SBI urges UK Home Secretary to Reject-Vijay Mallya’s Asylum Plea
JUNE 30, 2020: The letter, written on behalf of the consortium of lenders led by SBI, and dispatched earlier this month, urged the British authorities to expedite the fugitive businessman’s extradition proceedings as this was key to recovering dues from him, said one of the persons. Mallya has only two possible legal remedies left with him: One is to seek asylum, and the other is to approach the European Court of Human Rights (ECHR). While the ECHR is yet to officially receive an application from Vijaya Mallya, top lawyers close to the developments said this is imminent as the high court’s recent judgment allowing his extradition is in violation of certain human rights that the ECHR protects.
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SEBI eases Pricing Framework for Preferential Issue of Shares
The watchdog would provide an additional option to the existing pricing methodology for preferential issuances, said a statement issued by SEBI.
SEBI: Collection of Stamp Duty on the Issue, Transfer and Sale of Units of AIFs
JUNE 30, 2020: Government vide Gazette notification has notified the “Registrars to an Issue and/or Share Transfer Agents” (RTA) registered under the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 as a “depository” for the limited purposes of acting as a “collecting agent” under the Indian Stamp Act, 1899 and the Rules made thereunder, only in case of instruments of the transaction otherwise than through a recognised stock exchange or depository. In this regard, you are directed to comply with the applicable provisions of the Indian Stamp Act, 1899 and the Rules made thereunder regarding the collection of stamp duty on sale, transfer and issue of units of AIFs w.e.f. July 01, 2020.
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SEBI: Relaxation in Timelines for the Compliance with Regulatory Requirements
JUNE 30, 2020: In view of the situation arising due to COVID-19 pandemic, lockdown imposed by the Government and representations received from the Depositories, SEBI had earlier provided relaxations in timelines for compliance with various regulatory requirements by the depository participants (DPs) / Registrars to an Issue & Share Transfer Agents (RTAs), vide circular nos. SEBI/HO/MIRSD/DOP/CIR/P/2020/62 dated April 16, 2020, and SEBI/HO/MIRSD/DOP/CIR/P/2020/72 dated April 24, 2020.
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CBDT: Employees allowed to claim IT exemption on the Conveyance Allowance under the New Tax regime
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CBDT extends the last date for filing an income tax return for 2019-20 till 30th November 2020
Reserve Bank of India sensitises Members of the Public on the Safe use of Digital Transactions
Safety and security of digital transactions are of paramount importance to their users. The Reserve Bank has put in place many mechanisms to ensure the same by continuously and actively undertaking digital awareness campaigns in the print and Audio-Visual media, including through the Bank’s flagship programme “RBI Kehta Hai”. In recent days there are reports of users falling prey to fraudsters who are luring them on fictitious pretexts, such as alleged completion of KYC requirements, impersonating identities and websites of banks and payment system operators, etc. To promote safe digital transactions among the general public it is reiterated that users should take care by (i) not sharing with anyone their ATM / Card (Debit / Credit / Prepaid) details; (ii) not sharing their Password, PIN, OTP, CVV, UPI-PIN, etc.; (iii) avoid undertaking banking or other financial transactions through public, open or free wifi-networks; and (iv) not storing important banking data on the mobile, e-mail, electronic wallet or purse. Consumers may remember that banks and other payment systems operators never ask for details such as password, PIN, OTP, CVV number.
DON’T FORGET TO RESERVE YOUR SEAT FOR
Webinar on Social Justice and Judicial Activism: Hon’ble Mr Justice Rohit Arya
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ORDINANCE: President Promulgates Banking Regulation (Amendment) Ordinance, 2020 for Cooperative Banks
JUNE 26, 2020: The Ordinance amends the Banking Regulation Act, 1949 as applicable to Cooperative Banks. The Ordinance seeks to protect the interests of depositors and strengthen cooperative banks by improving governance and oversight by extending powers already available with RBI in respect of other banks to Co-operative Banks as well for sound banking regulation, and by ensuring professionalism and enabling their access to capital.”The PRS Legislative Research has shared the following details about the ordinance.
