Securities and Exchange Board of India

31.07.2024

Capital Market

SEBI clarifies on reports regarding T+0 settlement cycle

MANU/SPRL/0014/2024

At an NSE event on July 30, 2024 the SEBI Chairperson released a report on "Indian Capital Markets: Transformative shifts achieved through technology and reforms". The Report referred to potential annual benefit of Rs. 2,800 crore if ASBA for secondary market were to be adopted fully by retail investors.

In this context, a question was posed to the SEBI Chairperson on the ASBA facility being optional due to which retail investors still do not have access to this facility despite such significant potential savings. To this question, the SEBI Chairperson replied that, to begin with, perhaps SEBI might take a proposal to its Board to make it mandatory for the Qualified Stock Brokers to offer ASBA as an option to their clients. The Chairperson emphasised that the option as to whether to use ASBA for their trading shall still remain with the clients.

This has been erroneously reported in a section of the press as "SEBI bats for making T+0 system mandatory for all".

Tags : Reports T+0 settlement cycle secondary market

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Ministry of Commerce and Industry

02.08.2024

Customs

Harmonisation of Chapters 40 to 98 of Schedule-II (Export Policy) to ITC(HS) codes

MANU/DGFT/0110/2024

1. DGFT is in the process of harmonising the extant Schedule-II (Export Policy) to the 8-digit ITC(HS) codes, in lieu of the description-based Export Policy, as ITC(HS) Code mapped Export Policy has become a pre-requisite to streamline the process of Export Control and Facilitation, and also provide greater clarity and easy reference to Export Policy for all stakeholders.

2. Earlier, this Directorate vide Notification No. 60/2023 dated 13.02.2024 had notified the ITC(HS)-based Schedule-II (Export Policy) for Chapters 01 to 39. In continuation to the said Notification, the draft Schedule-II (Export Policy) of ITC(HS) 2022 aligning the 8-digit ITC(HS) codes for the remaining Chapters 40 to 98 has also been attempted.

3. It may be noted that this is a concordance of the existing description-based Export Policy to ITC(HS) Codes and there are no substantive Export Policy amendments being proposed herewith. Any comments in this regard may be provided latest by 11.08.2024 vide email to export-dgft@nic.in Subsequent to the said period and subject to comments (if any), Chapters 40 to 98 of Schedule-II (Export Policy) shall accordingly be re-notified.

4. This is issued with the approval of the Competent Authority.

Tags : Harmonisation Export Policy ITC(HS) codes

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Reserve Bank of India

02.08.2024

Banking

Prudential Treatment of Bad and Doubtful Debt Reserve by Co-operative Banks

MANU/RMIC/0095/2024

1. Under the provisions of the respective State Co-operative Societies Acts, or otherwise, on prudential consideration, several co-operative banks have created Bad and Doubtful Debt Reserve (BDDR)1. While in some cases, BDDR is created by recognising an expense in the Profit and Loss (P&L) Account, in other cases it is created through appropriations from net profits.

2. In terms of Accounting Standard (AS) 52, all expenses which are recognised in a period should be included in the determination of net profit or loss for the period. Consequently, not recognising the required provisions for Non-Performing Assets (NPAs) as an expense while arriving at the net profit in the P&L Account is not in consonance with extant Accounting Standards. Further, the treatment of BDDR for regulatory capital and reckoning of net NPAs varies across banks and in many cases has been observed to be at variance with regulatory norms.

3. Accordingly, with a view to bringing about uniformity in the treatment of BDDR for prudential purposes, revised instructions on BDDR are being issued, as under:

a) With effect from the FY 2024-25, all provisions as per Income Recognition, Asset Classification and Provisioning (IRACP) norms3, whether accounted for under the head "BDDR" or any other head of account, shall be charged as an expense to the P&L account in the accounting period in which they are recognised. The eligibility of such provisions for regulatory capital purposes shall continue to be as defined in the extant guidelines on capital adequacy.

b) After charging all applicable provisions as per IRACP norms and other extant regulations to the P&L Account, banks may make any appropriations of net profits below the line to BDDR, if required as per the applicable statutes or otherwise.

c) As a one-time measure, with a view to facilitate rectification and smoother transition to an AS compliant approach, the following regulatory treatment is prescribed:

(i) Previously, banks may have created provisions required as per IRACP norms by appropriating from the net profit rather than recognizing the same as an expense in the P&L account. The balances in BDDR as on March 31, 2024, representing such provisions as per IRACP norms (that have been created by directly appropriating from net profits instead of recognising as an expense in the P&L Account) in the previous years (hereafter referred to as 'BDDR2024') shall be identified and quantified.

