Reserve Bank of India

05.09.2019

Banking

Exim Bank's Government of India supported Line of Credit of USD 800 million to the Government of the Republic of Maldives

MANU/APDR/0030/2019

Export-Import Bank of India (Exim Bank) has entered into an agreement dated March 18, 2019 with the Government of the Republic of Maldives for making available to the latter, a Government of India supported Line of Credit (LoC) of USD 800 million (USD Eight Hundred million only) for the purpose of financing development projects in the Republic of Maldives. Under the arrangement, financing of export of eligible goods, works and services from India, as defined under the agreement, would be allowed subject to their being eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. Out of the total credit by Exim Bank under the agreement, goods, works and services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India and the remaining 25 per cent of goods and services may be procured by the seller for the purpose of the eligible contract from outside India.

The Agreement under the LoC is effective from August 20, 2019. Under the LOC, the terminal utilization period is 60 months after the scheduled completion date of the project. Shipments under the LoC shall be declared in Export Declaration Form as per instructions issued by the Reserve Bank from time to time. No agency commission is payable for export under the above LoC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners' Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category-I (AD Category-I) banks may allow such remittance after realization of full eligible value of export subject to compliance with the extant instructions for payment of agency commission.

Tags : Credit Republic Maldives Support

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Ministry of Finance 

05.09.2019

Customs

Eligibility Criteria for availing of DPD Scheme by Importers

MANU/CUCR/0029/2019

1. CBIC has taken various steps which have had the impact of reducing the dwell time as well as bringing down the logistics cost of EXIM clearances. One of the flagship initiatives in this regard has been the Direct Port Delivery (DPD) of containers to the importers thus obviating the need of routing the clearance through the Container Freight Stations (CFSs). The initiative was first launched at JNPT and thereafter extended to other ports. This one single reform alone has played a critical role in improving our ranking in the Doing Business Report 2019. Not surprising, therefore, has been the wide appreciation for this step amongst the importers and its acknowledgement by World Bank.

2. Although this initiative is in operation at all the ports, however, Board has felt the need for providing general guidelines/eligibility criteria so that reach of DPD could be made maximized. Importers who have so far not availed the benefit of DPD for reasons including lack of awareness, may now join this program with certainty.

3. Ideally, any fully facilitated Bill of Entry (BoE) filed at the gateway port ought to get the DPD benefit. However, feedback from the field has suggested that factors like non-receipt of original documents from abroad and consequent delay in issuance of Delivery Order, financial and credit woes, delay in settlement of dues of shipping lines, opening PD Account with the terminals are some of the reasons inhibiting a larger section of importers to opt for DPD. CBIC by promoting DPD has raised the bar of efficiency. It is, therefore, but natural that other players in the EXIM logistics chain get their act together so that this successful reform measure could be made even more widespread.

4. Taking all the factors into consideration, following guidelines are being prescribed for implementation of DPD across all the formations

(i) Inclusions: The following categories of importers may 555 opt for facility of DPD:

(a) importers who have already been accorded either AEO Tier I, II or III status;

(b) importers with a clear track record of compliance and an import volume of 25 Full Container Load (FCL) TEUs through a particular port or otherwise in the preceding financial year;

Importers falling under the said categories shall furnish information prescribed in application format i.e. Annexure-A (copy enclosed). While the criterion at (b) is desirable, Chief Commissioner may, however, in deserving cases of importers, relax the TEU benchmark. Such importers could be the ones whose imports have enjoyed a consistent pattern of customs risk facilitation/who provide an assurance that they would be in a position to pick up containers directly from the terminal. This dispensation may be particularly considered for the MSME sector.

(ii) Exclusions: The following categories of importers however would be excluded from facility of DPD:-

(a) importers against whom a case of mis-declaration of description of goods or of concealment/diversion of imported goods/evasion of duty has been made in the preceding five years;

(b) importers facing prosecution proceedings in a matter under the Customs Act, 1962;

(c) those importing goods that are subjected to 100% examination in terms of extant policy;

(d) importers importing mostly LCL consignments.

