jail and the said officer shall certify the same under his signature and the account shall remain operational on annual submission of certificate of proof of address issued by the officer in-charge of the jail.

  3. Such accounts are opened only at Core Banking Solution (CBS) linked branches or in a branch where it is possible to manually monitor and ensure that foreign remittances are not credited to the account.
  4. Banks shall ensure that the stipulated monthly and annual limits on aggregate of transactions and balance requirements in such accounts are not breached, before a transaction is allowed to take place.
  5. The account shall remain operational initially for a period of twelve months which can be extended for a further period of twelve months, provided the account holder applies and furnishes evidence of having applied for any of the OVDs during the first twelve months of the opening of the said account.
  6. The entire relaxation provisions shall be reviewed after twenty four months.
  7. 28Notwithstanding anything contained in clauses (e) and (f) above, the small account shall remain operational between April 1, 2020 and June 30, 2020 and such other periods as may be notified by the Central Government.
  8. The account shall be monitored and when there is suspicion of money laundering or financing of terrorism activities or other high risk scenarios, the identity of the customer shall be established as per Section 16.
  9. Foreign remittance shall not be allowed to be credited into the account unless the identity of the customer is fully established as per Section 16.

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11857&Mode=0

Government of India, vide Gazette Notification G.S.R. 228(E) dated March 31, 2020 has notified amendment to the Prevention of Money-laundering (Maintenance of Records) Rules, 2005.

2. Consequent to the aforementioned amendment to the PML Rules, Master Direction on KYC dated February 25, 2016 has been updated as under:

Clause (g) has been inserted in the conditions stipulated for Small Accounts in Section 23 of the MD. Clause (g) reads as,

“Notwithstanding anything contained in clauses (e) and (f) above, the small account shall remain operational between April 1, 2020 and June 30, 2020 and such other periods as may be notified by the Central Government.”

3. The Master Direction on KYC dated February 25, 2016, is hereby amended to reflect the above change and shall come into force with immediate effect.

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export realisation

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11855&Mode=0

RBI gives more time for realisation of export proceeds in view of the covid crisis. It has been extended from 9 months to 15 months from the date of export upto 31st July, 2020.

Export of Goods and Services-
Realisation and Repatriation of Export Proceeds-Relaxation

The Government of India as well as the Reserve Bank has been receiving representations from Exporters Trade bodies to extend the period of realisation of export proceeds in view of the outbreak of pandemic COVID- 19. It has, therefore, been decided, in consultation with Government of India, to increase the present period of realization and repatriation to India of the amount representing the full export value of goods or software or services exported, from nine months to fifteen months from the date of export, for the exports made up to or on July 31, 2020.

2. The provisions in regard to period of realization and repatriation to India of the full export value of goods exported to warehouses established outside India remain unchanged.

3. AD Category – I banks may please bring the contents of this Circular to the notice of their constituents concerned.

4. The directions contained in circular have been issued under Section 10(4) and 11(1) of Foreign Exchange Management Act, 1999 (42 of 1999) and without prejudice to permissions / approvals, if any, required under any other law.

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appointment of MD in banks

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11853&Mode=0

RBI circular outlining the procedure, documentation, steps involved in appointment/ re-appointment of managing director, CEO, part time chairperson in banks. Banks have to send in their papers at least 4 months before the incumbent is due to demit office. They should give at least 3 names for appointment of CEO/ MD in order of preference. Some formats of declaration/ undertaking from the incumbents have been changed. This applies to termination of appointment also.

Appointment of Managing Director and Chief Executive Officer (MD & CEO) / CEO / part-time Chairperson (PTC) in Banks – ‘Declaration and Undertaking’ and allied matters

To complete the appointment of Managing Director and Chief Executive Officer (MD & CEO)/ CEO/ part-time Chairperson (PTC) in Banks in a timely manner, the following instructions have been reviewed:

