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AKP Banking & Finance Digest- September 12, 2022

  1. INDIA

1.1. RBI releases notification on incentive for improving service to non-chest branches

The Reserve Bank of India has released a clarifying statement on the applicability of GST on the service charges levied on cash deposited by non-chest bank branches to the Currency Chests. The RBI explained that the amount in the circulars mentioned in the notification is exclusive of applicable taxes, thus, the service charges of INR 5 plus applicable taxes per packet and INR 8 plus applicable taxes per packet shall be applicable.[1]


1.2. RBI issues alert list of entities not authorised to deal in forex

The RBI has released an alert list of entities that are not authorised to deal in forex under the Foreign Exchange Management Act, 1999 (FEMA) and to operate electronic trading platforms for forex transactions. The central bank also stated that the list is not an exhaustive one and is dependent on the information available with RBI at the time of the press release. Hence, an entity not mentioned in the list shouldn’t be considered an authorised entity by the RBI. In addition, the RBI has released the list of authorised persons and authorised electronic trading platforms (ETP) on its website.[2]


1.3. RBI cancels Certificate of Registration of one NBFC

RBI has cancelled the Certificate of Registration (CoR) issued to the following non-banking financial company (NBFC):

S.No.

Name of the Company

CoR issued on

Cancellation order date

1.

ET Devassy and Sons Finance Private Limited

September 15, 2010

August 5, 2022

Hence, the NBFC shall not transact the business of a non-banking financial institution. [3]


1.4. NBFC surrender its Certificate of Registration

RBI has accepted the surrender of CoR of one NBFC.

S.No.

Name of the Company

CoR issued on

Cancellation order date

Tab Capital Private Limited

November 04, 2019

August 10, 2022

Hence, the company shall not transact the business of a non-banking financial institution. [4]


1.5. Exim Bank's Government of India supported Line of Credit (LoC) of USD 108.28 million to the Government of the Kingdom of Eswatini (Swaziland) for the purpose of financing construction of new Parliament Building in Eswatini

Export-Import Bank of India (“Exim Bank”) has entered into an agreement with the Government of the Kingdom of Eswatini (Swaziland), for making available to the latter, the Government of India supported Line of Credit (LoC) of USD 108,280,000 (USD One Hundred Eight million and Two Hundred Eighty Thousand only) for the purpose of financing the project for construction of new Parliament Building in Eswatini.


1.6. RBI issued directions to Sikar Urban Co-operative Bank Ltd, Sikar, Rajasthan

RBI has extended the directions issued to Sikar Urban Co-operative Bank Ltd, Sikar, Rajasthan for a period of three (03) months from September 10, 2022 to December 09, 2022. [5]



1.7. RBI issued direction to Nagar Urban Co-operative Bank Ltd., Ahmednagar

RBI has extended the directions issued to Nagar Urban Co-operative Bank Ltd., Ahmednagar for a period of three (03) months from September 06, 2022 to December 06, 2022. [6]


1.8. RBI issued direction to Dwarkadas Mantri Nagari Sahakari Bank. Ltd., Beed, Maharashtra

RBI has extended the directions issued to Dwarkadas Mantri Nagari Sahakari Bank. Ltd., Beed, Maharashtra for a period of three (03) months from September 10, 2022 to December 09, 2022. [7]


1.9. RBI issued direction to The Adoor Co-operative Urban Bank Ltd, Adoor, Kerala

RBI has extended the directions issued to The Adoor Co-operative Urban Bank Ltd, Adoor, Kerala for a period of three (03) months from September 10, 2022 to December 09, 2022. [8]


1.10. RBI penalizes various co-operative banks

RBI has imposed monetary penalties on:

Name of the Entity

Penalty imposed

Reason

INR 12,35,000 (Indian Rupees Twelve lakh and thirty-five thousand only)


for non-compliance with certain provisions of the “Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016.

INR 36,00,000 (Indian Rupees Thirty-six lakh only)

for non-compliance with certain provisions of the “Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016.

INR 9,10,000 (Indian Rupees Fifty-nine lakh and ten thousand only)


for non-compliance with the directions issued by RBI on ‘Creation of a Central Repository of Large Common Exposures - Across Banks’ dated September 11, 2013 read with ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting’ dated February 13, 2014 and Reserve Bank of India (Interest Rate on Deposits) Directions, 2016.

2. BHUTAN


2.1. Royal Monetary Authority of Bhutan releases RemitBhutan for non-resident Bhutanese

The Royal Monetary Authority (RMA) of Bhutan has released a feature in RemitBhutan which allows Non-resident Bhutanese (NRB) to open a Non-Resident Bhutanese Foreign Currency Account (NRBFC) and a Non-Resident Bhutanese Ngultrum Account (NRBNC) to deposit their foreign currency with the authorized banks in Bhutan. The RemitBhutan is a platform created by RMA with an intent to facilitate NRB to open foreign currency accounts in a secured and reliable manner.[12]


1. RBI/2022-23/112DCM (NPD) No. S770/09.40.002/2022-23, Reserve Bank of India, September 06, 2022.

2. Press Release: 2022-2023/835, the Reserve Bank of India, September 07, 2022.

3. Press Release: 2022-2023/845, Reserve Bank of India, September 08, 2022.

4. Press Release: 2022-2023/844, Reserve Bank of India, September 08, 2022.

5. Press Release: 2022-2023/859, Reserve Bank of India, September 10, 2022.

6. Press Release: 2022-2023/831, Reserve Bank of India, September 06, 2022.

7. Press Release: 2022-2023/856, Reserve Bank of India, September 09, 2022.

8. Press Release: 2022-2023/829, Reserve Bank of India, September 06, 2022.

9. Press Release: 2022-2023/853, Reserve Bank of India, September 09, 2022.

10. Press Release: 2022-2023/854, Reserve Bank of India, September 09, 2022.

11. Press Release: 2022-2023/855, Reserve Bank of India, September 09, 2022.

12. News update, released by the Royal Monetary Authority, Bhutan, September 06, 2022.




Disclaimer

The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.

For further queries or details you may contact:

Mr. Anuroop Omkar,

Partner, AK & Partners

anuroop@akandpartners.in


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