(iii) Conditions: The facility of DPD shall only be extended only to such consignments

(a) which have either been fully facilitated or not subjected to examination; and

(b) importers open a PD account with the terminals and arrange for their own transport to take delivery of containers from the terminal; and

(c) any other procedural formality prescribed by the zone for better administration of DPD scheme

Tags : Eligibility Criteria DPD Scheme Availment

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Press Information Bureau

03.09.2019

Insurance

ESIC Signs an Agreement with SBI for Payments To ESIC Beneficiaries on Real Time Basis

MANU/PIBU/1403/2019

A Memorandum of Agreement has been signed between the Employees' State Insurance Corporation (ESIC) and SBI today in accordance with which, the SBI would provide e-payment services directly to the bank accounts of all ESIC beneficiaries and payees without any manual intervention as an integrated and automated process. The SBI would provide e-payment integration with the Enterprise Resource Planning (ERP) processes of ESIC through its Cash Management Product (CMP) e-payment technology platform. The e-payment integration would effect statutory benefit payments to ESIC beneficiaries as well as other payees on real time basis, reducing time lags and delays and at the same time, help to eliminate mistakes and errors caused by repetitive and manual data entries. The new system will benefit all stakeholders of ESIC.

Tags : Agreement Payments ESIC Beneficiaries

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Press Information Bureau

03.09.2019

Banking

Cabinet approves Infusion of capital by Government in IDBI Bank

MANU/PIBU/1404/2019

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the Infusion of Rs. 4,557 crore by Government in IDBI Bank. It will help in completing the process of IDBI Bank's turnaround and enable it to return to profitability and normal lending, and giving Government the option of recovering its investment at an opportune time.

IDBI Bank needs a one time infusion of capital to complete the exercise of dealing with its legacy book. It has already substantially cleaned up, reducing net NPA from peak of 18.8% in June 2018 to 8% in June 2019. The capital for this has to come from its shareholders. LIC is at 51% and is not allowed to go higher by the insurance regulator. Of the Rs. 9,300 crore needed, LIC would meet 51% (Rs. 4,743 crore). Remaining 49%, amounting to Rs. 4,557 crore, is proposed from Government as its share on one time basis.

After this infusion, IDBI Bank expects to be able to subsequently raise further capital on its own and expects to come out of RBI's Prompt Corrective Action (PCA) framework sometime next year. This cash neutral infusion will be through recap bonds i.e. Government infusing capital into the bank and the bank buying the recap bond from the Government the same day, with no impact on liquidity or current year's Budget.

Tags : Infusion Capital Approval

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Reserve Bank of India

03.09.2019

Banking

RBI releases the Report of the Task Force on the Development of Secondary Market for Corporate Loans for comments

MANU/RPRL/0161/2019

The Reserve Bank of India had constituted a Task Force on Development of Secondary Market for Corporate Loans under the Chairmanship of Shri T. N. Manoharan, Chairman, Canara Bank, on May 29, 2019. The Terms of Reference of the Task Force were to review the existing state of market for loan sale/transfer in India as well as the international experience in loan trading and to make recommendations for the development of secondary market for corporate loans in India.

The Task Force has since submitted its report to the Governor. The key recommendations of the Task Force are for setting up of a Self-Regulatory Body of participants which will finalise detailed modalities for the secondary market for corporate loans including standardisation of documentation and setting up a Central Loan Contract Registry. To setting up an online loan sales platform to conduct auctions/sale process of the secondary market loans; amending the extant regulations applicable to, inter-alia, securitization and assignment of loans, asset reconstruction, Foreign Portfolio Investment and External Commercial Borrowings; and amendments in regulations issued by SEBI, IRDA and PFRDA to enable participation of non-banking entities such as mutual funds, insurance companies and pension funds.

