June 2016

A SUMMARY OF NOTIFICATIONS ISSUED BY RBI DURING MAY 2016

Export Data Processing and Monitoring System (EDPMS)
To simplify the procedure for filing returns on a single platform and for better monitoring, RBI decided (26.05.16) to integrate the following returns (wef 15.06.16) with EDPMS, in operation since March 1, 2014.
a) Caution / De-caution Listing of Exporters : AD banks can access the updated list of caution listed exporters through EDPMS on daily basis. Criteria for cautioning / de-cautioning in EDPMS are as under:
i. The exporters would be caution listed if any shipping bill against them remains open for more than two years (from date of shipment) in EDPMS. If bills are realised and closed or extension for realisation is granted, the exporter will automatically be de-caution listed.
ii. The exporters can also be caution listed on the recommendation of AD banks. RBI will caution / de-caution the exporters in such cases.
b) Reporting of Advance Remittance for Exports: RBI decided to capture the details of advance remittances received for exports in EDPMS. Banks will have to report all the inward remittances including advance as well as old outstanding inward remittances received for export of goods / software to EDPMS. The quarterly return presently being submitted by banks for delay in utilization of advances received for export has been discontinued.
c) Export Outstanding Statement (XOS): With effect from March 01, 2014, details of all export outstanding bills can be obtained from the EDPMS. AD banks were required to report the old outstanding bills prior to Mar 01, 2014 in XOS on half yearly basis as at the end of June and December every year. To reduce the reporting burden of AD Banks, RBI decided to migrate the XOS data reported by the AD banks for HY ended Dec 2015 onwards to EDPMS and discontinue separate reporting of XOS for the subsequent periods. AD banks should mark off / close the XOS data pertaining to pre March 01, 2014 as and when amount has been realised.
Foreign Exchange Management (FC Accounts by persons Resident in India) Regulations 2015
Further to extant guidelines, RBI decided (23.06.16) that an Indian startup, having an overseas subsidiary, may open a FC account with a bank outside India for crediting to the account, the foreign exchange earnings out of exports/sales made. The balances held in such accounts, to the extent they represent exports from India, shall be repatriated to India within prescribed period for realization of exports.
In addition, payments received in foreign exchange by an Indian startup arising out of sales/ export made by the startup or its overseas subsidiaries will be a permissible credit to EEFC account maintained in India by the startup.
Further, any insurance/ reinsurance company registered with the Insurance Regulatory and Development Authority of India (IRDAI) may open a foreign currency account with a bank outside India to carry out insurance/ reinsurance business.

Memorandum of Procedure for channeling transactions through Asian Clearing Union (ACU)
In terms of Memorandum (17.02.10), the minimum amounts and the multiples in which RBI receives and pays U.S. Dollar/ Euro was fixed as $ 25000/ Euro 25000 and $ 1000/ Euro 1000, respectively. RBI decided (26.05.16) to revise the minimum amount and the multiples in which RBI will receive and pay for the purpose of funding or for repatriating the excess liquidity in the ACU Dollar and ACU Euro accounts to $ 500 / Euro 500.

ATMs – Measures for Card Present (CP) Transactions
The POS terminal infrastructure in India has been enabled to accept and process EMV Chip and PIN cards but the ATM infrastructure continues to process the card transactions based on data from the magnetic stripe due to which the transactions remain vulnerable to skimming, cloning, frauds etc. Banks and the White Label ATM operators have been advised by RBI (26.05.16) to ensure that all the existing ATMs installed/operated by them are enabled for processing of EMV Chip and PIN cards by Sept 30, 2017. All new ATMs shall necessarily be enabled for EMV Chip and PIN processing from inception. For switching, clearing and settlement of their ATM transactions, banks with the approval of their Board, may join any authorised ATM/Card network provider. A quarterly progress report should be within 15 days following the quarter end, to RBI.

Information on Investment in Commercial Papers and Unhedged Foreign Currency Exposures of the Borrowers to Credit Information Companies
On recommendations of Committee to Recommend Data Format for Furnishing of Credit Information to Credit Information Companies (Chairman: Shri Aditya Puri) RBI decided (23.06.16) to capture the information on CPs and UFCE:
Commercial papers : The information on CPs issued by the companies shall be reported on a monthly basis to all the four credit information companies (CICs) by the bank which has been designated as the Issuing and Payment Agent (IPA) for the particular CP issue. If there are multiple IPAs for a single CP issue, they shall report to the CICs, the details pertaining to the portion of the issue which is with them. The IPA shall also report any default in the redemption of the relevant CP issue. It is clarified that the investing credit institutions need not report the information on CPs to the CICs.
Unhedged Foreign Currency Exposures : The information regarding UFCE of individual borrowers shall be reported on a quarterly basis to all the four CICs by the lending bank (in the case of solo lenders) /consortium leader (in the case of consortium arrangements)/largest lender (in the case of multiple lending arrangements). This information shall be reported in the Credit Facility (CR) Segment of Commercial Data format.
The reporting requirements is effective from July 1, 2016 i.e. from the credit information reports showing the position for the month of June 2016.