Derivatives

Circular No. CIR/DNPD/01/2011 Dated 03.01.2011 - Instructions to stock exchanges regarding modifications to client code post trade execution

Stock Exchanges can permit modifications to client code post trade execution only in case of genuine error or wrong data entry made by trading members. This facility has been provided for the smooth functioning of the system and is expected to be used more as an exception rather than routine. Accordingly, Stock Exchanges are advised to:

• Set objective parameters for identification of client code modifications arising as a result of genuine error or wrong data entry. These objective parameters should be approved by the Governing Board of the Exchange and disclosed to the trading members.

• Impose monetary penalty in addition to disciplinary action against members who do not meet the laid down objective parameters.  Include verification of client code modification as a reporting item in internal audit report of the trading members.

The circular shall come into force from the date of the circular. 

UBD

Circular No. UBD. BPD. No. 33/12.05.001/2010-11 Dated 31.12.2010 - Guidelines to Primary (Urban) Co-operative Banks regarding operation of bank accounts and money mules

It has been brought to our notice that "Money mules" can be used to launder the proceeds of fraud schemes (e.g., phishing and identity theft) by criminals who gain illegal access to deposit accounts by recruiting third parties to act as "money mules." In some cases these third parties may be innocent while in others they may be having complicity with the criminals.

UCBs are, therefore, advised to strictly adhere to the guidelines on KYC/AML/CFT issued from time to time and to those relating to periodical updation of customer identification data after the account is opened and also monitor transactions in order to protect themselves and their customers from misuse by such fraudsters.

RPCD

Circular No. RPCD.CO.LBS.BC.No.44 /02.19.10/2010-11 Dated 29.12.2010 - Lead Bank Scheme – Conduct of State Level Bankers' Committee (SLBC)/Union Territory Level Bankers' Committee (UTLBC) meetings

Of late, it has been observed that these meetings are neither conducted in time nor the agenda is circulated in advance. Further, the level of participation in the meetings is not upto the prescribed level undermining the prime objective of holding the meetings. A need is, therefore, felt to streamline and strengthen the system of holding of these meetings.

In view of the above, to improve the effectiveness and streamlining the functioning of SLBC/UTLBC meetings, it has been decided that henceforth, beginning from January 1, 2011, convenor banks will prepare a yearly calendar of programme (calendar year basis) in the beginning of the year itself, for conducting the meetings. The calendar of programme should clearly specify the cut off dates for data submission to SLBC and acceptance thereof by SLBC convenor. Broad guidelines to be used for preparation of the calendar of programmes are detailed in the circular.

Circular No. RPCD.CO.RCB.AML.No.7251/07.02.12/2010-11 Dated 04.01.2011 - List of Terrorist Individuals/Organisations - under UNSCR 1267(1999) and 1822(2008) on Taliban/Al-Qaida Organisation

Please refer to our circular letter RPCD.CO.RCB.AML.No. 6706/07.02.12/2010-11 dated December 14, 2010. We have since received from Government of India (Ministry of External Affairs) copy of notes forwarded by the Chairman of UN Security Council's 1267 Committee regarding changes made in the Consolidated List of Individuals and entities linked to Al-Qaida and Taliban.

Banks are required to update the consolidated list of individuals/entities as circulated by Reserve Bank and before opening any new account, it should be ensured that the name/s of the proposed customer does not appear in the list. Further, banks should scan all existing accounts to ensure that no account is held by or linked to any of the entities or individuals included in the list.

Circular No. RPCD.CO.RCB.BC.No.45/07.40.06/2010-11 Dated 05.01.2011 - Submission of Data to Credit Information Companies - Format of Data to be submitted by Credit Institutions

Please refer to our circular RPCD.CO.RF.BC.No.17/07.40.06/2010-11 dated September 6, 2010 on the captioned subject.

It has been decided that the Director Identification Number (DIN) may be included as one of the fields in the data format submitted by State and Central Co-operative Banks to credit information companies. Such provision of DIN will further ensure that the data relating to credit information is accurate and complete.

Further, we advise that Experian Credit Information Company of India Private Ltd. has since informed us that their corporate office address has been changed.

Circular No. DGBA. CDD. No. H-4311/15.02.001/2010-11 Dated 27.12.2010 - Public Provident Fund Scheme, 1968 Amendment to Section 9(3) of the Scheme

We forward herewith a copy of Government of India Notification G.S.R. 956 (E) dated December 7, 2010, on the captioned subject, the contents of which are self explicit.