Tags : Report Release Corporate Loans

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Ministry of Finance 

03.09.2019

Customs

Putting of mono-cartons on Bottled in Origin alcoholic beverages in both Public and Private bonded warehouses

MANU/CUCR/0028/2019

1. Representations have been received from the trade and industry seeking clarification on the issue of putting of mono-cartons on Bottled in Origin (BIO) alcoholic beverages in both Public and Private bonded warehouses. It has been informed that BIO alcoholic beverages are imported without a mono carton, in a shipper's carton, usually in sets of 12. To carry out statutory labelling, the goods have to be unpacked from the shipper's carton. Each bottle of BIO alcoholic beverages is labelled and then placed in a mono carton (the statutory labelling is done on the mono cartons as well), which is then put in another shipper's carton. Both the mono carton and the shipper's carton protect products from breakage during transit in Indian road conditions.

2. It has also been informed that in the past, there was a practice of allowing the activity of putting of the mono carton under Section 65 of the Customs Act by some field formations. Section 65 of the Customs Act allows for manufacture and other operations in a bonded warehouse. In the case under consideration, there is no resultant product, distinct from the BIO alcoholic beverages that arises due to putting of the mono-carton. Thus, the activity of putting a mono carton cannot be considered as processing and hence cannot be allowed under section 65 of the Customs Act. It is also not the policy intent to allow the extended warehousing benefits available under section 61 for units operating under section 65, for activities such as placement of mono-cartons over BIO alcoholic beverages.

3. Clause (b) of section 64 allows the owner of the warehoused goods to deal with the containers in such manner as may be necessary to prevent loss or deterioration or damage to the goods. Since the original shipper's carton in which the goods are imported has to be removed to comply with the statutory labelling requirements and thereafter, the goods have to be packed in the mono carton and an outer carton which enable safe transport, these activities are permissible in both public and private bonded warehouses under clause (b) of section 64 of the Customs Act.

Tags : Mono-cartons Putting of Warehouses

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Press Information Bureau

02.09.2019

Direct Taxation

CBDT consolidates Circulars for ease of compliance of Start-Ups

MANU/PIBU/1393/2019

In order to provide hassle-free tax environment to the Start-ups, a series of announcements have been made by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman in her General Budget Speech, 2019, and also on 23rd August 2019. To give effect to these announcements, the Central Board of Direct Taxes (CBDT) issued various circulars/clarifications in the matter from time to time. Vide Circular No.22/2019 dated 30.08.2019, CBDT has consolidated all the circulars/clarifications issued on this subject for the ease of compliance of Start-up entities. The present circular highlights the following:-

Simplification of process of assessment of Start-ups: Circular No. 16/2019 dated 7th of August, 2019 provided for the simplified procedure of assessment of Start-ups recognized by DPIIT. The circular covered cases under "limited scrutiny", cases where multiple issues including issue of section 56(2)(viib) were involved or cases where Form No.2 was not filed by the Start-up entity. Detailed process of obtaining mandatory approval of the supervisory authorities for conducting enquiry was also laid down by this circular.

Time limit for Completion of pending assessments of Start-ups: The time limit for completion of pending assessments was also specified by CBDT. All cases involving "limited scrutiny" were to be completed preferably by 30th September, 2019 and the other cases of Start-ups were to be disposed off on priority, preferably by 31st October, 2019.

Procedure for addition made u/s 56(2)(viib) in the past assessment: Vide clarification issued on 9th August, 2019 it was provided that the provisions of section 56(2)(viib) of the Act would also not be applicable in respect of assessment made before 19th February, 2019 if a recognised Start-up had filed declaration in Form No. 2. The timelines for disposal of appeals before CsIT (Appeals) was also specified. Further, the addition made under section 56(2)(viib) would also not be pressed in further appeal.

Income-tax demand: It has been reiterated time and again by CBDT that outstanding income-tax demand relating to additions made under section 56(2)(viib) would not be pursued and no communication in respect of outstanding demand would be made with the Start-up entity. Other income-tax demand of the Start-ups would not be pursued unless the demand was confirmed by ITAT.

