Govt likely to focus on strengthening related party clause in company law Feb 27, 2024

In the backdrop of big corporates like Zee Entertainment Enterprises Ltd (ZEEL) coming under scrutiny for alleged governance lapses, the Centre is likely to review the related party clause of the Companies Act 2013 and may look at further strengthening it, a senior government official said. “The government will focus attention on the related party clause. It will see if there is a need to strengthen it. How do we strengthen the related party clause? This will engage the government's attention. All the big investigations have found the issue of related party transactions. Currently, the regime is lenient and disclosure-based,” the official told Moneycontrol. The official said that the recent investigations of ZEEL are likely to allegedly expose the issue of related party transactions.

MCA starts major review of regulatory rules Mar 06, 2024

The ministry of corporate affairs (MCA) has begun a comprehensive review of the rules and regulations, including the norms for accounting and auditing practices. According to Manoj Govil, secretary-MCA, extensive public consultations would be carried out for the review, which is aimed at making compliance easier, and making regulation more system-driven and effective.

Why mandating audit trail might increase the compliance burden for businesses

Ease of Doing Business for MSMEs: The Ministry of Corporate Affairs (MCA) is continuously working towards driving transparency and strengthening the integrity of financial reporting in the business. The notification pertaining to the new audit trail rule is a step in this direction. This mandate is expected to be implemented from April 1, 2022, for companies that are registered under the Companies Acts in India. As per the notification “Every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.”

Feb 11, 2023 

The Reserve Bank on Friday updated its �Alert List� for the public on unauthorised forex trading platforms to include names of entities/platforms/ websites which appear to be promoting such entities.

In September last year, the central bank came out with an �Alert List� containing the names of 34 entities. The list now has 48 entries.�The Alert List has been updated and includes names of entities/platforms/ websites which appear to be promoting unauthorised entities/ETPs, including through advertisements of such unauthorised entities or claiming to be providing training/advisory services,� the RBI said, and added the Alert List is not exhaustive.

No more penal interest: How RBI decision will help home, personal, car and other loan borrowers

Feb 09, 2023 

In a move that will help customers, the Reserve Bank of India (RBI) has proposed to do away with the levy of �penal interest� on loan defaults by regulated entities and replace it with �penal charges�. The central bank will issue draft guidelines on the issue for comments from stakeholders soon.

In the bi-monthly �Statement on Developmental and Regulatory Policies� released today (February 8), the RBI said that �divergent practices� by regulated entities with regard to the levy of penal interest have led to customer grievances and disputes have been seen.

Sebi allows all RBI-authorised payment systems for RFQ settlement

Jan 10, 2023 

The Securities and Exchange Board of India (Sebi), in a circular issued on Monday, clarified that all payment mechanisms provided by banks and payment aggregators authorised by the Reserve Bank of India (RBI) to be used for settlement of trades executed on the Request for Quote or RFQ platform.
This was in response to a clarification sought by stock exchanges and market participants as to whether payment mechanisms other than �Real-Time Gross Settlement� or RTGS could be used for settlement.

RBI to launch retail e? pilot on Dec 1

Dec 05, 2022 

The Reserve Bank of India has announced the launch of the pilot project for retail digital rupee on December 1, 2022, informed RBI in an official press release.

According to the release, users will be able to transact with e?-R through a digital wallet offered by the participating banks and stored on mobile phones and devices. The pilot would cover select locations in closed user groups (CUG) comprising participating customers and merchants. �The e?-R would be in the form of a digital token that represents legal tender. It would be issued in the same denominations that paper currency and coins are currently issued. It would be distributed through intermediaries, i.e., banks,� RBI noted.

Despite imminent slowdown, rate hikes to continue

Dec 06, 2022 

While the fiscal second quarter growth may be just half of what it was in the first quarter, the central bank may not still put a brake on raising interest rates as price pressures continue.