The contents of the Notification may be brought to the notice of branches of your bank operating the PPF scheme and may also be displayed on the notice boards of your branches for information of the PPF subscribers.

DPSS

Circular No. DPSS. CO. CHD. No. 1514 / 03.01.03 / 2010-2011 Dated 04.01.2011 - Scope of Speed Clearing – Extension of facility to cover all transaction codes other than those relating to Government Cheques – Instructions to be effective from February 1, 2011

Speed Clearing is currently enabled for cheques issued by account holders with transaction codes 10 (savings bank), 11 (current account) and 13 (cash credit). Keeping in view the benefits to customers as also the infrastructural and processing preparedness of banks, it has been decided to extend the scope of Speed Clearing to cover all transaction codes, other than those relating to government cheques. Banks may exercise usual care and caution while handling such instruments.

The revised instructions will be effective from February 1, 2011. Please confirm that necessary arrangements will be in place to ensure compliance.

Circular No. DPSS.CO.No.1503/02.14.003/2010-2011 Dated 31.12.2010 - Security Issues and Risk mitigation measures related to Card Not Present (CNP) transactions

Please refer to our circular RBI/DPSS/No.1501/02.14.003/2008-2009 dated February 18, 2009, wherein a directive was issued making it mandatory for banks to put in place additional authentication/validation based on information not visible on the cards for all on-line card not present (CNP) transactions except IVR transactions. This mandate was further extended to all CNP transactions including IVR transactions with effect from January 01, 2011 vide our circular RBI/2009-2010/420, DPSS No. 2303 / 02.14.003/2009-2010 dated April 23, 2010.

After further discussions with the stakeholders it has been decided to permit a parallel run of the new arrangement for a period of one month upto January 31, 2011. During this period IVR transactions will not be declined merely on account of non authentication of additional factor. However, after January 31, 2011 no IVR transactions shall be permitted unless such transactions comply with the additional factor authentication requirement.

DNBS

Circular No. DNBS (PD) CC.No. 206 /03.10.001/2010-11 Dated 05.01.2011 - Regulatory Framework for Core Investment Companies(CICs)

The Bank had issued the captioned guidelines DNBS(PD)CC.No. 197/03.10.001/2010-11 dated August 12, 2010 to all Core Investment Companies (CICs) in terms of which CICs were defined and systemically important CICs (CICs-ND-SI) are required to be registered with RBI. It was also advised therein that all CICs-ND-SI should apply to RBI for obtaining CoR within a period of six months from the date of the Notification. In continuation of the above Guidelines, the definitions in the Guidelines have been modified as detailed in the circular. Notifications issued in this regard DNBS.PD.No.219/CGM (US)-2011, DNBS.PD.No. 220/CGM (US)-2011 and DNBS. PD. No. 221 / CGM (US)-2011 dated January 5, 2011 are enclosed for meticulous compliance. To the extent the guidelines referred to in paragraph 1 above are inconsistent with these notifications, the directions contained in these notifications shall prevail.

A.P. DIR 

Circular No. A.P. (DIR Series) Circular No. 33 Dated 05.01.2011 - Exim Bank's Line of Credit of USD 61.60 million to the Government of the Republic of Kenya

The Credit Agreement under the LOC is effective from December 14, 2010 and the date of execution of Agreement is November 16, 2010. Under the LOC, the last date for opening of Letters of Credit and Disbursement will be 48 months from the scheduled completion date(s) of contract(s) in the case of project exports and 72 months (November 15, 2016) from the execution date of the Credit Agreement in the case of supply contracts.

Circular No. A.P. (DIR Series) Circular No.34 Dated 05.01.2011 - Exim Bank's Line of Credit of USD 30 million to the Government of the Republic of Cote d'Ivoire - Date of Execution of agreement - December 30, 2009

The Credit Agreement under the LOC is effective from November 26, 2010 and the date of execution of Agreement is December 30, 2009. Under the LOC, the last date for opening of Letters of Credit and Disbursement will be 48 months from the scheduled completion date(s) of contract(s) in the case of project exports and 72 months (December 29, 2015) from the execution date of the Credit Agreement in the case of supply contracts.

