• RESERVE BANK OF INDIA

A. P. (DIR Series) Circular No. 16 Dated 22.09.2008- External Commercial Borrowings Policy - Liberalisation

External Commercial Borrowing (ECB) has been reviewed by the Reserve Bank of India in consultation with Government to keep it in tune with the evolving macroeconomic situation, changing market conditions, sectoral requirements, etc. The existing limit of USD 100 million has been enhanced to USD 500 million per year for the borrowers in the infrastructure sector under the Approval Route after considering the huge funding requirements. Borrowings in excess of USD 100 million should have a minimum average maturity of 7 years.

In order to widen up the credit spreads in the International financial markets, all-in-cost ceilings in respect of ECBs with minimum average maturity of over seven years has been modified. As regards companies other than those in infrastructure sector the decision of May 2008, to allow them to borrow up to USD 50 million for Rupee Capital expenditure under the Approval route, remains unchanged.

A.P. (DIR Series) Circular No.17 Dated 23.09.2008 - 'Issue of Foreign Currency Exchangeable Bonds Scheme, 2008'

Reserve Bank of India has decided to operationalise the Issue of Foreign Currency Exchangeable Bonds Scheme, 2008 in order to facilitate the issue of FCEB by Indian companies. The said scheme was notified by the Government of India, Ministry of Finance, Department of Economic Affairs and it deals with the provision relating to issuance and subscription of Foreign Currency Exchangeable Bond, End-use requirements, Operational Procedure, Pricing and Maturity etc. This Scheme will come into force with immediate effect.

A.P. (DIR Series) Circular No. 18 Dated 26.09.2008 - Deferred Payment Protocols Dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR

Reserve Bank of India has issued Directions to the AD Category - I banks that the rupee value of the special currency basket has been fixed at Rs. 63.018 08, as a consequence of the revision taken place on September 12, 2008.  The revised rates will be effective from September 17, 2008.

A.P. (DIR Series) Circular No. 19 Dated 26.09.2008 - Exim Bank's Line Of Credit Of Usd 20 Million to Government of The Republic Of Mozambique

An Agreement dated 15th May , 2008 has been concluded between Export-Import Bank of India and Government of the Republic of Mozambique providing for a Line of Credit (LOC) of USD 20 million (USD Twenty million), for financing eligible goods and services including consultancy services from India relating to transfer of water drilling technology and equipment from India to Mozambique. The goods and services included under this Agreement are those which are 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.

The Credit Agreement under the LOC is effective from August 26, 2008 and last date for opening of Letters of Credit and disburseme will be 48 months from the scheduled completion date of contract ,in case of project exports and 72 months (May 14, 2014) from the execution date of the Credit Agreement in case of supply contracts. Directions regarding agency commission are also contained in the circular.

RBI DBOD Circular No. DBOD.No.BP.BC. 48 /21.04.048/2008-09 Dated 22.09.2008 - Prudential Norms on utilization of Floating Provisions - Agricultural Debt Waiver and Debt Relief Scheme, 2008

Agricultural Debt Waiver and Debt Relief Scheme provides that lending institutions should neither claim from the Central Government, nor recover from the farmer, interest in excess of the principal amount, unapplied interest, penal interest, legal charges, inspection charges and miscellaneous charges, etc. As result of it all such interest / charges will be borne by the lending institutions. Reserve bank of India has decided to allow the banks to utilize the Floating Provisions held for 'advances' portfolio, only to the extent of meeting such interest /charges and this discreation should be sanctioned by RBI's prior approval.

RBI DNBS Circular No. DNBS.PD/ CC.No.130 / 03.05.002 /2008-09- Dated 24.09.2008 -Monitoring Framework for non-deposit taking NBFCs

Reserve bank of India has decided to call for the basic information from non-deposit taking NBFCs with asset size of Rs 50 crore and above but less than Rs 100 crore at quarterly intervals and returns for the quarter ended September 2008 may be submitted by first week of December 2008. At the end of each quarter , these quarterly return could be filed online with the Regional Office of the Department of Non-Banking Supervision in whose jurisdiction company is registered.

RBI DNBS Circular No. DNBS (PD) CC No. 129/03. 02.82/ 2008-09 Dated 23.09.2008-"Non-Banking Financial Companies Auditor's Report (Reserve Bank) Directions, 2008"

Reserve bank of India has issued Non-Banking Financial Companies Auditor's Report (Reserve Bank) Directions, 2008 in supersession of the Non-Banking Financial Companies Auditor's Report (Reserve Bank) Directions, 1998 for the purpose of proper assessment of books of accounts of NBFCs. These Directions direction applies to the every auditor of a non-banking financial company in the Reserve Bank of India Act and Direction deals with the provisions relating to additional Report to be submitted to the Board of Directors by Auditors and its content. At the same time it imposes Obligation on auditor to submit an exception report to the Bank. These directions will come into force with immediate effect.

RBI UBD Circular No. UBD.BPD (PCB) Cir No: 18 /13.04.00/2008-09 Dated 22.09.2008-Revival of the Interest -tax Act 1974-Collection from borrowers

It has been ordered by the Supreme Court vide its judgment that interest rate collected by the banks in excess from the borrowers through rounding off the applicable interest rate should be recovered from the banks and be credited to a Trust created for the benefit of disadvantaged people. At the same court has directed each bank to contribute to the extent of Rs.50 lakh to the Fund. Consequently, UCBs are advised to deposit the excess amount realized by the them with the Trust fund referred in the judgment.

