MoU Agreement Between India and Germany

RBI draft ECB norms: Firms may get access to sovereign, pension funds

• The Reserve Bank of India (RBI) has proposed to allow domestic firms to borrow from foreign regulated financial entities, pension funds, insurance funds, sovereign wealth funds and other long-term investors as part of a major relaxation in fund raising via external commercial borrowing route. 
• The RBI has also proposed that Indian banks act as ECB lenders subject to norms. The draft ECB norms, however, proposed to lower the all-in cost borrowing by 0.50 per cent to ensure that the funds are borrowed from abroad at a reasonable interest rate. 
• According to the draft guidelines on ECBs released by the RBI, there will only be a small negative list which include stock market operations, real estate activity and purchase of land. They will not be allowed to raise funds via ECBs or rupee-denominated borrowing

Snapdeal acquires luxury goods portal Exclusively.com

Online retailer Snapdeal.com has acquired luxury fashion portal Exclusively.com for an undisclosed amount.
With this acquisition, Snapdeal is seeking to expand its presence in the high-end fashion segment and targeting $2 billion in gross merchandise value (GMV) by the end of the current calendar year.

It will also complement Snapdeal’s existing ecosystem and provide it with a consolidated offering for the luxury and lifestyle shopper, making it India’s first online luxury mall.

The acquisition of Exclusively is similar to India’s e-commerce giant and Snapdeal’s arch rival Flipkart. Earlier in May 2015, Flipkart had acquired online fashion retailer Myntra for an estimated Rs 2,000 crore deal.

About Snapdeal.com

• Snapdeal.com was started in February 2010.
• It was founded by Kunal Bahl and Rohit Bansal, an alumnus of IIT Delhi.
• Since its formation Snapdeal has grown to become the largest online marketplace in India. 
• At present it offers an assortment of 4 million+ products across diverse categories from over 50,000 sellers, shipping to 4,000 towns and cities in India.

Facebook, Reliance Communication tie up to provide free access to Internet

India’s Reliance Communications Limited (RCOM) has partnered with social networking giant Facebook to offer free internet access.

Both companies have launched Internet.org, a Facebook-led initiative to bring internet to everyone in the world.

Key facts

• Under this initiative both companies aim to bring the power of Internet to a billion people in India in order to increase internet inclusion and encourage more Indians to go online. 
• As part of this initiative, RCOM will offer free data access to 33 popular websites for all its customers under the umbrella of Internet.org.
• Most of the services of 33 popular websites will be available in several Indian languages including English, Hindi, Tamil, Telugu, Malayalam, Gujarati and Marathi.
• All the subscriber of RCOM who have internet enabled hand set (mobile phones) will get access to this free service.
• Android based app of Internet.org on smartphones will be also provided for accessing free internet. It should be noted that India will be the first country in Asia to get this app.
• It is estimated that 70 per cent of RCOM’s customers who have such phones will benefit from this service that are now off line i.e. don’t have internet connection.

In the first phase this service has gone live in RCOM’s 7 circles which include Mumbai, Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu, Chennai and Kerala. While in second phase, this service will be launched in pan India by May 2015.

Both companies by launching this initiative are opening new socioeconomic opportunities to users in fields like education, information and commerce. It will in turn create more jobs and opportunities in India which is world’s second-biggest mobile market with Internet.

RBI releases final guidelines for the Bharat Bill Payment System (BBPS)

Reserve Bank of India issued the final guidelines for the Bharat Bill Payment System (BBPS). It is anintegrated bill payment system offering inter-operable and accessible bill payment service to customers through a network of agents, enabling multiple payment modes, and providing instant confirmation of payment.