Circular No. A.P. (DIR Series) Circular No. 35 Dated 05.01.2011 - Exim Bank's Line of Credit of USD 15 million to the Government of the Kingdom of Cambodia

The Credit Agreement under the LOC is effective from December 14, 2010 and the date of execution of Agreement is September 14, 2010. Under the LOC, the last date for opening of Letters of Credit and Disbursement will be 48 months from the scheduled completion date(s) of contract(s) in the case of project exports and 72 months (September 13, 2016) from the execution date of the Credit Agreement in the case of supply contracts.

Circular No. A.P. (DIR Series) Circular No. 36 Dated 05.01.2011 - Exim Bank's Line of Credit of USD 30 million to the Government of the Republic of Cote d'Ivoire - Date of Execution of agreement - March 31, 2010

The Credit Agreement under the LOC is effective from November 26, 2010 and the date of execution of Agreement is March 31, 2010. Under the LOC, the last date for opening of Letters of Credit and Disbursement will be 48 months from the scheduled completion date(s) of contract(s) in the case of project exports and 72 months (March 30, 2016) from the execution date of the Credit Agreement in the case of supply contracts.

Circular No. A.P. (DIR Series) Circular No. 38 Dated 05.01.2011 - Exim Bank's Line of Credit of USD 25 million to the Government of the Republic of Mozambique

The Credit Agreement under the LOC is effective from December 13, 2010 and the date of execution of Agreement is July 5, 2010. Under the LOC, the last date for opening of Letters of Credit and Disbursement will be 48 months from the scheduled completion date(s) of contract(s) in the case of project exports and 72 months (July 4, 2016) from the execution date of the Credit Agreement in the case of supply contracts.

DBOD

Circular No. DBOD.BP.BC.No.71 /21.06.001/2010-11 Dated 31.12.2010 - Prudential Guidelines on Capital Adequacy and Market Discipline - New Capital Adequacy Framework (NCAF) - Parallel Run and Prudential Floor

Please refer to our circular DBOD.BP.BC.No.87/21.06.001/2009-10 dated April 7, 2010 on the captioned subject and paragraph 4.1.2 of Master Circular No. DBOD.No.BP.BC.15 / 21.06.001 / 2010-11 dated July 1, 2010 on Prudential Guidelines on Capital Adequacy and Market Discipline - New Capital Adequacy Framework (NCAF), in terms of which foreign banks operating in India and Indian banks having operational presence outside India are required to have parallel run beyond the specified date (i.e., March 31, 2010) and ensure that their Basel II minimum capital requirement continues to be higher than 80% of the minimum capital requirement computed as per Basel I framework for credit and market risks until further advice.

In the Second Quarter Review of Monetary Policy 2010-11 announced on November 2, 2010, banks were advised vide paragraph 102 on 'Regulatory and Supervisory Measures for Commercial Banks - Strengthening the Resilience of the Banking Sector' (copy of extract enclosed) to continue with the parallel run for a period of three years, i.e. till March 31, 2013, subject to review. Accordingly, all the banks in India would continue to have the parallel run till March 31, 2013, subject to review, and ensure that their Basel II minimum capital requirement continues to be higher than the prudential floor of 80% of the minimum capital requirement computed as per Basel I framework for credit and market risks.

All other guidelines on 'Parallel Run' contained in paragraph 2.4 of the aforesaid Master Circular should be adhered to by all the banks.

Circular No. DBOD. AML. BC. No.70/14 .01.001/2010-11 Dated 30.12.2010 - Know Your Customer (KYC) norms / Anti-Money Laundering (AML) standards/ Combating of Financing of Terrorism (CFT)/Obligation of banks under PMLA, 2002

Please refer to our Master Circular DBOD.AML.BC.No.2/ 14.01.001 / 2010 -11 dated July 01, 2010 on Know Your Customer (KYC) norms /Anti-Money Laundering (AML) standards/Combating of Financing of Terrorism (CFT)/Obligation of banks under PMLA, 2002.

In terms of Para 2.3 (c) of the aforesaid Master Circular, banks are required to apply enhanced due diligence measures on higher risk customers. Some illustrative examples of customers requiring higher due diligence have also been given in the paragraph under reference. It is further advised that in view of the risks involved in cash intensive businesses, accounts of bullion dealers (including sub-dealers) & jewellers should also be categorised by banks as 'high risk' requiring enhanced due diligence.

