RBI removes ceiling rate on export credit in foreign currency

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BI/2011-12/534
DBOD.DIR.No.100/04.02.001/2011-12

May 4, 2012

All Scheduled Commercial Banks
(Excluding RRBs)

Dear Sir / Madam,

Deregulation of Interest Rates on Export Credit in Foreign Currency

Please refer to our circulars DBOD. DIR. No. 52/04.02.001/2011-12 dated November 15, 2011 and DBOD. DIR. No. 91/04.02.001/2011-12 dated March 30, 2012 relating to interest rates on export credit in foreign currency.

2. With a view to increasing the availability of funds to exporters, it has been decided to allow banks to determine their interest rates on export credit in foreign currency with effect from May 5, 2012.

3. A directive DBOD.DIR.No.99/04.02.001/2011-12 dated May 4, 2012, issued in this regard is enclosed.

Priority Sector Lending-Indirect Finance to Housing Sector – Increase in Limit to 10 lakh

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RBI/2011-12/527
 RPCD.CO RRB. BC.NO.74 /03.05.33/2011-12

April 27, 2012

The Chairmen
 All Regional Rural Banks (RRBs)

Dear Sir,

Priority Sector Lending-Indirect Finance to Housing Sector

Please refer to paragraph 7.4 of our circular RPCD.No. RRB.BC.20/03.05.33/2007-08 dated August 22, 2007 on lending to priority sector.

2. Pursuant to the announcement made by Union Finance Minister in the Union Budget for the year 2012-13, it has been decided to increase the limit from Rs.5 lakh to Rs.10 lakh for the bank loans extended to non-governmental agencies, approved by NHB for their refinance, for on-lending for the purpose of construction/reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers.

3. The revised limit is applicable to the bank loans sanctioned from the date of this circular.

Guidelines on Implementation of Basel III Capital Regulations in India

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㈸ Ᏸ 2011-12/530
 DBOD.No.BP.BC.98 /21.06.201/2011-12

May 2, 2012

The Chairman and Managing Directors/Chief Executives Officers of All Scheduled Commercial Banks (Excluding Local Area Banks and Regional Rural Banks)

Madam / Dear Sir,

Guidelines on Implementation of Basel III Capital Regulations in India

Please refer to the paragraph 90 (extract enclosed) of the Monetary Policy Statement 2012-13 announced on April 17, 2012. It was indicated that the final guidelines on the implementation of Basel III capital regulations would be issued by end – April 2012. It may be recalled that draft proposals on Basel III capital regulations were issued vide circular DBOD.No.BP.BC.71/ 21.06.201/ 2011-12 dated December 30, 2011.

2. The final guidelines on Basel III capital regulations are enclosed. These guidelines would become effective from January 1, 2013 in a phased manner. The Basel III capital ratios will be fully implemented as on March 31, 2018.

3. The capital requirements for the implementation of Basel III guidelines may be lower during the initial periods and higher during the later years. While undertaking the capital planning exercise, banks should keep this in view.

4. RBI is currently working on operational aspects of implementation of the Countercyclical Capital Buffer. Guidance to banks on this will be issued in due course. Besides, certain other proposals viz. ‘Definition of Capital Disclosure Requirements’, ‘Capitalisation of Bank Exposures to Central Counterparties’ etc., are also engaging the attention of the Basel Committee at present. Therefore, the final proposals of the Basel Committee on these aspects will be considered for implementation, to the extent applicable, in future.

5. For the financial year ending March 31, 2013, banks will have to disclose the capital ratios computed under the existing guidelines (Basel II) on capital adequacy as well as those computed under the Basel III capital adequacy framework.

Display of Citizens Charter in all buildings of Income Tax Department

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The Results Framework Document (RFD) for the Income Tax Department for the financial year 2012-13 under the objectives “Communication with Taxpayers” includes one of the action point “Display of Citizen’s Charter in all the buildings of the Department”.

Intra-bank Deposit Accounts Portability

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RBI/2011-12/528
 DBOD.AML. BC. No. 97/14.01.001/2011-12

April 27, 2012

The Chairmen/Chief Executive Officers,
 All Scheduled Commercial Banks (excluding RRBs)/Local Area Banks

Dear Sir,

Intra-bank Deposit Accounts Portability

It has been brought to our notice that some banks are insisting on opening of fresh accounts by customers when customers approach them for transferring their account from one branch of the bank to another branch of the same bank. Such insistence on opening of fresh account or making the customer undergo full KYC process again causes inconvenience to them resulting in poor customer service. It is not reasonable in view of the fact that most bank branches are now on CBS and KYC records of a particular customer can be accessed by any branch of the bank.