Key Facts

• It will help consumers pay multiple bills like electricity, telephone and school fees at a single point of transaction.
• The National Payment Corporation of India (NPCI) has been appointed as the nodal body which will set the standards, and also take care of clearing and settlement as the Bharat Bill Payment Central Unit (BBPCU).
• In the two tiered BBPS set-up, there will be authorised operational units called Bharat Bill Payment Operating Units (BBPOUs) with an agent network under the BBPCU.
• RBI has set a Rs 100-crore networth and domestic registration as qualifying conditions for those seeking to be authorised collection agents.
• Participants in the BBPS will include authorised entities such as BPCU, BBPOUs as well as their authorised agents, payment gateways, banks, billers and service providers, and other entities, including authorised prepaid payment instrument issuers.

Thus, BBPS will help track all the payments being made in economy, including cash payments to utilities, schools, and telcos among others.

RBI lifts ban on carrying 1,000, 500 bank notes to and from Nepal, Bhutan

Reserve Bank of India (RBI) has lifted ban on carrying Indian bank notes of Rs 1,000 and 500 denominations to and from Nepal, Bhutan.

In this regard RBI has issued a circular that eased the restriction on export and import of bank notes of 1,000 and 500 denominations for Nepal and Bhutan. However, RBI has put a limit of carrying such notes at Rs 25,000 per person.

Earlier in May 2000, RBI had imposed ban following the request of Union government to curb smuggling of counterfeit currency.

Implication: It will provide a great relief to workers from both nations as well as Indian tourists travelling to Nepal and Bhutan.

RBI signs an information sharing agreement with Brazil’s Central Bank

Reserve Bank of India (RBI) has signed a Memorandum of Understanding (MoU) on Supervisory Cooperation and Exchange of Supervisory Information with Brazil’s Central Bank- Banco Central do Brasil (BCB).

This MoU was signed by Anthero de Moraes Meirelles, Deputy Governor for Supervision, BCB and S.S. Mundra, Deputy Governor, Reserve Bank of India.

• RBI by signing such MoU with supervisors of other countries is seeking to promote greater co-operation and share supervisory information among the authorities.
• In this regard, RBI in total has signed 23 such MoUs, one Letter for Supervisory Co-operation and one Statement of Co-operation (SoC), with different Central Banks of other countries and overseas regulators/supervisors.

RBI Doubles the FOREX Remittance Limit under Liberalised Remittance Scheme (LRS)

The Reserve Bank of India (RBI) in its monetary policy review has enhanced the limit for foreign exchange (FOREX) remittances under Liberalised Remittance Scheme (LRS) to $250,000 (Rs. 1.5 crore) per person per year.
This limit was doubled compared to earlier limit of $125,000 per person per year.

Under the LRS, Indians can open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions, without permission from the RBI.

Background
RBI has taken this decision after reviewing the external sector outlook as India’s foreign exchange reserves touched all-time high at $322.135 billion in mid-January 2015 and further exercise in macro prudential management.

Earlier in 2013, RBI had reduced the limit for FOREX remittances under this scheme to $75,000 as the rupee came under strong pressure. But later, in June 2014, it was again raised the limit to $125,000 (Rs. 75 lakh).

RBI constitutes high level panel on urban cooperative banks (UCB)

The Reserve Bank of India (RBI) has constituted a high-powered panel on urban cooperative banks (UCB).
It will be headed by RBI Deputy Governor R Gandhi and comprise of eight member who will be experienced bankers. They will submit its report within three months from the date of its first meeting.

This high-powered panel will re-examine and recommend appropriate set of businesses, size, conversion and licensing terms for the UCB sector.

The Terms of Reference of the high level panel are:

1. Businesses: Examine the line of businesses that UCBs may be permitted to undertake and their benchmark in terms of size of business, capital requirement, regulatory regime etc.
2. Size of UCB: Suggest the appropriate size up to which a UCB may be able to grow without undue risk to the system.
3. Conversion Criteria & licensing terms : Suggest the criteria for allowing voluntary conversion by a UCB and examine whether the time is opportune to give license to new UCBs.

Determine the modalities of implementing the suggestion of the Malegam Committee. Especially, whether the 50 per cent in value of deposits should be held by voting members. Thus, propose a feasible structure that puts majority voting in the hands of contributors of funds in UCB.