  1. DBOD.No.ARS.BC.75/C.318(C)-72 dated September 2, 1972 on ‘Section 35B of the Banking Regulation Act, 1949’, prescribing Form A, B and C relating to appointment/ re-appointment/ remuneration, etc. of Chairman, Chief Executive Officer or any other Director or Termination of Appointment of a Director;
  2. DBOD.No.App.BC.47/C.318(C)-83 dated June 7, 1983 on the same subject (as above), advising banks to submit application seeking approval for appointment/ re-appointment of Chairman and Chief Executive Officer at least four months before expiry of the term of office of the present incumbent;
  3. DBOD.No.BC.64/08.94.002/2002 dated February 13, 2002 addressed to Chairman/ CEO/ MD of all private sector banks advising banks to forward a panel of three names while submitting proposal for appointment of CEO; and
  4. DBOD.No.BC.No.95/29.39.001/2010-11 dated May 23, 2011 advising modifications in the format of ‘Declaration and Undertaking’ prescribed for conducting due diligence of Directors to determine their ‘fit and proper’ status.

2. Based on the review, the ‘Declaration and Undertaking’ (Annex I) and specimen of ‘Form A’ as well as ‘Form B’ have been revised and are enclosed with this circular.

3. To enable Reserve Bank to convey the requisite approval in time on the re-appointment of an MD & CEO/ CEO in banks, the complete applications in the prescribed forms i.e., ‘Form B’ along with ‘Declaration and Undertaking’ from candidate(s), along with the remarks of Nomination and Remuneration Committee of having satisfied itself that the information is true and complete should be submitted to the Department of Regulation, Central Office, Reserve Bank of India, Mumbai, at least six months before the expiry of the term of office of the incumbent.

4. Proposals for appointment of a new MD & CEO/ CEO, should invariably contain a panel of at least two names in the order of preference. The proposals should be submitted to the Reserve Bank at least four months before the expiry of the term of office of the present incumbent.

5. Henceforth, banks should use, at the minimum, the revised format for obtaining the declaration and undertaking from all the directors.

6. Adherence to the instructions be ensured.

 

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doorstep banking services

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11852&Mode=0

RBI reiterating the need to provide doorstep banking services to senior citizens and differently abled persons.

Doorstep Banking Services for Senior Citizens and Differently Abled Persons

Please refer to para 2(g) of our circular DBR.No.Leg.BC.96/09.07.005/2017-18 dated November 9, 2017 on the captioned subject.

2. Banks were advised to make concerted efforts to offer certain basic banking services to senior citizens of more than 70 years of age and differently abled persons at the doorstep of such customers. Although banks were advised to implement the instructions by December 31, 2017, it has been observed that such services are yet to be offered by banks or were restricted to select branches.

3. In order to make the doorstep banking services for senior citizens and differently abled persons effective, banks are advised to incorporate the following aspects in their Board approved policy for such services:

  1. Banks shall offer the doorstep banking services on pan India basis. Banks should develop a Board approved framework for determining the nature of branches/centres where these services will be provided mandatorily and those where it will be provided on a best effort basis and make the policy public. The list of branches offering such doorstep banking services shall be displayed/updated on the bank’s website regularly.
  2. Banks shall give adequate publicity to the availability of these services in their public awareness campaigns. The charges, in this regard, shall also be prominently indicated in brochures and published in their websites.

4. Banks shall report the progress made in this regard to the Customer Service Committee of the Board every quarter. Further, they must ensure strict compliance with the above instructions by April 30, 2020.

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crop loans

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11851&Mode=0

short term crop loans eligible for interest subvention and prompt repayment incentive through kisan credit cards extended to 30th June, 2020 in view of the covid crisis.

Short Term Crop Loans eligible for Interest Subvention Scheme (ISS) and Prompt Repayment Incentive (PRI) through KCC

Please refer to the circular FIDD.CO.FSD.BC.No.1785/05.02.001/2019-20, dated February 26, 2020 advising banks to ensure that all Short Term Crop Loans eligible for Interest Subvention (IS) and Prompt Repayment Incentive (PRI) benefit are extended only through KCC w.e.f. April 1, 2020 and the existing Short Term Crop Loans which are not extended through KCC shall be converted to KCC loans by March 31, 2020.