Economists have factored a lower growth for the September quarter at 6.5 percent compared to 13.5 percent in the June quarter. Despite risks of a further slowdown, the Reserve Bank is still expected to deliver a 35 to 50 basis points ( one bps is 0.01 percent) rate hike to manage inflation within the mandated band of 2-6 percent.

RBI raises minimum capital requirement for ARCs, widens scope of their activity

Dec 09, 2022

The Reserve Bank of India has raised the minimum capital requirement for asset reconstruction companies (ARC) and widened the scope of their activities by allowing them to act as resolution applicants under the bankruptcy law backpedaling from its previous defiance on the matter.

These are crucial parts in the revised set of rules for ARCs that the regulator unveiled Tuesday with an aim to improve their regulatory framework and strengthen their governance standard

RBI issues consolidated guidelines on unhedged foreign currency exposure

Dec 09, 2022 

The Reserve Bank on Tuesday modified and consolidated guidelines for banks on unhedged foreign currency exposures of any entity to prevent losses due to heightened volatility in the forex market.The RBI has, from time to time, issued several guidelines, instructions and directives to the banks on Unhedged Foreign Currency Exposure (UFCE) of the entities, which have borrowed from banks.

In the wake of a bank seeking clarification on various aspects related to UFCE, the RBI said a comprehensive review of the extant guidelines has been undertaken and all the existing instructions on the subject have been consolidated.These instructions shall come into force from January 1, 2023, it said in a circular.

Ratings devoid of lenders detail should be treated as unrated exposure: RBI

 Dec 14, 2022 

In a move that may put pressure on the capital adequacy of banks, the Reserve Bank of India (RBI) on Monday said loan ratings without information about lenders� details should be treated as unrated exposure.
Capital should be set aside using risk weightings applicable for unrated exposure to companies and non-banking finance

companies.
The RBI said these instructions would be effective on March 31, 2023. Thus, any burden on account of higher capital charges will be in the current financial year (FY23).
The press releases (PRs) issued by external credit assessment institutions (ECAI) on ratings often do not have lenders� details.

India Inc expects another 35-50 basis points policy rate hike by RBI

Sep 23, 2022 

India Inc is bracing itself for yet another policy rate hike by the RBI Monetary Policy Committee in the range of 35-50 basis points as the move seems unavoidable in the wake of the global monetary tightening to limit the impact of inflation, ASSOCHAM has said. The chamber has sought a balanced and smooth transition to the new trajectory for borrowing costs.

Seeking several measures for ensuring that adequate liquidity is maintained within the system, the ASSOCHAM has said '' 35-50 bps rate hike seems imminent and inevitable while the MPC may leave the CRR and SLR rates unchanged''.

ASSOCHAM president Mr Sumant Sinha said while 35-50 bps increase in the benchmark rates seems unavoidable at this point of time given the continuous monetary tightening by the US Federal Reserve and other central banks. He however noted that economic activity is at robust levels. �India is in a sweet spot with growth coming from all quarters and inflation is relatively in control. Softening of crude prices will augur well for the economy and we should start the interest rate cut cycle from early part of FY24.�

RBI may establish fraud registry to check bank frauds

�         Aug 30, 2022 

The Reserve Bank of India is looking forward to establishing a fraud registry to compile a database of dubious websites, phones, and other digital fraud methods as part of its attempts to increase client safety.

According to RBI executive director Anil Kumar Sharma, such a database will assist to stop these fraudsters from committing the same fraud because the websites or phone numbers will be blacklisted.
"There is no definite timeline for setting up of the fraud registry. At present, we are talking to different stakeholders including different departments like payments and settlement and supervision of RBI," Sharma revealed.

Users in the payment system will have access to this registry for almost real-time fraud monitoring. To inform clients about new hazards, the aggregated fraud data will be made public.

  Aug 12, 2022

RBI Digital Lending Rules: The Reserve Bank of India (RBI) has issued strict guidelines for digital lending in the country. Borrowers are set to benefit from the new RBI guidelines directed at curbing rampant malpractices in the digital lending ecosystem.