ICICI Bank launches India’s first contactless credit and debit cards

India’s largest private sector bank Industrial Credit and Investment Corporation of India (ICICI) Bank has launched country’s first ‘contactless’ debit and credit cards.
These cards will provide its customers to make electronic payments by waving the cards near the merchant terminal instead of dipping or swiping.

Facts about ICICI Bank’s contactless cards

• These cards are based on the Near Field Communication (NFC) technology and powered by MasterCard contactless and Visa payWave technologies.
• It provide customers with the improved convenience of speed as these cards require significantly less time than traditional cards to complete a transaction.
• It also enhances security features for the customer.

Presently, bank has introduced these cards in cities like Gurgaon, Hyderabad and Mumbai. ICICI Bank also has provided with over 1200 Electronic Data Capture (EDC) machines that are capable of accepting contactless payments in these cities.

ICICI Bank Launches Digital Village Project in Akodara Village of Gujarat

Industrial Credit and Investment Corporation of India (ICICI) Bank has launched its own version of Digital Village Project by adopting entire Akodara Village in Sabarkantha district of Gujarat.
It was launched presence of Prime Minister Narendra Modi and ICICI Bank MD and CEO Chanda Kochar to mark 60-year-celebration of the ICICI group’s existence.

Key facts about ICICI Bank’s Digital Village Project

• It is launched in lines with Governments flagship programme of Digital India.
• It seeks to provide entire village with services ranging from cashless banking to digitised school teaching.
• As part of this project, banking platform at rural part will be digitized by covering all aspects of banking like opening an account to sale of goods to purchase of products including milk from the vendors or local kirana stores.
• In case of school teaching, it will digitized all school records alongwith the Gujarat syllabus and even teaching methods and tools.
• It will also provide necessary infrastructure needed for digisiting entire village in order to provide villager with the access required to data and information in a digital format.
• Besides basic banking facilities like ATMs and other digital banking services, other services like e-health, e-milk producer group, Wi-Fi connectivity and schools with digital black boards in the village, along with a host of other digital facilities will be provided under this project.

About ICICI Bank

It was established in 1955 as ICICI Ltd.

Originally it was set up as an Indian financial institution as the initiative of the World Bank, the Government of India and representatives of Indian industry to provide project financing to Indian businesses.

Later in 1994, it got merged to form ICICI Bank.

RBI relaxes KYC norms for (NBFC’s) Non-Banking Financial Companies

Reserve Bank of India (RBI) has relaxed Know-Your-Customers (KYC) norms for Non-Banking Financial Companies (NBFCs).

In this regard, RBI has amended the KYC norms in order to remove the practical difficulties and constraints being faced by NBFC’s in getting KYC documents at frequent intervals.

Previously, as per the norms it was necessary for NBFC’s to undertake KYC once in every 5 years for low risk category customers and once in two years for both high and medium risk categories.

But as per new norms, full KYC exercise will be required to be done at least every 10 years for low risk and at least every 8 years for medium risk individuals and entities.

While for the high-risk individuals and entities, it should be done in at least every 2 years.

This full KYC exercise will be done by taking into account whether and when client due diligence measures have previously been undertaken and the adequacy of data obtained.

However, the new norm does not mention physical presence of clients for such periodic updations.

Rajan warns against compromising India’s interest for FDI

Reserve Bank of India Governor Raghuram Rajan, on Monday, warned against compromising India’s interest for the sake of attracting foreign investment, and said the priority should be framing transparent policies as well as resolving contractual tax disputes quickly.

“The most stable form of financing, foreign direct investment (FDI) has the additional benefit of bringing in technology and methods. But India should not be railroaded into compromising its interests to attract FDI,” he said in a commentary posted on the website of Project Syndicate.

“If India is to succeed, it will have to deepen regional and domestic demand, strengthen its macroeconomic institutions, and join in the fight for an open global system. Diminished expectations abroad should not lead India to lower its ambitions,” Dr. Rajan said. Foreign inflows in the country rose by 22 per cent to $18.88 billion during the eight months of the current fiscal.