• RESERVE BANK OF INDIA

A. P. (DIR Series) Circular No. 11 Dated 22.08.2008 - Memorandum of Instructions for Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts of Non-resident Exchange Houses

RBI has decided to permit AD Category - I banks to designate drawee branches under Rupee Drawing Arrangements (RDA) beyond 300, provide such branches are under Core Banking Solution where on-line monitoring of funds position is ensured to avoid concealed overdrafts in vostro accounts, subject to the terms and conditions of Reserve Bank's approval for the tie-up with an Exchange House (EH) and the instructions pertaining to Rupee Drawing Arrangements issued by the Reserve Bank from time to time.

A. P. (DIR Series) Circular No. 10 Dated 21.08.2008 - Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR

AD Category - I banks has been directed that as a result of further revision taken place on August 07, 2008 rupee value of the special currency basket has been revised to Rs. 60.4392 from Rs.62.5198 , which is to be effective from August 12, 2008.

A. P. (DIR Series) Circular No. 09 Dated 21.08.2008 - Foreign Exchange Management Act, 1999 - Advance Remittance for Import of Goods - Liberalisation

In order to simplify the procedures, RBI has decided to enhance the limit for advance remittance from USD 100,000 to USD 5,000,000 or its equivalent. As per the RBI conditions importer should be a customer of AD Category - I bank and his account should be in compliance of Reserve Bank's extant KYC / AML guidelines. Banks are advised to carry out the transactions after being satisfied about the bonafides of the transactions and to follow up compliance of documentary evidence for import into India.

All Advance payments are to be made strictly as per the provisions of the sale contract and to be made directly to the account of the manufacturer / supplier concerned. In case of non-import of goods Banks are required to make sure that amount of advance remittance is repatriated to India or is utilized for purposes permitted under the Act, Rules or Regulations made there under.

Circular No. RPCD. PLFS. BC. No. 22 /05.04.02/ 2008-09 Dated 26.08.2008 - Simplification of lending procedures for crop loans

RBI has simplifies the procedures for the farmers in line of the recommendations made by the Working Group. In case of small loans to Rs.50,000 to small and marginal farmers, Banks are advised to obtain self-declaration from the borrower in place of the 'no dues' certificate. At the same time to overcome the problem faced by the banks while lending to landless labourers share-croppers and oral lessees due to the absence of documents required, banks are recommended to accept certificates provided by panchayati raj/ local administration institutions in respect of the cultivation of crops in such cases of loan.

Circular No. RPCD.CO.RF.BC.No.21/ 07.38.03 / 2008-09 Dated 18.08.2008 - Enhancement of transparency in bank's affairs through disclosures

In order to enhance the transparency of banks Reserve Bank of India is empowered to impose penalty on a state / central co-operative bank under the provisions of Section 47(A) of the Banking Regulation Act, 1949 (AACS) for non-compliance of any of the provisions of the Act or requirement thereof. Now, it has been decided that

disclosure of the details relating to penalty imposed along with the essential details of the circumstances under which the penalty is imposed on the bank will be made through a Press Release and placed in public domain by the Reserve Bank.

Circular No. DBOD.No.BP.BC.No.37 /21.04.132/2008-09 Dated 27.08.2008 - Prudential Guidelines on Restructuring of Advances by Banks

In order to incorporate the recommendations made by the Working Group and the public comments received on the draft prudential guidelines, the Reserve Bank of India has issued fresh prudential guidelines. The prudential guidelines are on restructuring of loans by banks other than the Corporate Debt Restructuring (CDR) and Small and Medium Enterprises (SMEs) Debt Restructuring Mechanisms. The guidelines are issued as per the declaration in the Annual Policy statement for the year 2006-07 and would be applicable to all accounts restructured after 27th August 2008.

Circular No. DBOD. No. Leg. BC. 34 /09.07.005/2008-09 Dated 22.08.2008 - Unclaimed Deposits / Inoperative Accounts in banks

The Reserve Bank of India have reviewed instructions and advise banks on the inoperative accounts or unclaimed deposits in bank of the account holders whose whereabouts is unknown to the bank and the account has not been operative for past two years. RBI instructed banks to review such accounts and maintain these accounts in separate ledger/s after getting it segregated. RBI has also advised the banks to be more pro-active in follows ups with the customers and finding the whereabouts of the account holders whose accounts have remained inoperative. On the complaints of many customers concerning their accounts having been classified as inoperative, RBI is of opinion that banks are undeservedly enjoying such unclaimed deposits, while paying no interest on it.