(ii) As at March 31, 2025, to the extent of BDDR2024, an appropriation shall be made directly (i.e. 'below the line') from the P&L Account or General Reserves to provisions for NPA (i.e. liability). Such provisions shall be permitted to be netted off from GNPAs to arrive at NNPAs.

(iii) To the extent the balances in BDDR are not required as per applicable statute, the same can also be transferred to General Reserves/Balance in P&L Account below the line.

(iv) After passing the above entries, the balances in the BDDR can be reckoned as Tier 1 capital. However, balance in the BDDR shall not be reduced from Gross NPAs to arrive at Net NPAs.

4. Banks should comply with the provisions of the respective State Co-operative Societies Acts / Multi-State Co-operative Societies Act, 2002 as applicable.

Applicability

5. This circular is applicable to all Primary (Urban) Co-operative Banks, State Co- operative Banks and Central Co-operative Banks. The instructions are applicable with immediate effect.

Tags : Prudential Treatment Doubtful Debt Reserve Co-operative Banks

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Press Information Bureau

02.08.2024

Media and Communication

TRAI releases revised Standards of Quality of Service for Access and Broadband Services

MANU/PIBU/0600/2024

Telecom Regulatory Authority of India (TRAI) releases revised Regulations namely 'The Standards of Quality of Service of Access (Wirelines and Wireless) and Broadband (Wireline and Wireless) Service Regulations, 2024 (06 of 2024)'. These Regulations are applicable for Access (Fixed and Mobile) and Broadband services. The full text of the Regulations is available on TRAI's website at www.trai.gov.in.

TRAI had earlier issued three different regulations prescribing standards of Quality of Service (QoS), for Basic and Cellular Mobile Services, Broadband Services, and Broadband Wireless Services, namely (i) The Standards of Quality of Service of Basic Telephone Service (Wireline) and Cellular Mobile Telephone Service Regulations, 2009 (ii) Quality of Service of Broadband Service Regulations 2006 and (iii) The Standards of Quality of Service for Wireless Data Services Regulations 2012, amended from time to time.

The new Regulations shall supersede above referred three regulations. The above three regulations were notified more than a decade ago. Since then, the technology landscape of telecom networks has completely changed and moved towards converged networks. To account for the quality aspects arising out of large-scale penetration of new & emerging technologies such as 4G & 5G and high-speed broadband services on fiber, the Authority decided to carry out an extensive review of the existing regulations and put forward a comprehensive regulatory framework which encompasses QoS benchmarks for all three services at one place. The QoS standards set will achieve the delivery of high-Quality Service to consumers.

The revised regulations have been finalized after following a detailed consultative process through a Consultation Paper on 'Review of Quality-of-Service Standards for Access Services (Wireless and Wireline) and Broadband (Wireless and Wireline) Services' issued on 18th August 2023 inviting comments from the stakeholders. An Open House Discussion (OHD) was held with the stakeholders on 9th April 2024 where in representatives from stakeholders and consumer forums shared their views on different provisions of the Regulations.

The salient features of the regulations include following:

i. Mandating service providers to display technology (2G/3G/4G/5G) wise mobile coverage maps on their website, to enable consumers to make informed decisions.

ii. To bring transparency in QoS performance reporting, the service providers have been mandated to publish QoS performance, against prescribed parameters, on their website.

iii. Considering the performance requirement of new emerging applications, the benchmark for Latency parameter has been aligned with global standards and new parameters for Jitter and Packet drop rate have been introduced.

iv. To enable timely redressal of network issues by the service providers, QoS performance of mobile service shall now be monitored on monthly instead of quarterly basis. However, for smooth transition to monthly reporting, service providers have been given six months' time from the effective date of the regulation.

v. To have insight of performance at granular level, the Authority has decided to collect performance against certain parameters like network availability, call drop, voice packet drop rate in uplink and downlink, etc on Cell level.

vi. To achieve adoption of uniform methodology by different service providers while measuring and reporting the performance, a detailed and unambiguous measurement methodology has been prescribed in the regulation.

vii. The Authority has decided to tighten the benchmarks for some key parameters like network availability (cumulative downtime and worst affected Cells due to downtime), call drop rate, packet drop rate, latency etc. in a graded manner over a time frame of six months to two and half years to enable service providers to upgrade their networks, wherever needed.