The RBI has issued the guidelines based on recommendations of a working group for digital lending which submitted its report in November 2021. You can read more details of the guidelines issued by the RBI here. In this article, we take a look at what the borrowers should know before going for a loan in view of the new lending norms issued by the RBI.

Legal experts say that borrowers should know the safeguards assured by the RBI�s new regulatory framework for digital lending.

�These norms were required to protect the interest of the borrowers and to ensure that the money cycle is taking place through legitimate apps with proper KYC structure and audit mechanism as a lot number of fake applications are being reported and the end user incur losses.

RBI issues consolidated guidelines on unhedged foreign currency exposure

Dec 09, 2022 

The Reserve Bank on Tuesday modified and consolidated guidelines for banks on unhedged foreign currency exposures of any entity to prevent losses due to heightened volatility in the forex market.The RBI has, from time to time, issued several guidelines, instructions and directives to the banks on Unhedged Foreign Currency Exposure (UFCE) of the entities, which have borrowed from banks.

In the wake of a bank seeking clarification on various aspects related to UFCE, the RBI said a comprehensive review of the extant guidelines has been undertaken and all the existing instructions on the subject have been consolidated.These instructions shall come into force from January 1, 2023, it said in a circular.

RBI issues consolidated guidelines on unhedged foreign currency exposure

Dec 09, 2022 

The Reserve Bank on Tuesday modified and consolidated guidelines for banks on unhedged foreign currency exposures of any entity to prevent losses due to heightened volatility in the forex market.The RBI has, from time to time, issued several guidelines, instructions and directives to the banks on Unhedged Foreign Currency Exposure (UFCE) of the entities, which have borrowed from banks.

In the wake of a bank seeking clarification on various aspects related to UFCE, the RBI said a comprehensive review of the extant guidelines has been undertaken and all the existing instructions on the subject have been consolidated.These instructions shall come into force from January 1, 2023, it said in a circular.

Ratings devoid of lenders detail should be treated as unrated exposure: RBI

�         Dec 14, 2022 

In a move that may put pressure on the capital adequacy of banks, the Reserve Bank of India (RBI) on Monday said loan ratings without information about lenders� details should be treated as unrated exposure.
Capital should be set aside using risk weightings applicable for unrated exposure to companies and non-banking finance

companies.
The RBI said these instructions would be effective on March 31, 2023. Thus, any burden on account of higher capital charges will be in the current financial year (FY23).
The press releases (PRs) issued by external credit assessment institutions (ECAI) on ratings often do not have lenders� details.

India Inc expects another 35-50 basis points policy rate hike by RBI

Sep 23, 2022

India Inc is bracing itself for yet another policy rate hike by the RBI Monetary Policy Committee in the range of 35-50 basis points as the move seems unavoidable in the wake of the global monetary tightening to limit the impact of inflation, ASSOCHAM has said. The chamber has sought a balanced and smooth transition to the new trajectory for borrowing costs.

Seeking several measures for ensuring that adequate liquidity is maintained within the system, the ASSOCHAM has said '' 35-50 bps rate hike seems imminent and inevitable while the MPC may leave the CRR and SLR rates unchanged''.

ASSOCHAM president Mr Sumant Sinha said while 35-50 bps increase in the benchmark rates seems unavoidable at this point of time given the continuous monetary tightening by the US Federal Reserve and other central banks. He however noted that economic activity is at robust levels. �India is in a sweet spot with growth coming from all quarters and inflation is relatively in control. Softening of crude prices will augur well for the economy and we should start the interest rate cut cycle from early part of FY24.�

RBI may establish fraud registry to check bank frauds

  Aug 30, 2022

The Reserve Bank of India is looking forward to establishing a fraud registry to compile a database of dubious websites, phones, and other digital fraud methods as part of its attempts to increase client safety.