Accordingly, in terms of paragraph 2.8 (a) of the Master Circular cited above, banks are also required to subject these ' high risk accounts ' to intensified transaction monitoring. High risk associated with such accounts should be taken into account by banks to identify suspicious transactions for filing Suspicious Transaction Reports (STRs) to FIU-IND.

Circular No.  DBOD.BP.BC.No.72/21.04.141/2010-11 Dated 31.12.2010 - Investment in Non-SLR Securities- Non-Convertible Debentures (NCDs) of maturity up to one year

Please refer to circular DBOD.BP.BC.44/21.04.141/2003-04 dated November 12, 2003 on Prudential Guidelines on Banks' Investment in Non-SLR Securities which, inter alia, advised the banks that they should not invest in Non-SLR securities of original maturity of less than one-year, other than Commercial Paper and Certificates of Deposits which are covered under RBI guidelines.

In this connection, we advise that henceforth banks are permitted to invest in NCDs with original or initial maturity up to one year issued by corporates (including NBFCs). However, while investing in such instruments banks should be guided by the extant prudential guidelines in force.

The Reserve Bank of India presented its assessment of the health of India's financial sector in the second Financial Stability Report (FSR), released here today. The report reflects the Reserve Bank's continuing endeavour to communicate its assessment of the incipient risks to financial sector stability. The first FSR was released in March 2010.

The second FSR holistically assesses, from a systemic risk perspective, disparate elements of the financial sector eco-structure - the macroeconomic setting, policies, markets, institutions. The movements of various vulnerabilities between March and December 2010 and assessment of the resilience of the financial system have been presented in this Report. It also reflects the considerable efforts made within the Reserve Bank to upgrade the methods and techniques for assessing the health of the financial system in identifying and analysing potential risks to systemic stability.

According to the Report, growth has rebounded strongly in the Indian economy while financial conditions remained stable since the publication of the first Financial Stability Report (FSR) in March 2010. The financial sector in India remained stress-free notwithstanding intermittent volatility, especially in equity and foreign exchange markets. This is also displayed by the Financial Stress Indicator for India, which was introduced in the first FSR. Financial institutions remained healthy, credit offtake has picked up, as has profitability, especially in the first half of 2010-11. The Banking Stability Index points to a healthy improvement in the stability of the banking sector over the past few years. This is corroborated by the results of a range of stress tests undertaken by the Reserve Bank.

• MINISTRY OF FINANCE

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government has made the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.116/2010-Customs, dated the 1st November, 2010 which was published in the Gazette of India, vide number G.S.R. 875 (E), dated the 1st November, 2010, namely:-

In the said notification, in the preamble, for the figure, signs and words "3% ad valorem" the figure, signs and words "2% ad valorem" shall be substituted.

This notification shall come into force with effect from 1st day of January, 2011.

Notification No. 135/2010 Dated 31.12.2010 - Amendment in the Notification No.153/2009-Customs dated 31.12.2009 - substitution of a new table for the existing table

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government has made the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.153/2009-Customs, dated the 31st December, 2009 published in the Gazette of India, vide number G.S.R. 944 (E), dated the 31st December, 2009. In the said notification, for the Table, a new Table shall be substituted.

Notification No. 134/2010 Dated 31.12.2010 - Amendment in the Notification No.68/2006-Customs dated 30.06.2006 - in the TABLE, against serial numbers 1 to 248, in column (4), the entry '7%' to be substituted

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), Cenral government has made the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.68/2006-Customs, dated the 30th June, 2006 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 394 (E), dated the 30th June, 2006, namely:-

In the said notification, in the TABLE, against serial numbers 1 to 248, for the entries in column (4), the entry '7%' shall be substituted.

This notification shall come into force with effect from 1st day of January, 2011.

Notification No. 133/2010 Dated 31.12.2010 - Amendment in the Notification No.67/2006-Customs dated 30.06.2006 - substitution of a new table for the existing table

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government has made the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.67/2006-Customs, dated the 30th June, 2006. In the said notification, for the existing Table, a new Table shall be substituted. This notification shall come into force with effect from 1st day of January, 2011.