Constitution of Start-up Cell: Vide order dated 30.08.2019, CBDT has constituted a Start-up Cell under the aegis of Member (IT&C), CBDT to redress grievances and to address various tax related issues in the cases of Start-ups. Grievances can also be filed online at startupcell.cbdt@gov.in.

Tags : Consolidation Circular Compliance Start-Ups

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Press Information Bureau

02.09.2019

Banking

Steering Committee on Fintech related issues submits its Final Report to Finance Minister

MANU/PIBU/1394/2019

The Steering Committee on Fintech related issues constituted by the Ministry of Finance, Department of Economic Affairs, today submitted its Final Report to Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman in her office in New Delhi.

The Committee was constituted in pursuance to the announcement made by the Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley in his Budget Speech 2018-19 (Para 75). The report outlines the current landscape in the Fintech space globally and in India, studies the various issues relating to its development and makes recommendations focusing on how Fintech can be leveraged to enhance financial inclusion of MSMEs with a view to making Fintech related regulations more flexible and generate enhanced entrepreneurship. The Committee report also identifies application areas and use cases in Governance and financial services and suggests regulatory upgrades enabling Fintech innovations.

The Committee has recommended that the RBI may consider development of a cash-flow based financing for MSMEs, development of an open-API MSME stack based on TReDS data validated by GSTN and a standardised and trusted e-invoice infrastructure designed around TREDS-GSTN integration.

It has also recommended that Insurance companies and lending agencies to be encouraged to use drone and remote sensing technology for crop area, damage and location assessments to support risk reduction in insurance/lending business.

Given the rapid pace at which technology is being adopted primarily by private sector financial services, the Committee recommends Department of Financial Services (DFS) to work with PSU banks to bring in more efficiency to their work and reduce fraud and security risks. Significant opportunities can be explored to increase the levels of automation using Artificial Intelligence (AI), cognitive analytics & machine learning in their back-end processes.

The Committee has highlighted the positive impact of Fintech innovations on sectors such as Agriculture and MSMEs. And it has recommended NABARD to take immediate steps to create a credit registry for farmers with special thrust for use of Fintech along with core banking solutions (CBS) by agri-financial institutions, included Cooperative societies.

The Committee recommends a special drive for modernisation and standardisation of land records by setting up a dedicated National Digital Land Records Mission based on a common National Land Records Standards with involvement of State Land and Registration departments, with a view to making available land ownership data on an online basis to Financial Institutions.

The Committee also recommends a comprehensive legal framework for consumer protection be put in place early keeping in mind the rise of Fintech and digital services.

It has also recommended adoption of Regulation technology (or RegTech) by all financial sector regulators to develop standards and facilitate adoption by financial sector service providers to adopt use-cases making compliance with regulations easier, quicker and effective. Similarly, it has also recommended that financial sector regulators develop an institutional framework for specific use-cases of Supervisory technology (or SupTech), testing, deployment, monitoring and evaluation.

Further, an Inter-Ministerial Steering Committee will be set up on fintech Applications in Department of Economic Affairs (DEA), Ministry of Finance, to continue to carry on the tasks of implementing this report, including exploring and suggesting the potential applications in government financial processes and applications, particularly accounting and asset management, welfare services, taxation, and handling citizen grievances. While the Inter-Regulatory Technical Group (IRTG) set up under the FSDC will be the forum of inter-regulatory coordination on Fintech.

Following the deliberations of the Committee it was considered necessary to have a nodal agency to coordinate developments across Ministries and Regulators in the area of Fintech. A dedicated team on Digital Economy & Fintech is being set up in the Investment Division, Department of Economic Affairs, Ministry of Finance for coordination on FinTech with relevant Ministries.

The Steering Committee, which submitted the report, is headed by Secretary, Department of Economic Affairs. The other members of the committee are Secretary (MeitY); Secretary (DFS); Secretary (MSME); Chairperson (CBIC); CEO (UIDAI); Deputy Governor (RBI); Executive Director (SEBI); CEO, Invest India with Additional Secretary (Investment), DEA as the convener of the panel

Tags : Steering Committee Final Report Submission

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