According to RBI executive director Anil Kumar Sharma, such a database will assist to stop these fraudsters from committing the same fraud because the websites or phone numbers will be blacklisted.
"There is no definite timeline for setting up of the fraud registry. At present, we are talking to different stakeholders including different departments like payments and settlement and supervision of RBI," Sharma revealed.

Users in the payment system will have access to this registry for almost real-time fraud monitoring. To inform clients about new hazards, the aggregated fraud data will be made public.

Aug 12, 2022

RBI Digital Lending Rules: The Reserve Bank of India (RBI) has issued strict guidelines for digital lending in the country. Borrowers are set to benefit from the new RBI guidelines directed at curbing rampant malpractices in the digital lending ecosystem.

The RBI has issued the guidelines based on recommendations of a working group for digital lending which submitted its report in November 2021. You can read more details of the guidelines issued by the RBI here. In this article, we take a look at what the borrowers should know before going for a loan in view of the new lending norms issued by the RBI.

Legal experts say that borrowers should know the safeguards assured by the RBI�s new regulatory framework for digital lending.

�These norms were required to protect the interest of the borrowers and to ensure that the money cycle is taking place through legitimate apps with proper KYC structure and audit mechanism as a lot number of fake applications are being reported and the end user incur losses.

RBI issues two circulars: Transition to CoF, payment aggregator norms to be eased

Jul 29, 2022

The Reserve Bank of India (RBI) on Thursday released guidelines to ease the transition to new norms on card-on-file (CoF) tokenisation and licensing of payment aggregators (PAs) in two separate notifications.

While reiterating that with effect from October 1, no entity in the card transaction chain, other than card issuers and card networks, shall store CoF data, the central bank notified two interim measures. Other than the card issuer and the card network, the merchant or its PA involved in settlement can save the CoF data for a maximum period of four days after the transaction date or till the settlement date, whichever is earlier. This data shall be used only for settlement of such transactions, and must be purged thereafter, the RBI said.

Digital lending entities should only carry out activities for which they have licenses: Shaktikanta Das

Jul 23, 2022

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said digital lending players should only carry out activities for which they have licenses and violations are not acceptable.

Last month, RBI had asked non-bank Prepaid Payment Instrument (PPI) issuers not to load their wallets and cards from credit lines or preset borrowing limits.
�The (digital lending) firms should operate under the licenses granted to them. If they are doing anything beyond that then they should seek our permission.

Reserve Bank implementing central digital currency in phases: RBI executive director Ajay Kumar Choudhary

Jul 21, 2022

The Reserve Bank of India is in the process of implementing the Central Bank Digital Currency (CBDC) in a phased manner for the wholesale and retail segments, said its executive director. The CBDC will be a sovereign-backed digital currency.

Passage of the Finance Bill 2022 has enabled RBI to conduct a pilot and subsequent issuance of CBDC, Choudhary while delivering a keynote address at 'PICUP Fintech Conference & Awards' by industry association FICCI on Wednesday.

Choudhary said RBI has fostered innovation and it is keeping a close eye on the benefits and risks associated with innovative products and services offered by fintechs. "The challenge for policymakers is to maximise the benefits of fintech while minimising the potential risk," he said.

RBI says products of 4 entities viable for cross border payments under regulatory sandbox

Jul 20, 2022

Products offered by four entities for �cross border payments� have been found viable by the Reserve Bank of India (RBI) after they completed the test phase under the regulatory sandbox scheme.

Regulatory sandbox usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain relaxations for the limited purpose of the testing.

RBI liberalises norms to boost forex inflows, shore up falling Rupee

Jul 07, 2022

The Reserve Bank of India on Wednesday announced measures to diversify and expand the sources of forex funding with an aim to mitigate volatility and dampen global spillovers, including letting foreign investors invest in short-term corporate debt and allowing the purchase of more government securities under the fully accessible route.

The measures taken by the central bank come against the backdrop of the Rupee depreciating by 4.1% against the US dollar during the current financial year so far (up to July 5) amid the ongoing geopolitical tensions.

