Alerts & Updates

  • RBI grants in-principal approval for Payment Banks.

  • Online reporting with RBI.

  • Note on clarification issued by MCA.

1) RBI grants in-principal approval for Payment Banks

The Reserve Bank of India (‘RBI’ of ‘Central Bank’) has given ‘in-principal’ approval to 11 selected companies for 18 months and upon complete adherence to stipulated conditions and guidelines laid down the applicant companies will be given licences. This move is expected to be the driver of financial inclusion and provide for a vibrant ecosystem.

Under strict due diligence of the applicant Companies, their management and undertaking governance issues with a focus on ‘fit and proper’ criteria for promoters by the members of External Advisory Committee, the Central Bank has given approval for undertaking only payment related activities and has imposed restrictions on lending activities carried by a full service bank.

Accordingly, the selected companies will take deposits, convey remittances and dispense payments to recipients making them ideal for migrant workers. The sole aim of RBI in issuing such approval is to ensure that with the assessed abilities, financial strength and technology of applicant companies, there is one hundred percent outreach of banking channels in areas which remain uncovered. It is also sensed that pursuant to these fresh approvals, existing banks and companies providing wallet services will face pressure.

The Press release 2015-2014/437 issued by Reserve Bank of India dated August 19, 2015 is enclosed herewith for your quick reference : - Mgb Updates 1.pdf

2) Online reporting with RBI

With a view to promote ease in reporting’s and intimation requirements in respect to Foreign Exchange Management (Transfer of issue of securities by a person resident outside Indian) the Reserve Bank of India has vide its circular dated August 21, 2015 enabled filing of form Foreign Currency Transfer of Shares (FC-TRS) for reporting transfer of shares, convertible debentures from resident to non-resident or vice-versa.

Online reporting with Reserve Bank of India is expected to ease the burden of preparing the documents and filing physical application with Authorised Dealer Banks and undertaking various follow-up actions thereon.

The form along with requisite annexures is required to be filed by affixing the Digital Signature along with the other requisite annexures on the Reserve Banks of India’s reporting platform. Using this link the Authorised Dealer Banks will authorise the transaction and have been instructed by RBI to call for further documents for verification and issuing approval to the transaction.

The A. P. (DIR Series) Circular No. 9 issued by the Reserve Bank of India has been enclosed herewith for further reference:- Mgb Updates 2.pdf

3) Note on clarification issued by MCA

The Ministry of Corporate Affairs (‘MCA’) has recently issued clarification with regard to whether a Company is required to provide the financial statements to all members, debenture holder of the Company while convening Annual General Meeting (‘AGM’) at a shorter notice.

As per Section 101 of the Companies Act, 2013 (‘Act’), though companies can convene AGM at a shorter notice, they are required to also circulate the financial statements and other relevant documents as stipulated under Section 136 of the Act at a shorter notice.

Further, as per the said clarification holding companies having one or more foreign subsidiary companies and where as per the relevant laws of the foreign country the accounts of such subsidiary/s are not required to be mandatorily audited, the holding company in India needs to prepare the accounts of such subsidiary company in accordance of the applicable provisions of the Act. Wherever such adherence is not possible adequate reasons for deviation is required to be disclosed and the unaudited accounts are required to be filed in compliance to Section 136 and Section 137 of the Act.

The said clarification dated July 21, 2015 is available on the enclosed link for quick reference;