- Exclusions: The Act does not apply to certain cooperative societies such as primary agricultural credit societies and cooperative land mortgage banks. The Ordinance amends this provision to state that the Act will not apply to: (i) primary agricultural credit societies, and (ii) cooperative societies whose principal business is long term financing for agricultural development. Further, these societies must not: (i) use the words ‘bank’, ‘banker’ or ‘banking’ in their name or in connection with their business, and (ii) act as an entity that clears cheques.
- Power to make a scheme for reconstruction or amalgamation without imposing moratorium: Under the Act, the Reserve Bank of India (RBI) may apply to the central government to place a banking company under moratorium. During the moratorium, no legal action can be initiated or continued against the bank for a period of up to six months. The bank cannot make any payment or discharge liabilities during this period. The Ordinance adds that during the moratorium, the bank cannot grant any loans or make investments in any credit instruments.
- Further, during the moratorium, RBI may prepare a scheme for reconstruction or amalgamation of the bank, if it is satisfied that such an order is needed to secure the proper management of the bank, or in the interest of depositors, the general public, or the banking system. The Ordinance allows RBI to initiate such a scheme without imposing a moratorium.
- Issuance of shares and securities by cooperative banks: The Ordinance provides that a cooperative bank may issue equity shares, preference shares, or special shares on face value or at a premium to its members or to any other person residing within its area of operation.Further, it may issue unsecured debentures or bonds or similar securities with maturity of ten or more years to such persons. Such issuance will be subject to the prior approval of the RBI, and any other conditions as may be specified by RBI.
- The Ordinance states that no person will be entitled to demand payment towards surrender of shares issued to him by a co-operative bank. Further, a co-operative bank cannot withdraw or reduce its share capital, except as specified by the RBI.
- Supersession of Board of Directors: The Act states that RBI may supersede the Board of Directors of a multi-state cooperative bank for up to five years under certain conditions. These conditions include cases where it is in the public interest for RBI to supersede the Board, and to protect depositors. The Ordinance adds that in case of a co-operative bank registered with the Registrar of Co-operative Societies of a state, the RBI will supersede the Board of Directors after consultation with the concerned state government, and within such period as specified by it.
- Power to exempt cooperative banks: The Ordinance states that RBI may exempt a cooperative bank or a class of cooperative banks from certain provisions of the Act through notification. These provisions relate to restrictions of certain types of employment, qualifications of the Board of Directors and, the appointment of a chairman. The time period and conditions for the exemption will be specified by RBI.
- Certain provisions omitted: The Ordinance omits certain provisions from the Act. Some of these provisions are listed below:
- The Act restricts cooperative banks from making loans or advances on the security of its own shares. Further, it prohibits the grant of unsecured loans or advances to its directors, and to private companies where the bank’s directors or chairman is an interested party. The Act also specifies conditions when unsecured loans or advances may be granted and specifies the manner in which the loans may be reported to RBI. The Ordinance omits this provision from the Act.
- The Act states that cooperative banks cannot open a new place of business or change its location outside the city, town or village in which it is currently located, without permission from RBI. The Ordinance omits this provision. The Ordinance also omits a provision requiring a scheduled cooperative bank to maintain assets with a value not exceeding 40% of its total demand and time liabilities, within India.
BANKING REGULATION (AMENDMENT) ORDINANCE, 2020
CONFERENCE ALERTS
For Academicians, Lawyers, Students, Research Scholars, Personnel from Corporates, etc. from various fields of banking/ finance and/or law, allied subjects and multi-disciplinary fields.
Gujarat National Law University is a National Law University established under the Gujarat National Law University Act, 2003 in the state of Gujarat. The university is located at Gandhinagar, which is the capital of Gujarat and is located 23 kilometres north of the city of Ahmedabad. Centre for Business and Public Policy, Gujarat National Law University (GNLU) is organising International Conference on Banking and Finance, 2020.
Dates: 25th and 26th September 2020
Conference Theme
Contemporary Issues in International Finance and Contemporary Issues in International and Indian Banking
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