viii. As averaging on QoS parameter performance in certain cases does not clearly bring out problem areas, the measurement methodology for some key parameters like Downlink and Uplink Packet Drop Rate, Latency, Point of Interconnection (PoI) Congestion, Download and upload speed, Maximum Bandwidth utilization between radio and core network during busy hour etc. has been changed from average to percentile basis. This will enable identification of pockets of degraded QoS performance for corrective action by service providers.

ix. In addition to requirement for display of mobile coverage map, new parameters like reporting of significant network outages, jitter, maximum bandwidth utilization between radio and core network during busy hour and SMS delivery success rate etc. have been introduced.

x. QoS parameters have been rationalized further, based on the impact on consumer experience and relevance in the present context, as against global benchmarks. For example, parameters like Shifting of Telephone Connections, Grade of Service for Local Exchange, etc have been deleted and few parameters have been shifted from compliance to monitoring by the service providers.

xi. With the simplification and objectivity in the QoS performance measurement criteria and smooth compliance, the service providers have been mandated to upgrade their system for online monitoring and reporting of QoS performance.

xii. Delivering QoS is a lifecycle activity that can only be achieved through the adoption of best practices in the quality management domain. Therefore, Service providers have been asked to adopt Six Sigma Quality Management Plan to achieve continuous improvement in the quality of services.

xiii. In order to achieve time bound action on QoS related issues and early resolution of non-compliant QoS performance in the network, graded financial disincentives, increasing with continued non-compliance, have been introduced for all services.

The regulations shall come into force with effect from 1st October 2024.

Tags : Revised Standards Quality Broadband Services

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Press Information Bureau

01.08.2024

Goods and Services Tax

GST collections and other relevant data will henceforth be available on the GST Portal

MANU/PIBU/0593/2024

The monthly data regarding the Goods and Services Tax (GST) collections (gross and net) and IGST settlement state wise for the month of July, 2024 has been placed in public domain on the GST website at https://www.gst.gov.in under 'News and Updates' section. Further, henceforth GST collections data shall be made available on the said website.

Moreover, data for the CGST, SGST, IGST and Cess, and state wise data on collection and return submission with historical time-series details are also being regularly updated from 2017 under 'GST Statistics' in the 'Downloads' section of the said website.

Tags : GST collectionsData GST Portal

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Securities and Exchange Board of India

01.08.2024

Capital Market

Amendment to Circular for mandating additional disclosures by FPIs that fulfil certain objective criteria

MANU/SMIS/0027/2024

1. SEBI vide Circular No. SEBI/ HO/ AFD/ AFD-PoD-2/CIR/P/2023/148 dated August 24, 2023 mandated additional disclosures for FPIs that fulfil objective criteria as specified in the said Circular. Further, FPIs satisfying any of the criteria listed under Para 8 of the said Circular were exempted from the additional disclosure requirements, subject to conditions specified in the said Circular. The said circular has been subsumed subsequently in the Master Circular for Foreign Portfolio Investors, Designated Depository Participants and Eligible Foreign Investors ("FPI Master Circular") dated May 30, 2024.

2. In this regard, it has been decided that University Funds and University related Endowments shall not be required to make the additional disclosures as specified in Para 1(xiii) of Part C of the FPI Master Circular, subject to compliance with certain conditions. In view of the above, the FPI Master Circular stands modified as follows:

2.1. After clause (g) of Para 1(xiv) of Part C, the following shall be inserted:

"(h) University Funds and University related Endowments, registered or eligible to be registered as Category I FPI, subject to them fulfilling the following additional conditions:

i. Indian equity AUM being less than 25% of global AUM

ii. Global AUM being more than INR 10,000 crore equivalent

iii. Appropriate return/filing to the respective tax authorities in their home jurisdiction to evidence the nature of a non-profit organisation exempt from tax."

3. The eligible jurisdictions with respect to the exemption granted to University Funds and University related Endowments shall be as specified by SEBI from time to time, in consultation with the pilot Custodians and DDPs Standards Setting Forum, through the Standard Operating Procedure framed in terms of Para 1(xii) of Part C of the FPI Master Circular.

4. The provisions of this circular shall come into force with immediate effect.

5. This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulations 22(1), 22(6), 22(7) and 44 of SEBI (FPI) Regulations, 2019 to protect the interest of investors in securities and to promote the development of, and to regulate the securities market.

Tags : Amendment Additional disclosures FPIs

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