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Retail Direct Scheme

Know Your Customer (KYC) related queries

18. Why do I need to provide my bank account details? +

The funds will be settled through this rupee savings bank account in case of any purchase/sale. Periodic coupon payments and redemption amount of the invested security will also be credited to this bank account.

Business restrictions imposed on Paytm Payments Bank Limited vide Press Releases dated January 31 and February 16, 2024

National Common Mobility Card (NCMC) issued by Paytm Payments Bank

18. I have an NCMC card issued by Paytm Payments Bank. Can I continue to use it after March 15, 2024? +

Yes. You can continue to use your NCMC card upto the available balance. However, you will not be able to load or top up funds into the card after March 15, 2024. In order to avoid inconvenience, it is suggested that you obtain an NCMC card issued by another bank or non-bank pre-paid instrument (PPI) issuer, before March 15, 2024

Government Securities Market in India – A Primer

18. What is Delivery versus Payment (DvP) Settlement? +

Delivery versus Payment (DvP) is the mode of settlement of securities wherein the transfer of securities and funds happen simultaneously. This ensures that unless the funds are paid, the securities are not delivered and vice versa. DvP settlement eliminates the settlement risk in transactions. There are three types of DvP settlements, viz., DvP I, II and III which are explained below:

i. DvP I – The securities and funds legs of the transactions are settled on a gross basis, that is, the settlements occur transaction by transaction without netting the payables and receivables of the participant.

ii. DvP II – In this method, the securities are settled on gross basis whereas the funds are settled on a net basis, that is, the funds payable and receivable of all transactions of a party are netted to arrive at the final payable or receivable position which is settled.

iii. DvP III – In this method, both the securities and the funds legs are settled on a net basis and only the final net position of all transactions undertaken by a participant is settled.

Liquidity requirement in a gross mode is higher than that of a net mode since the payables and receivables are set off against each other in the net mode.

Foreign Investment in India

Q.18: What are the guidelines on valuation of capital instruments ? +

Answer: Please refer to regulation 11 of FEMA 20(R).

Particulars	Listed Company	Un-Listed Company
Issue by an Indian company or transferred from a resident to non-resident - Price should not be less than	The price worked out in accordance with the relevant SEBI guidelines	The fair value worked out as per any internationally accepted pricing methodology for valuation on an arm’s length basis, duly certified by a Chartered Accountant or a SEBI registered Merchant Banker or a practicing Cost Accountant.
Transfer from a non-resident to resident - Price should not be more than	The price worked out in accordance with the relevant SEBI guidelines	The fair value as per any internationally accepted pricing methodology for valuation on an arm’s length basis, duly certified by a Chartered Accountant or a SEBI registered Merchant Banker.

The pricing guidelines shall not be applicable for investment by a person resident outside India on non-repatriation basis.

Indian Currency

B) Banknotes

11. Who decides on the figure to be printed on a new banknote?

In terms of Section 25 of the RBI Act, the design, form and material of bank notes shall be such as may be approved by the Central Government after consideration of the recommendations made by Central Board.

Biennial survey on Foreign Collaboration in Indian Industry (FCS)

Some other important points to be noted

Q18. Is it required to fill the declaration at the end of the FCS survey schedule?

Ans.: Yes, it is mandatory. Here the person authorised to fill the form owns the responsibility of information furnished and declares its accuracy including CIN number. It is a final check for all the details which are filled-up in the survey schedule of FCS survey.

Core Investment Companies

B. Registration and related matters:

18. Whether CICs that are exempt from registration either because they have an asset size of less than Rs 100 crore or are not accessing public funds are required to register as NBFCs?

Ans: CICs that (a) have an asset size of less than ₹100 crore irrespective of whether they are accessing public funds or not and (b) have an asset size of ₹ 100 crore and above and are not accessing public funds have been exempt from registration with the Bank under Section 45IA of the RBI Act, 1934 in terms of Master Direction DoR(NBFC).PD.003/03.10.119/2016-17 dated August 25, 2016. Thus, they are not required to register with the Bank at all. As this is an exemption given under Section 45NC of the RBI Act, 1934, they are not required to approach the Bank at all.

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

Some important definitions and concepts

Q18. What should not be included under equity securities?

Ans: The following are not included under equity securities:

Equity securities issued by a nonresident enterprise that is related to the resident owner of those securities should be excluded from this survey.
Non-participating preference shares.
Securities acquired under reverse repos.
Securities acquired under borrowing arrangements.

All you wanted to know about NBFCs

C. Definition of deposits, Eligible / Ineligible Institutions to accept deposits and Related Matters

18. Why is the Reserve Bank so restrictive in allowing NBFCs to raise public deposits?

Para 5.1.25 of Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) 2023 (as amended from time to time) defines ‘Owned Fund’ as aggregate of the paid-up equity capital, preference shares which are compulsorily convertible into equity, free reserves, balance in share premium account and capital reserves representing surplus arising out of sale proceeds of asset, excluding reserves created by revaluation of asset; as reduced by accumulated balance of loss, book value of intangible assets and deferred revenue expenditure, if any.
'Net Owned Fund' is defined under Section 45-IA(7) of the RBI Act, 1934. As per this definition, the Net Owned Fund means–
(a) aggregate of the paid-up equity capital and free reserves as disclosed in the latest balance-sheet of the company after deducting there from, accumulated balance of loss, deferred revenue expenditure, and other intangible assets; and

(b) further reduced by the amounts representing investments of such company in shares of its subsidiaries, companies in the same group, all other NBFCs, and the book value of debentures, bonds, outstanding loans & advances (including hire purchase and lease finance) made to, and deposits with subsidiaries of such company and companies in the same group, to the extent such book value exceeds 10% of (a) above.