• RESERVE BANK OF INDIA

A. P. (DIR Series) Circular No. 23 Dated 15.10.2008 - Overseas Foreign Currency Borrowings by Authorised Dealer Banks - Enhancement of limit

The Reserve bank of India vide above noted circular liberalised overseas foreign currency borrowings, in order to greater flexibility to AD Category - I banks in seeking access to overseas funds. The banks, consequently, are now permitted to borrow from their Head Office, correspondents and overseas branches and overdrafts in nostro accounts up to a limit of 50 per cent of their unimpaired Tier I capital as at the close of the previous quarter or USD 10 million (or its equivalent), whichever is higher, as against the existing limit of 25 per cent.

A.P. (DIR Series) Circular No.22 Dated 14.10.2008 - Exim Bank's Line of Credit of USD 20 million to Myanma Foreign Trade Bank, Myanmar

An agreement making available a Line of Credit of USD 20 million to the Myanma Foreign Trade Bank, Myanmar has concluded between Exim bank and Myanma Foreign Trade Bank, Myanmar for financing eligible goods and services including consultancy services from India relating to setting up of an Aluminum Conductor Steel Reinforced (ACSR) wire manufacturing factory, with total annual output capacity of ACSR 10,000 tonnes and galvanized iron wire 4000 tonnes in the Myanmar. The Credit Agreement under the LOC is effective from September 19, 2008. The Credit Agreement under the LOC is effective from 19 September, 2008.

A.P. (DIR Series) Circular No.21 Dated 14.10.2008 - Exim Bank's Line of Credit of USD 64.07 million to Myanma Foreign Trade Bank, Myanmar

An agreement between Exim bank and Myanma Foreign Trade Bank, Myanmar has concluded, providing a Line of Credit (LOC) of USD 64.07 million for financing export of eligible goods and services including consultancy services from India relating to financing of three transmission lines namely Thahtay Chaung -Thandwe- Maei -Ann 230 KV; Thahtay Chaung -Oakshitpin 230KV; and Thandwe-Athoke 230 KV to be executed by Power Grid Corporation of India in Myanmar. The circular provides the goods and services included in consultancy services from India for exports under Agreement.

Circular No. DPSS.CO.No.619/02.23.02/ 2008-09 Dated 08.10.2008 - Mobile Banking transactions in India - Operative Guidelines for Banks

RBI has issued operating guidelines pertaining to Mobile Banking transactions in India under Payment and Settlement Systems Act, 2007, which shall be operational with immediate effect. With the rapid growth in users and wider coverage of mobile phone networks this medium have off-late turn out to be important platform for extending banking services to customers and in order to ensure a level playing field and considering that the technology is relatively new. For the purpose of these Guidelines, "mobile banking transactions" is undertaking banking transactions using mobile phones by bank customers that involve credit/debit to their accounts.

Circular No. DPSS.CO.No. 611 / 03.01.03(P)/2008-09 Dated 08.10.2008 - Levy of Service Charges for Electronic Payment Products and Outstation Cheque Collection

The Reserve Bank of India has prescribed framework of charges to be levied by banks for offering various electronic products and for outstation cheque collection service, which shall be applicable only to transactions originated and payable within India. The framework prescribed vide circular will not be applicable to cash handling charges levied by banks for handling large value cash transactions. Banks are directed to not to refuse to offer the products to its customers or decline to accept outstation cheques deposited by its customers for collection.

Circular No. FMD.MOAG. No. 27/01.01.01/2008-09 Dated 15.10.2008 - Special Fixed Rate Repo Under Liquidity Adjustment Facility

With the object of enabling banks to meet the liquidity requirements of mutual funds, Reserve Bank has announced and conducted a special fixed rate term repo at 9 per cent per annum against eligible securities for a notified amount of Rs.20, 000 crore on October 14, 2008. The special fixed rate term repo under liquidity adjustment facility is required to be conducted every day until further notice up to a cumulative amount of Rs 20,000 crore for the same purpose. Accordingly, the residual amount will be notified every day till further notice. This repo so fixed, will be in addition to the repo/reverse repo auctions conducted under Liquidity Adjustment Facility (LAF) and Second Liquidity Adjustment Facility (SLAF), which will be held as usual.

RBI DBOD Circular No.DBOD.No.BP.BC.57/21.04.157/2008-09 Dated 13.10.2008 -Prudential Norms for Off-balance Sheet Exposures of Banks

RBI advises banks, after having examine the issues regarding asset classification status of overdue payments in respect of derivative transactions and re-structuring of derivative contracts. Accordingly RBI instructions deal with the cases where a derivative contract is restructured and various provisions relating to Asset Classification.