2. In view of the complete lockdown in most of the states in the country and restrictions on movement except for providing essential services, it has been decided, in consultations with Ministry of Agriculture & Farmers Welfare, that the banks may convert the existing Short Term Crop Loans including agriculture gold loans into KCC loans by June 30, 2020 with commensurate extension of Interest Subvention (IS) and Prompt Repayment Incentive (PRI) benefit against such accounts till June 30, 2020.

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investments by non residents in govt. securities

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11849&Mode=0

RBI Circular on the subject of a new route of investment by non residents in government securities. This new route will be called “Fully Accessible Route” or FAR.

‘Fully Accessible Route’ for Investment by Non-residents in Government Securities

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the following regulations / directions, as amended from time to time, and the relevant directions issued thereunder:

  1. Foreign Exchange Management (Debt Instruments) Regulations, 2019 notified vide Notification No. FEMA. 396/2019-RB dated October 17, 2019 (hereinafter, Debt Regulations);
  2. The A.P. (DIR Series) Circular No. 31 dated June 15, 2018 read with A.P. (DIR Series) Circular No. 18 dated January 23, 2020; and
  3. The directions FMRD.FMSD.No.25/14.01.006/2019-20 dated March 30, 2020 issued today (hereinafter, FAR Directions).

2. A reference is also invited to the announcement made in the Union Budget 2020-21 that certain specified categories of Central Government securities would be opened fully for non-resident investors without any restrictions, apart from being available to domestic investors as well. Accordingly, it has been decided, in consultation with the Government of India, to introduce a separate route viz., Fully Accessible Route (FAR) for investment by non-residents in securities issued by the Government of India. The details of the scheme are attached (see Annex).

3. These directions shall come into effect from April 1, 2020.

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.


Annex

‘Fully Accessible Route’ (FAR) for investment by non-residents in Government Securities

The Reserve Bank, in consultation with the Government of India, introduces a separate channel, called the ‘Fully Accessible Route’ (FAR), to enable non-residents to invest in specified Government of India dated securities. Eligible investors can invest in specified Government securities without being subject to any investment ceilings. This scheme shall operate along with the two existing routes, viz., the Medium Term Framework (MTF) and the Voluntary Retention Route (VRR). The details of the scheme are as under-

2. Definitions

  1. ‘Eligible investors’ shall mean any “person resident outside India” as defined in section 2(w) of the Foreign Exchange Management Act, 1999 (42 of 1999) (FEMA).
  2. ‘Specified securities’ shall mean Government Securities as periodically notified by the Reserve Bank for investment under the FAR route. In this regard, a reference is invited to FAR Directions, issued today by the Reserve Bank.

3. The words and expressions used but not defined in these directions shall have the same meaning respectively assigned to them in the FEMA, 1999 or rules and regulations made thereunder.

4. Features

  1. Investment limits: There shall be no quantitative limit on investment by eligible investors in the specified securities. Investments made under FAR shall also not be subject to the limits specified in paragraphs 4(b), (c) and (e) respectively, of A.P. (DIR Series) Circular No. 31 dated June 15, 2018 (read with A.P. (DIR Series) Circular No. 18 dated January 23, 2020). All investments by eligible investors in the specified securities will be under the FAR from the date on which the FAR comes into effect.
  2. Treatment of existing investments in specified securities: Existing investments by eligible investors in specified securities shall be reckoned under the FAR.
  3. Process for Investment and reporting:
  1. FPIs, Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and other entities permitted to invest in Government Securities under the Debt Regulations can invest under this route as hitherto under existing arrangements.
  2. Eligible investors other than those referred to in 4(c)(i) above, may invest through International Central Securities Depositories. The process for such investments will be notified in due course.

5. Transition for FPIs: FPIs who currently hold investments in the specified securities shall, within one year from the date on which the FAR comes into effect, readjust their investments under the MTF to comply with requirements mandated in A.P. (DIR Series) Circular No. 31 dated June 15, 2018 (read with A.P. (DIR Series) Circular No. 18 dated January 23, 2020).

6. Investments by eligible investors under the route shall be governed by other applicable provisions of FEMA and the rules, regulations and directions issued thereunder by the Reserve Bank from time to time, unless otherwise specified.

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