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Government Securities Market in India – A Primer

9. Who are the major players in the G-Secs market? +

Major players in the G-Secs market include commercial banks and PDs besides institutional investors like insurance companies. PDs play an important role as market makers in G-Secs market. A market maker provides firm two way quotes in the market i.e. both buy and sell executable quotes for the concerned securities. Other participants include co-operative banks, regional rural banks, mutual funds, provident and pension funds. Foreign Portfolio Investors (FPIs) are allowed to participate in the G-Secs market within the quantitative limits prescribed from time to time. Corporates also buy/ sell the G-Secs to manage their overall portfolio.

External Commercial Borrowings (ECB) and Trade Credits

D. RECOGNISED LENDERS/ INVESTORS

9. Can Indian banks participate in the process of issuance of Rupee denominated bonds overseas in any other manner? +

Indian banks cannot subscribe to RDBs issued overseas in primary market but can be arrangers/ underwriters/ market makers/ traders subject to compliance with prudential norms.

Targeted Long Term Repo Operations (TLTROs)

Q9: Whether sale from HTM on account of buy-back by the issuers in respect of specified securities acquired under TLTRO scheme will be reckoned for computation of the regulatory limit applicable for disclosure? +

Ans: Sale from HTM on account of buy-back by the issuers pertaining to specified securities acquired under TLTRO scheme is exempt from the disclosure threshold stipulated in para 2 of RBI Master Circular DBR.No.BP.BC.6/21.04.141/2015-16 dated July 1, 2015.

Indian Currency

B) Banknotes

1. What is the meaning of "I promise to pay" clause on the banknotes? +

As per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay the value of banknote. This is payable on demand by RBI, being the issuer.

The promissory clause printed on the banknotes i.e., "I promise to pay the bearer the sum of Rupees …” denotes the obligation on the part of the Bank towards the holder of the bank note.

Foreign Investment in India

Q.9: For an FPI investment, once the investment is classified as FDI (basis total holding), if the FDI holding comes back to <10%, will the holdings be classified as FPI again ? +

Answer: Once an FDI always an FDI.

Biennial survey on Foreign Collaboration in Indian Industry (FCS)

Details of survey launch

Q9. Which entities can participate in the FCS survey?

Ans.: Companies, who have inward FDI along with foreign technical collaboration (FTC) agreements can participate in this survey.

Core Investment Companies

B. Registration and related matters:

9. How can a company register as a CIC?

Ans: A company seeking registration as a CIC can make an application in the prescribed format through the Bank’s Pravaah Portal.

Remittances [Money Transfer Service Scheme (MTSS) and Rupee Drawing Arrangement (RDA)]

Money Transfer Service Scheme (MTSS)

9. Who is an Overseas Principal ? +

The Overseas Principal should be a registered entity, licenced by the Central Bank / Government or financial regulatory authority of the country concerned for carrying on Money Transfer Activities. The country of registration of the Overseas Principal should be AML compliant. The Overseas Principal should obtain necessary authorisation from the Department of Payment and Settlement Systems, Reserve Bank of India under the provisions of the Payment and Settlement Systems Act (PSS Act), 2007 to commence/ operate a payment system.

Portfolio Investment Positions (PIP) by Counterpart Economy (formerly CPIS) – India

Important points to remember while participating in PIP

Q9. What are the points the reporting entities should remember while filling the survey schedule? +

Ans: The reporting entities should follow the below-mentioned points for filling and submitting the survey schedule:

i. The company must use the latest survey schedule, which is in .xls format, without incorporating any macros.

ii. The company is required to save the survey schedule in Excel 97-2003 workbook, i.e., in .xls format by following the below-mentioned steps:

Go to Office Button / File → Save As → Save As type
Select “Excel 97-2003 Workbook” and Save the survey schedule in .xls format.

iii. The company is requested not to incorporate any macro in the survey schedule while submitting the same.

iv. Survey schedule submitted in any other format (other than .xls format) will be rejected by the system.

v. Ensure that all information furnished in the survey schedule are complete and no information is missed out.

vi. After filling required details, the responding entities have to fill the declaration present in the survey schedule, which helps in validating that the information entered by the entity are reconfirmed before submission to RBI. This helps to avoid data entry errors, missed data and other errors.

All you wanted to know about NBFCs

B. Entities regulated by RBI and applicable regulations

9. What action is taken if financial companies which are lending or making investments as their principal business do not obtain a Certificate of Registration from the Reserve Bank?

If companies that are required to be registered with the Reserve Bank as NBFCs, are found to be conducting non-banking financial activity, such as, lending, investment or deposit acceptance as their principal business, without obtaining Certificate of Registration from the Reserve Bank, the same would be treated as contravention of the provisions of the RBI Act, 1934 and would invite penal action viz., penalty or fine or even prosecution in a Court of Law. If members of public come across any entity which undertakes non-banking financial activity but does not figure in the list of authorized NBFCs on the Reserve Bank’s website, they should inform the nearest Regional Office of the Reserve Bank, for appropriate action to be taken for contravention of the provisions of the RBI Act, 1934.