• DIRECT TAXATION

CBDT Notification No. 97/2008 Dated 10.10.2008 - Income-Tax (Seventh Amendment) Rules, 2008

Central Board of Direct Taxes has amended the Income -tax Rules, 1962 vide Income -tax (7th Amendment) Rules, 2008, in exercise of the powers conferred under the Income -tax Act, 1961. The rule 6DD pertaining to the Cases and circumstances in which a payment or aggregate of payments exceeding twenty thousand rupees may be made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft is substituted in place of the previous provision relating to Cases and circumstances in which payment in a sum exceeding twenty thousand rupees may be made otherwise than by an account payee cheque drawn on a bank or account payee bank draft.6DD.

• INDIRECT TAXATION

Customs

CBEC Customs Circular No. 16/2008 Dated 13.10.2008 - Clarification on refund of 4% Additional Duty of Customs (4% CVD) in pursuance of Notification No.102/2007-Customs dated 14.09.2007 - regarding

CBEC issues clarification concerning the issues raised by the trade and industry associations relating to the Procedure to be followed while making refund of 4% Additional Duty of Customs (4% CVD). It is clarified that importers will be allowed to file 4% CVD claims upto a period of one year from the date of payment of duty and importers could submit the copy of invoices in electronic form (including the form of CD) for the purpose of fulfillment of the conditions prescribed in the related notification. The clarifications issued by the relating to Early processing of refund claims, Declaration for non-admission of Cenvat Credit, Payment of ST/VAT by cash or input tax credit, Submission of original copy of ST/VAT Challan, Unjust enrichment and its Certification by Chartered Accountants, Submission of refund claim for part of goods in a consignment etc.

• DIRECTORATE GENERAL OF FOREIGN TRADE

DGFT Policy Circular No. 35(RE-08)/2004-2009 Dated 10.10.2008 - Guidelines for import of Rough / unprocessed Blocks and Slabs of agglomerated / artificial stones for the year 2008-09

DGFT lays down eligibility and entitlement criteria in addition to the Guidelines for import of Rough / unprocessed Blocks and Slabs of agglomerated / artificial stones for the year 2008-09. The Circular prescribes 16th October, 2008 as the last date of receiving application and provides that all licences will be subject to actual user condition. The eligible applicants can file an application in the form given in 'Aayaat Niryaat Form' along with all relevant documents, to the concerned Regional Authority with a copy to DGFT.

DGFT Policy Circular No. 34(RE-08)/2004-2009 Dated 10.10.2008 - Guidelines for import of Rough/unprocessed Blocks and Slabs of agglomerated/artificial stones for the year 2008-09

DGFT lays down guidelines for import of Rough / unprocessed Blocks and Slabs of agglomerated / artificial stones for the year 2008-09. The guideline thus issued deals with the provisions pertaining to eligibility , entitlement of the applicant and clarifies that the eligible licences are subject to the floor price provided therein, which shall be endorsed on all licences.

• SECURITIES AND EXCHANGE BOARD OF INDIA

SEBI Derivatives Circular No. SEBI/DNPD/Cir-41/2008 Dated 15.10.2008 - Revised Exposure Margin for Exchange Traded Equity Derivatives

In order to ensure market safety and safeguard the interest of investors, SEBI has decided to enhance the exposure margin to higher of 10% or 1.5 times the standard deviation (of daily logarithmic returns of the stock price), in place of present exposure margin of 5% or 1.5 times the standard deviation of the notional value of the gross open position in single stock futures and gross short open position in stock options in a particular underlying. The enhanced Exposure Margin for Exchange Traded Equity Derivatives will come in to effect from the October 21, 2008.

SEBI FII Circular No. IMD/FII & C/33/2007 Dated 16.10.2008 - FII investments in Debt Securities

Government of India has enhanced the cumulative debt investment limit from US $3 billion to US $6 billion for FII investments in Corporate Debt, while reviewing the External Commercial Borrowing policy. The enhanced limit for investment in corporate debt shall be allocated among the FIIs on a 'first come first served' basis, subject to a ceiling of US $300 million per registered entity. The conditions pertaining to restrictions of 70:30 ratio of investment in equity and debt respectively provided by SEBI FII regulations, has been decided to do away with and necessary amendments to the FII Regulations will be carried out in due course.

SEBI FII Circular No. IMD/FII & C/32/2008 Dated 16.10.2008 - Dissemination of further information about FII activity

SEBI Provides the format for furnishing the information pertaining to securities lent by the FIIs to entities abroad. As For the purpose of dissemination of information about the position of securities lent abroad by Foreign Institutional Investors (FIIs) / sub accounts, the FIIs / sub accounts are required to submit information about the quantity of the securities which they have lent to entities other than in the Indian Securities Market, i.e. where the Overseas Derivative Instruments (ODIs) are issued- which has the effect of a short sale in the Indian security (including F&O) / synthetic shorts. The formats issued by the SEBI are relating to cash securities and derivatives positions