Blog Archives

Setting up a Public Credit Registry in India – Latest developments from RBI

I have in my earlier article on Ease of doing business in India, published by Tax Guru on 06.11.2017 had informed that RBI had agreed to take necessary steps to set up a Public Credit Registry in India and in tune with that, RBI recently got a report on Public Credit Registry in India from a High-Level Task Force set up by RBI itself.

RBI permit banks to reckon Govt securities held up to another 2 % of NDTL under FALLCR

It has been decided to permit banks, with effect from the date of this circular, to reckon Government securities held by them up to another 2 per cent of their NDTL, under FALLCR within the mandatory SLR requirement, as Level 1 HQLA for the purpose of computing their LCR. Hence, the carve-out from SLR, under FALLCR will now be 11 per cent, taking the total carve out from SLR available to banks to 13 per cent of their NDTL.

RBI grant banks option to spread provisioning for MTM losses on all investments held in AFS and HFT

In view of the continuing rise in the yields on Government Securities, as also the inadequacy of time to build investment fluctuation reserve (IFR) for many banks, it has been decided to grant banks the option to spread provisioning for their mark to market (MTM) losses on all investments held in AFS and HFT for the quarter ending June 30, 2018 as well. The provisioning required may be spread equally over up to four quarters, commencing with the quarter ending June 30, 2018.

Transition path to adopt Regulations for Investment by FPI in Debts

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Schedule 5 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017 notified vide Notification No. FEMA.20(R)/2017-RB dated November 07, 2017, as amended from time to time and the relevant directions issued thereunder.

Interest Rate Options (Reserve Bank) Directions, 2018

Please refer to FMRD circular FMRD.DIRD.12/14.01.011/2016-17 dated December 29, 2016 on introduction of Interest Rate Options in India. As announced in the first bi-monthly Monetary Policy Statement 2018-19 dated April 05, 2018, it has now been decided to permit Interest Rate Swaptions in Rupees so as to enable better timing flexibility for the market participants seeking to hedge their interest rate risk.

Compliances for FDI in India (RBI and Companies Act, 2013)

Compliance For Issuance Of Shares Under FDI In India: A. Compliance under Master Directions issued by RBI: 1. On receipt of payment from outside India, an Advance Remittance Form (ARF) is required to be filed online ( within 30 days intimating RBI about receipt of money for such purpose alongwith KYC and FIRC received from […]

RBI releases draft guidelines on Loan System for Delivery of Bank Credit

The Reserve Bank of India today released draft guidelines on loan system for delivery of bank credit which stipulate a minimum level of 'loan component' in fund based working capital finance and a mandatory Credit Conversion Factor (CCF) for the undrawn portion of cash credit/ overdraft limits availed by large borrowers, with a view to enhancing credit discipline among large borrowers.

Introduction of Single Master Form for reporting of Foreign Investment in India

Introduction of  Single Master Form for reporting of Foreign Investment in India: RBI issued an A.P (DIR Series) Circular No.30 dt. June 07, 2018 regarding reporting for foreign investments in an Indian Entities, whereby For reporting total foreign investment in an Indian entity, an Integrated reporting structure has been introduced which will be called as […]

Investment in the units of InvIT by sponsor CIC-NDSI

In order to enable Systemically Important Core Investment Companies (CIC-NDSI) to act as a sponsor of InvITs, it has been decided to permit CIC-NDSIs to hold InvIT units only as a sponsor. Exposure of such CICs towards InvITs shall be limited to their holdings as sponsors and shall not, at any point in time, exceed the minimum holding of units and tenor prescribed in this regard by SEBI (Infrastructure Investment Trusts) Regulations, 2014.

Second Bi-monthly Monetary Policy Statement, 2018-19-Policy Rates increased by 25 basis points

The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.

Central Bank Watch: Preparing for a hike

Abheek Barua* We have argued “Hike the interest rate now“, 1st June, 2018) that the current macroeconomic situation warrants a policy rate hike. Rising and more dispersed core inflation, the immediate and possible second-round effects of the fuel price increases and the pressure on the rupee; all call for a 25 basis point hike in […]