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Biennial survey on Foreign Collaboration in Indian Industry (FCS)

Some other important points to be noted

Q19. Provide the list of the Fatal and Non-Fatal Errors with their descriptions. +

Ans.: Please refer to the below table containing the error codes (Fatal error, non-Fatal error) with their descriptions. If you get an acknowledgment of the processed data with any Fatal error codes, then follow the below-mentioned fatal error message/description and revise your data and resubmit it on fcs@rbi.org.in. If you get an acknowledgment of the processed data with any Non-fatal error codes then give justification/clarification on the errors, by sending the same to fcsquery@rbi.org.in.

Sr. No.	Revised- Rejection Criteria	Revised - Error Message/descriptions	Error Code
Fatal Error
1	When the year is left blank	The year cannot be left blank. Please specify the reference year and fill the return.	FCS_F_001
2	When the survey year is incorrect	Survey year should be the subsequent survey after the latest closed survey year in the system. Please specify the correct Survey year	FCS_F_001
3	When survey year is null	The survey year cannot be NULL. Please specify the survey year and fill the return.	FCS_F_001
4	When survey year is incorrect	Please specify proper survey year, please fill the form for the survey year	FCS_F_001
5	When survey year is invalid	The year for which the information is pertaining, is invalid survey year. Please mention the reference year for which the return is filled	FCS_F_001
6	When survey year is closed	FCS survey for {year} is closed	FCS_F_001
5	When name of company not provided	Name of company is not provided. Please provide the name of company.	FCS_F_002
6	When CIN Number is not given	CIN number is not provided. Please provide CIN number of the company.	FCS_F_003
7	When telephone number is not given	Please provide the telephone number of contact person.	FCS_F_004
8	When email id is not given	Please provide the email id of the contact person.	FCS_F_005
Non-Fatal Error
1	When type of organization is not given	Please provide the type of organization.	FCS_NF_001
2	Identification of the Reporting company when it is not given	Please specify the Identification of the Reporting company.	FCS_NF_002
3	When economic activity is not given	Please provide the economic activity.	FCS_NF_003
4	Please provide details for country name / equity share.	Please provide details for country name / equity share.	FCS_NF_008
5	When provide details for country name / loan details is not given	Please provide details for country name / loan details.	FCS_NF_009
6	When provide details for country name / amount details is not given	Please provide details for country name / amount details.	FCS_NF_011
7	When the total equity capital of organization is not given	Please provide the total equity capital of the organization.	FCS_NF_004
8	When foreign participation in equity capital cannot be more than total equity capital.	The foreign participation in equity capital cannot be more than total equity capital.	FCS_NF_005_PY
9	When foreign participation in equity capital cannot be more than total equity capital.	The foreign participation in equity capital cannot be more than total equity capital.	FCS_NF_005_CY
10	When foreign participation in equity capital cannot be more than total equity capital.	The foreign participation in equity capital cannot be more than total equity capital.	FCS_NF_005
11	When Field 2: (2a) cannot be blank for both the years as company is foreign subsidiary.	Field 2: (2a) cannot be blank for both the years as company is foreign subsidiary.	FCS_NF_006
12	When Field 2 cannot be blank for both the years as company is foreign associate.	Field 2 cannot be blank for both the years as company is foreign associate.	FCS_NF_007
13	In part II, block 7, Total value of imports (7.1) cannot be less than sum of imports from foreign parent/associate/collaborator (7.1.1) and imports under collaboration arrangement (7.1.2).	In part II, block 7, Total value of imports (7.1) cannot be less than sum of imports from foreign parent/associate/collaborator (7.1.1) and imports under collaboration arrangement (7.1.2).	FCS_NF_012_PY
14	In part II, block 7, Total value of imports (7.1) cannot be less than sum of imports from foreign parent/associate/collaborator (7.1.1) and imports under collaboration arrangement (7.1.2).	In part II, block 7, Total value of imports (7.1) cannot be less than sum of imports from foreign parent/associate/collaborator (7.1.1) and imports under collaboration arrangement (7.1.2).	FCS_NF_012_CY
15	In part II, block 7, Total value of imports (7.1) cannot be less than sum of imports from foreign parent/associate/collaborator (7.1.1) and imports under collaboration arrangement (7.1.2).	In part II, block 7, Total value of imports (7.1) cannot be less than sum of imports from foreign parent/associate/collaborator (7.1.1) and imports under collaboration arrangement (7.1.2).	FCS_NF_012
16	In part II, block 7, Exports of goods (7.2.1) cannot be less than sum of export of goods produced under foreign collaboration agreements (7.2.1.1) and exports to/on behalf of/through foreign collaborator/associate (7.2.1.2).	In part II, block 7, Exports of goods (7.2.1) cannot be less than sum of export of goods produced under foreign collaboration agreements (7.2.1.1) and exports to/on behalf of/through foreign collaborator/associate (7.2.1.2).	FCS_NF_013_PY
