The value of an imperfect note may be paid for full value/half value under rules as specified in Part III of Reserve Bank of India (Note Refund) Rules, 2009 [As amended by Reserve Bank of India (Note Refund) Amendment Rules, 2018] available in our website under www.rbi.org.in → Publications → Occasional.

The term ‘deposit’ is defined under Section 45 I(bb) of the RBI Act, 1934. ‘Deposit’ includes and shall be deemed always to have included any receipt of money by way of deposit or loan or in any other form but does not include:

i. amount raised by way of share capital, or contributed as capital by partners of a firm;

ii. amount received from a scheduled bank, a co-operative bank, a banking company, Development bank, State Financial Corporation, IDBI or any other institution specified by RBI;

iii. amount received in ordinary course of business by way of security deposit, dealership deposit, earnest money, advance against orders for goods, properties or services;

iv. amount received by a registered money lender other than a body corporate;

v. amount received by way of subscriptions in respect of a ‘Chit’.

Paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance of Public Deposits ( Reserve Bank) Directions, 1998 defines a ‘ public deposit’ as a ‘deposit’ as defined under Section 45 I(bb) of the RBI Act, 1934 and further excludes the following:

a. amount received from the Central/ State Government or any other source where repayment is guaranteed by Central/ State Government or any amount received from local authority or foreign government or any foreign citizen/ authority/ person;

b. any amount received from financial institutions specified by RBI for this purpose;

c. any amount received by a company from any other company;

d. amount received by way of subscriptions to shares, stock, bonds or debentures pending allotment or by way of calls in advance if such amount is not repayable to the members under the articles of association of the company;

e. amount received from directors of a company or from its shareholders by private company or by a private company which has become a public company;

f. amount raised by issue of bonds or debentures secured by mortgage of any immovable property or other asset of the company subject to conditions;

fa. any amount raised by issuance of non-convertible debentures with a maturity more than one year and having the minimum subscription per investor at ₹ 1 crore and above, provided it is in accordance with the guidelines issued by the Bank.

g. the amount brought in by the promoters by way of unsecured loan;

h. amount received from a mutual fund;

i. any amount received as hybrid debt or subordinated debt;

j. amount received from a relative of the director of an NBFC;

k. any amount received by issuance of Commercial Paper.

l. any amount received by a systemically important non-deposit taking non-banking financial company by issuance of ‘perpetual debt instruments’

m. any amount raised by the issue of infrastructure bonds by an Infrastructure Finance Company

Thus, the directions exclude from the definition of public deposit, amount raised from certain set of informed lenders who can make independent decision.

Answer: Form FC-TRS is required to be filed for transfer of capital instruments by way of sale in accordance with FEMA 20(R), from:a person resident outside India holding capital instruments in an Indian company on a repatriable basis to a person resident outside India holding capital instruments on a non-repatriable basis;a person resident outside India holding capital instruments in an Indian company on non-repatriable basis to a person resident outside India holding capital instruments on repatriable basis;a person resident outside India holding capital instruments in an Indian company on repatriable basis to a person resident in India;a person resident in India holding capital instruments in an Indian company to a person resident outside India holding capital instruments on repatriable basis.Sale of capital instruments on a recognized stock exchange by a person resident outside India as prescribed in regulation 10(3) of FEMA 20(R) has to be reported by such person in Form FC-TRS.FC-TRS is not required for:for transfer of shares of an Indian company from a non-resident holding the shares on non-repatriable basis to a resident and vice versa.for transfer of shares from a person resident outside India holding capital instruments in an Indian company on a repatriable basis to a person resident outside India holding capital instruments on a repatriable basisfor transfer of shares by way of gift.The onus of reporting is on the resident (transferor or transferee) or the person resident outside India holding capital instruments on a non-repatriable basis, as the case may be. The form FC-TRS has to be filed with the AD bank within sixty days of receipt/ remittance of funds or transfer of capital instruments whichever is earlier.II. Foreign Portfolio Investment

You can submit only one final bid per security in each primary auction of dated G-Sec, T-Bills and SDLs.

Yes. The prescription is that of a minimum mandatory hedge.

Ans: The period of 10 years was specified as a prudential measure not necessarily in alignment with a provision of the Companies Act. Moreover, the issue here is not public deposits but Outside Liabilities.

The Reserve Bank has stipulated that the Credit Rating should be obtained by the NBFCs once in a year. Normally, the Credit Rrating of a company is valid till it is reviewed by the concerned Rating Agency.

Banks, including co-operative banks, can accept deposits. Non-bank finance companies, which have been issued Certificate of Registration by RBI with a specific licence to accept deposits, are entitled to accept public deposit. In other words, not all NBFCs registered with the Reserve Bank are entitled to accept deposits but only those that hold a deposit accepting Certificate of Registration can accept deposits. They can, however, accept deposits, only to the extent permissible. Housing Finance Companies, which are again specifically authorized to collect deposits and companies authorized by Ministry of Corporate Affairs under the Companies Acceptance of Deposits Rules framed by Central Government under the Companies Act can also accept deposits also upto a certain limit. Cooperative Credit Societies can accept deposits from their members but not from the general public. The Reserve Bank regulates the deposit acceptance only of banks, cooperative banks and NBFCs.It is not legally permissible for other entities to accept public deposits. Unincorporated bodies like individuals, partnership firms, and other association of individuals are prohibited from carrying on the business of acceptance of deposits as their principal business. Such unincorporated bodies are prohibited from even accepting deposits if they are carrying on financial business.

As regards DICGC Guarantee fees, the banks have been given discretion to absorb or to pass on the guarantee fees to the borrower in case of advances over Rs.25,000/- excluding advances to weaker sections. Banks should bear DICGC guarantee fees in respect of advances upto Rs.25,000/- and all advances to weaker sections.

Ans: The Directions on CIC-ND-SIs have not restricted them from making overseas investment. Such investment will be governed by the provisions of Chapter VII of Master Direction-Core Investment Companies (Reserve Bank) Directions, 2016. Similarly, presently CIC-ND-SIs can raise funds through ECB. The same would be governed by the instructions contained in the ECB Policy issued by Foreign Exchange Department of the Reserve Bank. Lending to NBFCs/ CICs by banks will be governed by the provisions as applicable to banks and specifically contained in the instructions on ‘bank finance to NBFCs’ issued by Department of Banking Regulation of the Reserve Bank.