RBI Circular Date

Brief  of the Circular

05/10/2009

It is clarified that the increase in the limit for advance remittance for all admissible current account transactions for import of services without bank guarantee is not applicable for a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments.

In the case of a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments, approval from the Ministry of Finance, Government of India for advance remittance for import of services without bank guarantee for an amount exceeding USD 100,000 (USD One hundred thousand) or its equivalent would continue to be required.

All other terms and conditions specified in A.P. (DIR Series) Circular No. 15 dated September 8, 2008, shall remain unchanged.

05/10/2009

At present banks are allowed to issue guarantees in favour of a non-resident service provider, on behalf of a resident customer who is a service importer, for an amount up to USD 100,000 or its equivalent, subject to the terms and conditions stipulated.

With a view to further liberalise the procedure (other than in respect of a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments) for import of services, it has been decided to increase the limit for issue of guarantee by AD Category-I banks from USD 100,000 to USD 500,000. Accordingly, AD Category-I banks are now permitted to issue guarantee for amount not exceeding USD 500,000 or its equivalent in favour of a non-resident service provider, on behalf of a resident customer who is a service importer, provided:

1. the AD Category-I bank is satisfied about the bonafides of the transaction;
2. the AD Category-I bank ensures submission of documentary evidence for import of services in the normal course; and
3. the guarantee is to secure a direct contractual liability arising out of a contract between a resident and a non-resident.

In the case of a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments, approval from the Ministry of Finance, Government of India for issue of guarantee for an amount exceeding USD 100,000 (USD One hundred thousand) or its equivalent would be required.

05/10/2009

At present banks and Primary Dealers are required  to report all transactions in interest rate swaps and forward rate agreements, excluding client trades, on the reporting platform developed by CCIL for this purpose. With a view to accessing complete information on this segment of the market, it has now been decided to collect the details of client trades in respect of IRS transactions. Accordingly, banks and PDs are advised to report the IRS transactions entered into with their clients in the prescribed format on a weekly basis to the Financial Markets Department.

12/10/2009

12/10/2009

On a review, the Ministry of Housing & Urban Poverty Alleviation has comprehensively revised the SJSRY Scheme. The main objectives of the revamped SJSRY scheme are (i) addressing urban poverty through gainful employment to the urban unemployed or underemployed poor by encouraging them to set up self-employment ventures (individual or group) with support for their sustainability, or undertake wage employment (ii) supporting skill development through training to enable urban poor to undertake self employment and (iii) Empowering the community to tackle the issues of urban poverty through suitable self managed community structures. (The revised circular is available at : http://rbidocs.rbi.org.in/rdocs/notification/PDFs/SJSRYCOct122009.pdf

However, as regards mechanism of administering the subsidy under the revised scheme and new reporting formats, we have sought clarifications from the Ministry of Housing & Urban Poverty Alleviation and, as a result, clarifications/instructions in this regard would be communicated as soon as received from the Government of India.

16/10/2009

Now the National Securities Clearing Corporation Limited (NSCCL) and the clearing house of the Bombay Stock Exchange (BSE), i.e., Indian Clearing Corporation Limited (ICCL) have been permitted to open transitory pooling accounts with the Reserve Bank of India, Mumbai to which, the buyer of the securities will transfer funds through his bank under RTGS to settle OTC trades in corporate bonds on a DvP-I basis. Under the proposed settlement mechanism, it will be the responsibility of the NSCCL/ICCL to ensure DvP-I. (i.e., on a trade-by-trade basis).

All OTC trades in corporate bonds shall necessarily be cleared and settled through the NSCCL or ICCL under the above arrangement, as per the norms specified by the NSCCL and the ICCL from time to time, with effect from December 01, 2009

20/10/2009

Credit Information Companies (Regulation) Act, 2005 have been operationalised with effect from December 14, 2006. In terms of Section 15(1) of the Act, every credit institution has to become member of at least one credit information company within a period of three months from commencement of the Act or any extended time allowed by the Reserve Bank on application.

2.  As RRBs fall under credit institutions as defined in sub-section (f) of Section 2 of the Act, they would be required to take membership of at least one credit information company and provide credit data (positive as well as negative) to the credit information company in the format prescribed by the credit information company. The success of credit information collection and dissemination system depends on the data supplied by banks to the credit information companies. Therefore, it is desirable that RRBs should be in readiness to supply data to credit information companies as and when they become operational. In view of this, RRBs are advised to urgently initiate steps to build up database and be in readiness for effective exchange of credit information without any loss of time.

3.  In this connection we also invite your attention to the provisions of sub section (1) of Section 21 of the Credit Information Companies (Regulation) Act, 2005, which provides "any person, who applies for grant or sanction of credit facility, from any credit institution, may request to such institution to furnish him a copy of the credit information obtained by such institution from the credit information company".

Further, sub-section (2) of the said Section also specifies that every credit institution shall on receipt of request, as indicated in sub-section (1), furnish to such person a copy of the credit information subject to payment of charges specified by the Reserve Bank under the Regulations.

4.  You might be aware that Reserve Bank, in Credit Information Companies Regulations, 2006, framed under the Act, has already prescribed in Regulation 12(3) a maximum fee of Rs. 50/- (Rupees fifty only) for the purpose.

5. RRBs are, therefore, advised to ensure strict compliance with the provisions of the Credit Information Companies (Regulation) Act, 2005 as well as the rules and regulations framed thereunder.

Close As on 01/10/2009

Absolute Change during the week

% age during the Week

Close As on 08/10/2009

Absolute Change during the week

% age during the Week

BSE Sensex

17134.55

353.1

2.10%

16843.54

291.0

1.70%

Rs/US $

47.76

0.2

0.44%

46.34

1.4

2.97%