Notification No. 132/2010 Dated 28.12.2010 - Anti-dumping duty on imports of certain Rubber Chemicals, namely,MOR,PX13 and TDQ, originating in, or exported from, European Union, People's Republic of China, Chinese Taipei and the United States of America - Amendment to notification No. 94/2005-Customs, dated the 20th October,2005

In exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the said Customs Tariff Act and in pursuance of rule 23 of the said rules, the Central Government has made the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 94/2005-Customs, dated the 20th October,2005, namely: -

In the said notification, after paragraph 2, the following paragraph shall be added, namely: -

"3. This notification shall remain in force up to and inclusive of the 11th May, 2011, unless the notification is revoked earlier".

It is observed that inordinate detention of the seized goods entered for exportation results in delays in fulfillment of export order and at times cancellation of such orders. Detention of goods also adds to congestion in ports besides resulting in payment of demurrage charges to the Custodians. Accordingly, the matter has been re-examined by the Board with the view to ameliorate the aforementioned difficulties faced by exporters and to streamline the procedure of provisional release / exportation of seized goods / goods under investigation on account of mis-declaration in terms of quantity and value etc.

Seizure should be resorted to only when the Customs officers have a reason to believe that the goods in question are liable to confiscation under the Customs Act, 1962 and thereafter the provisions of Section 110A of the Customs Act, 1962 would come into play. However, there may be situations when the goods are to be detained for purpose of tests etc. to confirm the declaration. In such cases the endeavour should be to quickly undertake the necessary action (test / enquiry etc.) and take appropriate legal action thereafter so that the period of detention is kept to the minimum. Thus, a modified course of action is prescribed in respect of goods entered for exportation, as detailed in this circular.

Circular No. 02/2011 Dated 04.01.2011 - Clarification regarding Classification of Polyester Bonded Fabrics and other Bonded Fabrics 

References have been received that divergent practices are being followed by field formations regarding classification of polyester bonded fabrics and that classification disputes of polyester bonded fabrics are pending at various fora. The issue was also discussed in the Chief Commissioners' Conference on Tariff and Allied Matters held on 29.10.2010 at New Delhi where it was decided that the Board may issue a circular clarifying the issue. It is clarified that bonded fabrics should be classified depending on type of textile material and the nature of bonding as explained in this circular.

Customs (N.T.)

Notification No. 102/2010 Customs (N.T.) Dated 29.12.2010 - Rate of exchange of conversion of specified foreign currency into Indian currency or vice versa with effect from January 1, 2011

In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.98/2010-CUSTOMS-NT dated the 26th November, 2010 vide number S.O. 2850 (E), dated the 26th November, 2010, the Central Board of Excise and Customs hereby determines that the rate of exchange of conversion of each of the foreign currency specified in column (2) of each of Schedule I and Schedule II annexed hereto into Indian currency or vice versa shall, with effect from 1st January, 2011 be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the said section, relating to imported and export goods.

Economic Affairs

Notification No. 4 (3)-W&M/2010 Dated 03.01.2011 - Auction for Sale (Re-issue ) of '7.49 per cent Government Stock, 2017'

Government of India has notified sale (reissue) of '7.49 per cent Government Stock, 2017' for an aggregate amount of Rs. 4,000 crore (nominal). The sale will be subject to the terms and conditions spelt out in this notification (called 'Specific Notification') as also the terms and conditions specified in the General Notification F. No. 4 (13)-W&M/2008, dated October 8, 2008 issued by Government of India.

Notification No. 4 (3)-W&M/2010(i) Dated 03.01.2011 - Auction for Sale (Re-issue ) of '7.80 per cent Government Stock, 2020'

Government of India has notified sale (reissue) of '7.80 per cent Government Stock, 2020' for an aggregate amount of Rs. 4,000 crore (nominal). The sale will be subject to the terms and conditions spelt out in this notification (called 'Specific Notification') as also the terms and conditions specified in the General Notification F. No. 4 (13)-W&M/2008, dated October 8, 2008 issued by Government of India.

Notification No. 4 (3)-W&M/2010(ii) Dated 03.01.2011 - Auction for Sale (Re-issue ) of '8.26 per cent Government Stock, 2027'

Government of India has notified sale (reissue) of '8.26 per cent Government Stock, 2027' for an aggregate amount of Rs.3,000 crore (nominal). The sale will be subject to the terms and conditions spelt out in this notification (called 'Specific Notification') as also the terms and conditions specified in the General Notification F. No. 4 (13)-W&M/2008, dated October 8, 2008 issued by Government of India.