• DIRECTORATE GENERAL OF FOREIGN TRADE

Policy Circular No. 29(RE-08)/2004-2009 Dated 20.08.2008 - Clarification regarding Grant of Deemed Export Benefits for supplies to Mega Power Projects

It is clarified by DGFT that deemed export benefits are available on supply of goods to Mega Power Projects, while responding to the query of Department of Power regarding grant of Deemed Export Benefits for supplies to Mega Power Projects. It is further clarified in order to avail this benefit the ICB procedure should be followed either at the stage of power procurement or Engineering and procurement contract.

Policy Circular No. 28(RE-08)/2004-2009 Dated 20.08.2008 - Guidelines for import of Rough Marble Blocks/Slabs for the year 2008-09

Quantity of import allowed as per the Guidelines regarding Entitlement of units for import of rough marble blocks/slabs for the year 2008-09 has been raised from the 1.1 lakh MT to 1.4 lakh MT for the year 2008-09.

• INSURANCE REGULATORY DEVELOPMENT AUTHORITY

Circular No. IRDA/INV/CIR/008/2008-09 Dated 22.08.2008 - IRDA (Investment) (Fourth Amendment) Regulations, 2008- Reg.

IRDA Investment Regulations, 2000 has been amended vide IRDA (Investment) (Fourth Amendment) Regulations, 2008 incorporating the recommendations made by Working Group, Amendment thus made to the regulation have impact on the provisions relating to Definitions, Renaming of other than Approved Investments, Compliance To Exposure Norms, Returns To Be Furnished and Constitution Of Investment Committee And Investment Policy.

Circular No. IRDA/011/ Brok-Comm/Aug-08 Dated 25.08.2008 - Limits on payment of commission or brokerage on general insurance business with effect from 1st October 2008

IRDA has issued directions regarding Maximum percentage of premium that can be paid as agency commission or brokerage on a general insurance policy and at the same it provides that agency commission and brokerage cannot be paid simultaneously for a single insurance policy , it has to be either brokerage or agency commission.

• SECURITIES AND EXCHANGE BOARD OF INDIA

SMD Circular No. MIRSD/ DPSIII/ Cir-26/ 08 Dated 22.08.2008 - Internal Audit for stock brokers/clearing members

SEBI has advised Stock Exchanges to instruct their stock brokers/clearing members to carry out complete internal audit on a half yearly basis by independent qualified Chartered Accountants. Audit thus conducted should comply with the mandatory requirement Provided under Securities Contracts (Regulation) Act 1956, SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992, circulars issued by SEBI, agreements, KYC requirements, Bye Laws of the Exchanges and cover, interalia, the existence, scope and efficiency of the internal control system.

Its being recommended to Stock Exchanges to make modifications to the relevant bye-laws, rules and regulations required for the implementation and communicate to SEBI the status of the implementation

• INDUSTRIAL POLICY AND PROMOTION

Press Note No. 8 (2008 Series) Dated 19.08.2008 -  Guidelines for Foreign investment in Commodity Exchanges

A transition / complying/correction time allowed to the existing Commodity exchange(s) to divest the foreign equity equal to the amount by which the cap was being exceeded in non compliance of the Press Note 2(2008). In order to facilitate the compliance of the guidelines notified vide Press Note 2(2008) all Commodity Exchanges are required to furnish a compliance report and non compliance of the conditions after 30.6.2009 would be deemed as a violation of the Foreign Exchange Management Act, 1999.

• INDIRECT TAX

Customs Non-Tariff

CBEC Customs Non-Tariff Notification No. 102/2008 Dated 26.08.2008 -Determines exchange rates of conversion  effective from 1st September, 2008 relating to imported and export goods

Central Board of Excise and Customs determines the rate of exchange of conversion of specified foreign currency effective from 1st September, 2008 relating to imported and export goods in exercise of the powers conferred by section 14 of the Customs Act, 1962.

• PRESS INFORMATION BUREAU

Dated 21.08.2008 - Union Cabinet approval for implementation of the Unorganized Sector Workers' Social Security Bill, 2008

Union Cabinet has granted Approval to Unorganized Sector Workers' Social Security Bill, 2008 after making official amendments to the Unorganized Sector Workers' Social Security Bill, 2007 which is pending in Rajya Sabha. The concerned Bill aims at setting up a National Advisory Board and enabling the Central Government to formulate of welfare schemes for the unorganized workers.