RBI DNBS Circular No. DNBS (PD) CC. No. 12 / SCRC / 10.30.000/ 2008-2009 Dated 26.09.2008 -Quarterly Statement to be submitted by Securitisation Companies/Reconstruction Companies registered with the Reserve Bank of India under Section 3(4) of the SARFAESI Act

Reserve Bank of India has revised the formats of quarterly statements SCRC 1 and SCRC 2 to be submitted by Securitisation Companies/Reconstruction Companies registered with the Bank. These statements are required submitted within 15 days of the close of the quarter to which it pertains and first statement in revised format should be forwarded for the quarter ending December 31, 2008.

• DIRECT TAXATION

CBDT Circular No. 8/2008 Dated 22.09.2008 -Compulsory Filing of E-Return of Income for Assessment Year 2008-09 - Furnishing of Return By Representative Assessee of Non-Residents

It has been decided by the CBDT that it will not be mandatory for agents of non-residents to electronically furnish the returns of non-residents for assessment year 2008-09. In order to resolve the difficulty faced by the agents of non-residents in electronically furnishing the returns of non-residents because of the reason that a person in India may be an agent of more than one non-resident or there may be more than one agent for a non-resident in India for different transactions and existing software functions on the principle of one assessee - one PAN - one return and does not cover such situation.

• TELECOM REGULATORY AUTHORITY OF INDIA

Press Release No. 78/2008 Dated 23.09.2008- TRAI invites Consultation on Media Ownership

Telecom Regulatory Authority of India has released Consultation paper on Media Ownership. The intention behind releasing this paper is to provide for competition, diversity and plurality of players, news and views. Issues covered by the Consultation paper are basically relating to Cross media ownership across different segments of media such as print/ television/ radio (horizontal integration) and Cross holding restrictions to prevent consolidation including 'vertical integration' within a media segment such as television or radio.It gives a picture of the Indian media Market giving the present scenario in the various sectors such as Television, Radio and Print media, the extant policies and relevant recommendations.

• INDIRECT TAXATION

Customs

Custom Circular No. 15 Dated 26.09.2008 -Authentication of supply invoice by the Central Excise Authorities for Claiming Deemed export benefits- reg.

The Hand Book of Procedures (HBP) Vol.1 (Appendices and Aayat Niryat Forms stipulates that application for Deemed Exports benefits shall be accompanied with a copy of the invoice or a statement of the invoices duly signed by the unit receiving the material and their jurisdictional Central Excise Authorities certifying the item of supply, its quantity, value and date of such supply and it has been further provided that endorsement by Central Excise Authority shall exceed 21 days from the date of delivery of such supply. Circular prescribes the guidelines regarding authentication of supply invoices by the jurisdictional Central Excise Authorities depending upon the registration of recipient unit.

Custom Circular No. 14/2008 Dated 26.09.2008- Issue of installation certificate for the capital goods imported/ procured locally under EPCG scheme- procedure- reg

The Hand Book of Procedures (HBP) (Vol-I), [RE- 2008-09] provides for production of a certificate from the jurisdictional Central Excise Authority confirming installation of capital goods at factory premises of Authorisation holder or his supporting manufacturer(s) /vendor (s) within six months from the date of completion of imports under EPCG Scheme. Circular lays down the guideline prescribing procedure of issuance of aforesaid certificate. The Jurisdictional Central Excise officers are suppose to issue certificate only where the capital goods are installed is registered with the Central Excise Authorities and in case of unit not registered, the Authorization holder is required to produce to the concerned Regional Licensing Authority, a certificate from an independent Chartered Engineer confirming the installation of capital goods.

The authorisation holder seeking such a certificate are required to obtain a dated acknowledgement after intimating the fact of installation of the capital goods imported under EPCG scheme to the jurisdictional Superintendent of Central Excise and details of capital goods installed in the factory with the details on the EPCG authorisation is to be verified by the Superintendent of Central Excise, apart from verifying the description installation of the goods may also be verified, any discrepancy during the verification is required to intimated to the the Assistant Commissioner / Deputy Commissioner of the Central Excise division.

Customs Non-Tariff

CBEC Customs Non-Tariff Notification No. 109/2008 -Customs(N.T.) Dated 24.09.2008- Amendment in the First Schedule to the Customs Tariff Act, 1975

Central government amends First Schedule to the Customs Tariff Act, 1975, in exercise of the power conferred under the Act.

Excise Non-Tariff

CBEC Excise Non-Tariff Notification No. 35/2008-N.T. Dated 24.09.2008- CENVAT Credit (Amendment ) Rules, 2008

Central government amends CENVAT Credit Rules, 2004 vide CENVAT Credit (Amendment ) Rules, 2008, inserting proviso to the provision dealing with the availability of the CENVAT Credit to the manufacturer or producer of final products or a provider of taxable service on additional duty of excise leviable 

• SECURITIES AND EXCHANGE BOARD OF INDIA

SEBI PMD Circular No. SEBI/CFD/DIL/2008/ 25 /09 Date 25.09.2008- Applications Supported by Blocked Amount (ASBA) facility in Rights Issues

SEBI has decided to enable process of "Applications Supported by Blocked Amount" (ASBA) in Rights Issues on a pilot basis. This facility will be available to all shareholders of the issuer company as on the record date subject to qualifications provided thereon. It will co-exist with the current process, wherein cheque/demand draft is used as a mode of payment.

It has been advised to all Merchant Bankers, Registrars and Self Certified Syndicate Banks (SCSBs) to provide the ASBA facility in rights issues with suitable modifications to ASBA process specified by SEBI for public issue through book building route. Circular prescribes the features of ASBA process in rights issue in detail.