Notification No. G.S.R. 956 (E) Dated 07.12.2010 - Public Provident Fund (Amendment) Scheme, 2010

In exercise of the powers conferred by sub-section (4) of Section 3 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government hereby makes the following Scheme further to amend the Public Provident Fund Scheme, 1968, namely :-

1.  (1) This scheme may be called the Public Provident Fund (Amendment) Scheme, 2010. 

(2) It shall come into force on the date of its publication in the Official Gazette.

2. In the Public Provident Fund Scheme, 1968 in paragraph 9, in sub-paragraph (3), after the proviso, the following proviso shall be inserted, namely :- 5. 6. "Provided further that an account opened on behalf of a Hindu Undivided Family prior to the 13th day of May, 2005, shall be closed after expiry of fifteen years from the end of the year in which the initial subscription was made and the entire amount standing at the credit of the subscriber shall be refunded, after making adjustments, if any, in respect of any interest due from the subscriber on loans taken by him. In the case of accounts opened on behalf of Hindu Undivided Family, where fifteen years from end of the year in which initial subscription was made, has already been completed, they shall also be closed at the end of the current year, i.e. the 31st day of March, 2011 and the entire amount standing at the credit of the subscriber shall be refunded, after making adjustments, if any, in respect of any interest due from the subscriber on loans taken by him."

• MINISTRY OF COMMERCE AND INDUSTRY

DGFT

Policy Circular No. 11 (RE-2010)/2009-14 Dated 04.01.2011 - "On-line" submission of application - Clarification regarding use of manual mode for filing application on DGFT's server.

Recently representations have been received from various Exporters/Export Promotion bodies that at certain EDI Ports, there have been problems regarding filing of "on-line" shipping bill due to disruption / malfunctioning of EDI operations and the customs authorities are issuing manual Shipping Bills even from such EDI ports. The matter has been examined. Accordingly, in continuation of the earlier Policy Circular No.44 dated 10.1.2006, wherein this issue was addressed, the matter is further clarified as under:-

a) In such cases, the exporters shall use the manual Shipping Bill filing option on the DGFT's server to file their application for Export Promotion Schemes (Chapter 3,4 and 5 for the FTP).

b) Regional Authority will ensure that the original Shipping Bills submitted are not the EDI Shipping Bills and are the manually assessed Shipping Bills, duly signed by the competent authority. 

Public Notice No. 20/(RE-2010)/2009-2014 Dated 05.01.2011 - Corrections / Amendments in HBPv1 (including Appendices and ANFs) - Deletion of Serial Nos. 9(iii) and 4(2) in the existing ANF 2 D with immediate effect - Existing ANF-2D to be replaced as per specimen

Earlier, the exporters were required to submit the application for grant of Export Licence for Restricted items along with the self certified copy of Export Order/Purchase Order/ Proforma Invoice. But, in order to reduce the transaction cost, this requirement has been dispensed with. Now, the exporters will be required to only indicate the name and address of foreign buyers in the application form.

DGFT is introducing additional facility on DGFT's website (http://dgft.gov.in) for enabling members of trade to file their IEC applications 'on-line" with effect from 1.1.2011. The additional facility of filing "on-line" application for obtaining IEC will reduce the transaction cost and time for the applicant, would ensure easy, flexible filing of application and reduce human interface and paper work in the process.

The existing system of filing the IEC application manually would simultaneously continue till further orders i.e. the applicant will have an option to prefer his application either manually or "on-line" as per his/her convenience.

Notification No. 16(RE-2010)/2009-2014 Dated 03.01.2011 - Prohibition on import of milk and milk products from China

In exercise of powers conferred by Section 5, read along with Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992, also read along with paragraph 2.1 of Foreign Trade Policy, 2009-14, the Central Government hereby further extends the prohibition on import of milk and milk products including chocolates and chocolate products and candies/ confectionary/ food preparations with milk or milk solids as an ingredient, from China, imposed vide Notification No. 67(RE-2008)/2004-2009 dated 1st December, 2008 and extended vide Notification No. 49/2009-2014 dated 24th June, 2010, for a period of one year from 24th December, 2010 and until further orders.

