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Legal and Corporate Secretarial Updates

News From The Desk Of IBBI, RBI and DPIIT

December 03, 2020

News From The RBI ,IBBI, and DPIIT 

 
  • News from the desk of Insolvency and Bankruptcy Board Of India:
The Insolvency and Bankruptcy Board of India  has notified amendments in the regulations pertaining to the Insolvency Resolution Process for Corporate Persons Regulations

The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2016 which shall come into force on the date of their publication in the Official Gazette i.e. 13-11-2020. As per section 7 of the I&B Code, a Financial Creditor in order to substantiate the pre occurred default, has to furnish ‘evidence of the default’ recorded with the information utility along with the application made under Section 7. The Board in pursuance of this power has amended the Regulations to specify/add two ‘other record’ or ‘evidence of default’ such as Certified copy of entries in the relevant account in the bankers’ book, and Order of a Court or Tribunal that has adjudicated upon the non-payment of a debt. Further, to improve the level of transparency, the IBBI amended the Regulations to require the RP to intimate each claimant the principle or formulae for payment of debts under a resolution plan, within 15 days of the order of the AA approving such resolution plan. The IRP/RP are now required to submit the list of creditors on an electronic platform for dissemination on its website.

https://ibbi.gov.in/uploads/legalframwork/f659d8b67003518230543dd56825fffc.pdf 

The Insolvency and bankruptcy board of India has notified the Information Utilities (Amendment) Regulations, 2020 to further amend the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, which shall come into force on the date of their publication in the Official Gazette i.e. 13-11-2020. The amendment brings in new regulation 21A which deals with dissemination of public announcement in which an information utility shall disseminate every public announcement it receives or has access to, on the date of its receipt or access, to its registered users, who are creditors of the corporate debtor undergoing insolvency proceeding under the Code.

https://ibbi.gov.in/uploads/legalframwork/1c05b4c5735edfff380a650335907d9b.pdf

  
  • News from the desk of Reserve Bank of India:

In terms of the  Master Direction on “Compounding of Contraventions under FEMA, 1999, the powers to compound certain contraventions have been delegated to the Regional Offices/Sub-Offices of the Reserve Bank of India such as Paragraph 3 (b) of Schedule I (Issue of shares without approval of RBI or Government, wherever required), Rule 4 (Receiving investment in India from non-resident or taking on record transfer of shares by Investee Company) of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 dated October 17, 2019.

Further, the classification of a contravention under FEMA by the Reserve Bank as ‘technical’ or ‘material’ or ‘sensitive/serious in nature’ as stated in the para 3.5 of A.P. (DIR Series) Circular No. 56 dated June 28, 2010 and para 2 of A.P. (DIR Series) Circular No.11 dated July 31, 2012 has been reviewed and it has been decided to discontinue the classification of a contravention as ‘technical’ that was dealt with by way of an administrative/ cautionary advice and regularize such contraventions by imposing minimal compounding amount as per the compounding matrix as contained in the ‘Master Direction – Compounding of Contraventions under FEMA, 1999’ dated January 01, 2016.

On partial modification of earlier circular, it has been also decided that in respect of the Compounding Orders passed on or after March 01, 2020, a summary information, instead of the Compounding Orders, shall be disclosed publicly by publishing on the Bank’s website.

The complete text of the RBI notification may be viewed at below link:

https://rbidocs.rbi.org.in/rdocs/notification/PDFs/APDIRS62545AA7432734B31BD5B59601E49AA6C.PDF

 
  • News from the desk of Department for Promotion of Industry and Internal Trade (DPIIT):

Proposals for foreign investment in sectors/activities requiring Government of India approval (GOI) as per the Consolidated FDI Policy dated 15th day of October, 2020, as amended from time to time (FDI Policy) and Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 dated 17th October, 2019, as amended from time to time, shall be filed online through the Foreign Investment Facilitation Portal (FIFP).

In this regard, DPIIT has issued SOPs vide its Circular No. 1/8/2016-FDI Policy dated 9th day of November, 2020.The applicant seeking GOI approval would be required to submit the proposal for foreign investment in terms of the guidelines and requirements under the FDI Policy, Standard Operating Procedure for processing FDI proposals, as amended from time to time (SOP) and FIFP. The SOP for FDI proposals states detailed frameworks for Online Filing of Application; Competent Authorities for approval of Foreign Investment; procedural formalities required for processing of applications seeking approval for Foreign Investment; timelines for submission of various documents, etc.

The complete text of the SOP may be viewed at below link: 

https://fifp.gov.in/Forms/SOP.pdf

Last updated: 25/11/2020

Article contributed by:

Munesh Gaur

Senior Associate

MBG Corporate Services

 

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