�The global outlook is clouded by recession risks. Consequently, high risk aversion has gripped financial markets, producing surges of volatility, sell-offs of risk assets and large spillovers, including flights to safety and safe haven demand for the US dollar. As a result, emerging market economies are facing retrenchment of portfolio flows and persistent downward pressures on their currencies," the RBI said while announcing the new measures to boost forex inflows.

Jun 14, 2022

RBI�s Regulations Review Authority has suggested all regulations of the central bank should underline the rationale and be reviewed periodically to align them with evolving industry practices and financial landscape.

Regulations Review Authority (RRA 2.0) was set-up by the Reserve Bank of India in April last year with the objective of reducing the compliance burden on Regulated Entities (REs) by streamlining the regulatory instructions and rationalising reporting requirements.

RBI hikes repo rate by 50 bps as inflationary pressures intensify; retains GDP forecast

Jun 08, 2022

The Reserve Bank of India (RBI) Governor on Wednesday announced that the Monetary Policy Committee voted unanimously to hike the benchmark interest rate by 50 bps with immediate effect. The RBI also left its FY23 GDP growth forecast unchanged at 7.2%.

The policy repo rate now stands at 4.90%, still below its pre-pandemic level. Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) rates have been raised by 50 bps. SDF rate stands adjusted to 4.65%, MSF rate adjusted to 5.15%.

On the inflation front, the RBI revised its projection to 6.7% from the earlier estimate of 5.7% as the protracted nature of the Russia-Ukraine war puts pressure on commodity prices globally.

Appointment of foreign national as a director of Indian company

10th Jan, 2023

Under Indian Companies Act, 2013, six types of Directors are appointed in a company, i.e., Women Director, Independent Director, Small Shareholders Director, Additional Director, Alternative and Nominee Director. The Act does not bar a foreign national to be appointed as any of the above-mentioned directors in Indian Companies by complying with the Companies Act, 2013 (hereinafter referred as �The Act�) read along with the Companies (Appointment and Qualifications of Directors) Rules, 2014 (hereinafter referred as �The Rules�)

Online registration of units through MCA portal for ESI registration and inspection of units

10th January,2023
Newly incorporated Public Limited, Private Limited and One Person Companies registered with effect from February 15, 2020 ['Companies'] are being allotted ESIC registration number by default at the time of its incorporation. Once these Companies are registered under Employee State Insurance Act, 1948 ['ESI Act'] they will have to comply with the provisions of ESI Act mandatorily as their registration becomes active automatically on generation from the date of incorporation, irrespective of whether these Companies fall under the ambit of the thresholds limits as applicable[1]. However, it raised a new challenge before the Employee State Insurance Corporation to identify whether these Companies fall under the thresholds or not? To meet the above issue, Employee State Insurance Corporation had released a Circular in this regard dated December 22, 2022 which states that Companies who have got default registration under ESI Act on incorporation through MCA portal need not comply with the provisions of ESI Act for a period of six months from the date of registration or until it exceeds the thresholds as specified under ESI Act, whichever is earlier.

Checklist of documents for directorship in Indian companies by persons resident outside India

11th January, 2023

In the recent years, the Government of India has liberlised its policies for the Foreign Investors whereby they can come to India and invest in various sectors. Presently every sector except a few like railway, defence, agriculture, real estate etc are allowed by the Government, where Foreign Direct Investment can be made through automatic/ approval routes. However, by making FDI, a Person Resident Outside India can only become the shareholder, but theday to days affairs of the company shall lie with the Directors only. So while making investment the investor would like to be part of the Board of Directors of the company. Hence, the Ministry of Corporate Affairs have enacted the various provisions under the Companies Act, 213 through which Persons Resident Outside India can be allocated Directorship in Indian Companies by complying with the Companies Act, 2013 (hereinafter referred as "The Act") read along with the Companies (Appointment and Qualifications of Directors) Rules, 2014 (hereinafter referred as "The Rules")