The exporters who have obtained Registration Certificate from Textile Commissioner, Mumbai on 1st December, 2010 would also now be permitted to export Cotton Yarn. Earlier notification of 22.12.2010 permitted such exporters who would have got RC before 1st December, 2010. Other conditions like quantity limit of RC so issued, validity of RC will remain the same.

Reference is invited to Clause C (4) of IRDA's Guidelines on Group Insurance Policies issued vide circular 015/IRDA/Life/Circular/GI Guidelines/2005 dated 14th July, 2005 wherein insurers are prohibited to make any other payments, whether as management expenses or documentation expenses or profit commission or bulk discount or payment of any other description to the agent or corporate agent or group organiser or group manager. Keeping in view the objective of ensuring the lower ultimate costs of insurance to the insured members of the group insurance, the following part of the within referred Clause C (4) of the Guidelines stands omitted.

"If the Group Manager wishes to collect a service charge from the members to cover his costs, he should clearly disclose it as an additional cost and not as premium, in his communication to his members".

Further, any organisation / entity in its capacity as Group Organiser / Group Manager, with whatsoever nomenclature may be, is prohibited from collecting any amount other than the insurance premium payable to the Insurers with regard to the underlying Group Insurance.

The above clarification is issued under Section 14 (2) (e) of Insurance Regulatory and Development Authority Act, 1999.

This circular would come into effect from 01st April, 2011.

Press Release Dated 04.01.2011 - Review of Motor Insurance Premium rates for third party liability cover

The Third Party Motor Insurance premium rates are regulated by the Insurance Regulatory and Development Authority (IRDA). These rates were last fixed in the year 2007. IRDA has placed an exposure draft on its website and has called for comments in regard to the revision of premium rates. This is to draw your kind attention to the exposure draft.

Circular No. IRDA/F&A/CIR/217/12/2010 Dated 27.12.2010 - Recognition of Surplus arising in non-participating funds as profit / loss in the Profit & Loss Account

Authority has observed that there is no uniform approach followed by the insurers for transfer of the surplus to the Profit & Loss Account. A few of the insurers are doing it on quarterly basis while a few are doing on yearly basis.

In view of the same, it is clarified that the surplus arising in non-participating funds may be recognized as profit in the Profit & Loss Account on quarterly basis provided that

a. Financial Statement are audited on quarterly basis

b. The surplus to be transferred to Profit & Loss Account must be certified and recommended by the Appointed Actuary of the company.

c. A disclosure to this effect should be made in the financial statement.

d. In any case the amount transferred must not exceed the yearly profit. The difference if any must be adjusted in the 4th quarter. In case the variation in the surplus is in excess of 10% or `5crores, which is higher, then the company shall submit to the Authority an explanation stating reasons for variation along with the annual financial statement. The explanation of variations so submitted shall be approved by Board of Directors.

In case of deficit, insurers will continue to follow the existing practices of making the shortfall good by transferring the funds from shareholders account or recognizing the deficit in the profit & loss account on quarterly basis. 

• MINISTRY OF CORPORATE AFFAIRS

Circular No. 6/2010 Dated 03.12.2010 - Easy Exit Scheme, 2011 under Section 560 of the Companies Act, 1956 to come into force on 01.01.2011

It has been observed that certain companies have been registered under the Companies Act, 1956, but due to various reasons some of them are inoperative since incorporation or commenced business but became inoperative later on and are not filing their due documents timely with the Registrar of Companies. These companies may be defunct and are desirous of getting their names strike off from the Register of Companies.

In order to give an opportunity to the defunct companies, for getting their names strike off from the Register of Companies, the Ministry had launched a Scheme namely, Easy Exit Scheme, 2010 under Section 560 of the Companies Act, 1956 during May-Aug, 2010. A large number of companies availed this scheme. However, on huge demands from corporate sector, the Ministry has decided to re-launch the Scheme as, Easy Exit Scheme, 2011 under Section 560 of the Companies Act, 1956. 

The Scheme shall come into force on the 1st January, 2011 and shall remain in force up to 31st January, 2011.

Notification No. L-1/44/2010-CERC Dated 30.12.2010 - Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2010 to come into force w.e.f 01.04.2011, and not 01.01.2011 as notified earlier

Whereas Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2010 was notified on 16.6.2010 in the Gazette of India Extraordinary (Part-III, Section-IV No. 162) and the said regulations are to come into force with effect from 1.1.2011.