2. Banks are advised that KYC once done by one branch of the bank should be valid for transfer of the account within the bank as long as full KYC has been done for the concerned account. The customer should be allowed to transfer his account from one branch to another branch without restrictions. In order to comply with KYC requirements of correct address of the person, fresh address proof may be obtained from him/her upon such transfer by the transferee branch. It may be noted that instructions regarding periodical updation of KYC data in terms of para 2.4(e) and those on maintenance of records of identity and transaction in terms of para 2.21(iii) of our Master circular DBOD.AML.BC. No.2/14.01.001/ 2009-10 dated July 01, 2011 remain unchanged and banks will be required to carry out the updation at prescribed intervals as also maintain records of transactions and verification of identity as prescribed.

General Circular No. 7/2012- Name Availability Guidelines, 2011

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General Circular No. 7/2012

No.17/90/2011-CL-V

Dated:25 April 2012

Sub: Name Availability Guidelines, 2011

Sir,

Please refer to this Ministry’s earlier Circulars no.45/2011 dated 08.07.2011 and 48/2011 dated 22.07.2011 on the subject cited above. In this regard, I am directed to say that matter regarding availability of name by the system online without backend process by the Registrar of Companies (ROC) on certification given by practising professionals in the manner provided at Para 3 of the Circular no.45/2011 dated 08.07.2011 has been re-examined in this Ministry and it has been decided as under:-

(i) The facility of name approval through STP mode on certification by professional will continue to be available. However, such names will be put to online check by the system for ascertaining similarity with trademarks. If there is similarity of proposed name with any existing trademark, the work item will be transferred for processing in non¬STP mode.

(ii) All the names applications submitted in STP mode will be put for system check and if there is exact match of any of the two words (other than the words private limited/limited) proposed in new company’s name with any existing company’s name, then such name will also be processed in non-STP mode.

(iii) All the names approved in STP mode will be made available on the dash board of the concerned ROC for immediate examination. Such STP approved names will not be available for filing of incorporation documents up to:-

(a) 1900 hrs. of the same day, if the name through STP mode is approved by the system upto 1100 hrs. on any working day.

(b) 1900 hrs. of the any next working day if the name is approved after 1100 hrs. on any working day or on holiday/non-working day.

(iv) Name approval application in case of single word (other than words private limited/limied) shall not be processed in STP mode.

2. This circular shall be implemented w.e.f 20.05.2012

3. All RDs/ROCs should take note of this circular and ensure its compliance, and discrepancies, if any, should be brought to the notice of this Ministry immediately.

Difference between Finance Lease & Operational Lease – Delhi HC

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HIGH COURT OF DELHI

INCOME TAX APPEAL NO. 442/2007

Date of Decision: 17th April, 2012

COMMISSIONER OF INCOME TAX DELHI-VI

VERSUS

THE INSTALMENT SUPPLY LIMITED

The appellants are carrying on the business of financiers: they are not dealing in motor-vehicles. The motor-vehicle purchased by the customer is registered in the name of the customer and remains at all material times so registered in his name. In the letter taken from the customer under which the latter agrees to keep the vehicle insured, it is expressly recited that the vehicle has been given as security for the loan advanced by the appellants. As a security for repayment of the loan, the customer executes a promissory-note for the amount paid by the appellants to the dealer of the vehicle. The so-called “sale letter” is a formal document which is not made effective by registering the vehicle in the name of the appellants and even the insurance of the vehicle has to be effected as if the customer is the owner. Their right to seize the vehicle is merely a licence to ensure compliance with the terms of the hire-purchase agreement. The customer remains qua the world at large the owner and remains in possession, and on condition of performing the covenants has a right to continue to remain in possession. The right of the appellants may be extinguished by payment of the amount due to them under the terms of the hire-purchase agreement even before the dates fixed for payment. The agreement undoubtedly contains several onerous covenants, but they are all intended to secure to the appellants recovery of the amount advanced. We are accordingly of the view that the intention of the appellants in obtaining the hire-purchase and the allied agreements was to secure the return of loans advanced to their customers, and no real sale of the vehicle was intended by the customer to the appellants. The transactions were merely financing transactions.

In view of the aforesaid position, we feel that the matter has not been examined and considered by the tribunal from the right perspective, the real issue and controversy has not been examined. The tribunal has not considered the legal position to reach its conclusion. In these circumstances, we answer this substantial question of law mentioned above in negative, i.e., in favour of the Revenue and against the assessee. An order of remand is passed directing the tribunal to examine the controversy a fresh in the light of what has been stated above and without being influenced by the earlier order. The appeal is disposed of. In the facts of the case, there will be no order as to costs.