Whereas difficulties have arisen to give effect to the said regulations with effect from 1.1.2011 since certain procedures and mechanisms required under the said regulations have not yet been finalized and put in place.

And now, therefore, it is notified for the information of all concerned that Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2010 shall come into force with effect from 1.4.2011.

Press Release Dated 30.12.2010 - Judges appointed at Allahabad High Court

In exercise of the powers conferred by Clause (1) of Article 217 of the Constitution of India, the President is pleased to appoint Shri Justice Ashwani Kumar Singh, Shri Justice Devendra Kumar Arora, Shri Justice Anil Kumar, Kumari Justice Naheed Ara Moonis, Shri Justice Ritu Raj Awasthi, Shri Justice Rajesh Chandra, Shri Justice Shyam Shankar Tiwari, Shri Justice Yogendra Kumar Sangal, Shri Justice Kashi Nath Pandey, Shri Justice Virendra Singh, Shri Justice Ram Autar Singh, Smt. Justice Jayashree Tiwari, Shri Justice Subhash Chandra Agarwal, Shri Justice Yogesh Chandra Gupta, Shri Justice Shri Kant Tripathi, Shri Justice Ashok Srivastava, and Shri Justice Virendra Kumar Dixit, Additional Judges of Allahabad High Court to be Judges of that High Court, in that order of seniority, with effect from the dates they assume charge of their offices.

Any consumer, who is aggrieved by non-redressal of his grievances, may make a representation for the redressal of his grievance to an authority to be known as Ombudsman to be appointed or designated by the State Electricity Regulatory Commission. The Ombudsman shall have his jurisdiction on the representations made by a complainant with respect to his grievance. Section 42 of the Electricity Act, 2003 provides that the Ombudsman appointed by the designated State Commissions shall settle the grievance of the consumer within such time and in such manner as may be specified by the State Commission.

A "Representation" can be made to the Ombudsman by the complainant in person or on behalf of such a complainant who is aggrieved by the outcome of the Forum's proceedings in respect of his/her grievance. The State Commission is empowered to issue regulations prescribing the time and manner for settlement of grievances under Section 181(s) of the Electricity Act, 2003. The Ombudsman shall settle the grievances within such time and in such manner as may be specified by the State Commission.

However, in order to ensure that the judgments of the Ombudsman are adhered by the distribution companies so that the aggrieved consumers in whose favour the judgment has been passed gets his due from the distribution company, the Forum of Regulators are framing the Model Regulations for Consumer Protection.

Press Release Dated 30.12.2010 - Amendments to the Mines Act, 1952 (35 of 1952)

The Union Government today approved the introduction of a Bill in the Parliament to amend the Mines Act, 1952 (35 of 1952). The Bill proposes to amend and consolidate the law relating to regulation of condition of work and welfare of persons employed in mines and for the matter connected therewith or incidental thereto.

These amendments in the Mines Act, 1952 envisage extending the Act to the whole of India including territorial waters, continental shelf, exclusive economic zones and other maritime zones of India substituting the definition of owner so as to make it more comprehensive and specific; define the 'foreign company' with reference to the Companies Act, 1956; provide for appointment of officials in addition to agent of employer in the mines; increase in the penalties provided in various sections and to shift the burden of proof upon the person who is being prosecuted or proceeded against.

The Act was last amended in 1983. Subsequent to the 1983 amendments, several developments in the area of technology, scale of operations, working environment and work practices in coal, non-coal and oil sector have taken place. Mining operations are getting progressively more mechanised with the introduction of heavy machines, shallow deposits getting depleted and mines becoming deeper with their attendant complexities. Also operators from other parts of the world have started acquiring mining rights and managing mining operations within our country. All these developments have necessitated amendments to the Mines Act 1952.

Press Release Dated 01.01.2011 - DoT to hold Consultations for a Transparent Regime of Licensing, Spectrum Allocation Etc.

Shri Kapil Sibal, the Union Minister of communications and Information Technology announced action plan of the Ministry of Communications and IT for next 100 days. The Minister said that the action plan has been worked so as to ensure that the common people gets services at the reasonable cost, the Industry remains robust and the Government gets its share of revenue.

Action Plan of the Departments of Telecommunications, Information Technology and Posts was announced in a Press conference.