17	In part II, block 7, Exports of goods (7.2.1) cannot be less than sum of export of goods produced under foreign collaboration agreements (7.2.1.1) and exports to/on behalf of/through foreign collaborator/associate (7.2.1.2).	In part II, block 7, Exports of goods (7.2.1) cannot be less than sum of export of goods produced under foreign collaboration agreements (7.2.1.1) and exports to/on behalf of/through foreign collaborator/associate (7.2.1.2).	FCS_NF_013_CY
18	In part II, block 7, Exports of goods (7.2.1) cannot be less than sum of export of goods produced under foreign collaboration agreements (7.2.1.1) and exports to/on behalf of/through foreign collaborator/associate (7.2.1.2).	In part II, block 7, Exports of goods (7.2.1) cannot be less than sum of export of goods produced under foreign collaboration agreements (7.2.1.1) and exports to/on behalf of/through foreign collaborator/associate (7.2.1.2).	FCS_NF_013
19	In part II, block 7, Export of services and other foreign exchange earnings (7.2.2) cannot be less than exports to foreign collaborator/associate (7.2.2.1).	In part II, block 7, Export of services and other foreign exchange earnings (7.2.2) cannot be less than exports to foreign collaborator/associate (7.2.2.1).	FCS_NF_014_PY
20	In part II, block 7, Export of services and other foreign exchange earnings (7.2.2) cannot be less than exports to foreign collaborator/associate (7.2.2.1).	In part II, block 7, Export of services and other foreign exchange earnings (7.2.2) cannot be less than exports to foreign collaborator/associate (7.2.2.1).	FCS_NF_014_CY
21	In part II, block 7, Export of services and other foreign exchange earnings (7.2.2) cannot be less than exports to foreign collaborator/associate (7.2.2.1).	In part II, block 7, Export of services and other foreign exchange earnings (7.2.2) cannot be less than exports to foreign collaborator/associate (7.2.2.1).	FCS_NF_014
22	In part II, block 7, Total value of export on f. o. b. basis (7.2) cannot be less than sum of export of goods (7.2.1) and export of services and other foreign exchange earnings (7.2.2).	In part II, block 7, Total value of export on f. o. b. basis (7.2) cannot be less than sum of export of goods (7.2.1) and export of services and other foreign exchange earnings (7.2.2).	FCS_NF_015_PY
23	In part II, block 7, Total value of export on f. o. b. basis (7.2) cannot be less than sum of export of goods (7.2.1) and export of services and other foreign exchange earnings (7.2.2).	In part II, block 7, Total value of export on f. o. b. basis (7.2) cannot be less than sum of export of goods (7.2.1) and export of services and other foreign exchange earnings (7.2.2).	FCS_NF_015_CY
24	In part II, block 7, Total value of export on f. o. b. basis (7.2) cannot be less than sum of export of goods (7.2.1) and export of services and other foreign exchange earnings (7.2.2).	In part II, block 7, Total value of export on f. o. b. basis (7.2) cannot be less than sum of export of goods (7.2.1) and export of services and other foreign exchange earnings (7.2.2).	FCS_NF_015
25	when company has foreign technical collaboration agreements, please provide the number of agreements.	Since your company has foreign technical collaboration agreements, please provide the number of agreements.	FCS_NF_016
26	agreement details by providing information on all fields need to be filled	Please provide the agreement details by providing information on all fields.	FCS_NF_017
27	Incomplete information. Please provide the agreement details for all the foreign technical collaboration agreements mentioned in field 11(b).	Incomplete information. Please provide the agreement details for all the foreign technical collaboration agreements mentioned in field 11(b).	FCS_NF_018

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

19. I have an NCMC card issued by Paytm Payments Bank. Can I add to its balance through top-up, recharge, etc. after March 15, 2024? +

No. After March 15, 2024 you will not be able to top-up or recharge your NCMC card issued by Paytm Payments Bank. 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

Coordinated Portfolio Investment Survey – India

Some important definitions and concepts

Q19. What to report in debt securities?

Ans: Debt securities are negotiable instruments serving as evidence of a debt. They include bills, bonds, notes, negotiable certificates of deposit, commercial paper, debentures, asset-backed securities, money market instruments, and similar instruments normally traded in the financial markets.

External Commercial Borrowings (ECB) and Trade Credits

F. LEVERAGE CRITERIA AND BORROWING LIMIT

19. Can an eligible borrower simultaneously raise both Foreign Currency and INR denominated ECBs? +

Yes, as long as the ECBs are in compliance with the ECB guidelines for the respective currencies as per RBI guidelines. The individual limit will include all ECBs raised, whether in foreign currency or INR.

Retail Direct Scheme

Know Your Customer (KYC) related queries

19. How can I link my bank account with my Retail Direct Gilt (RDG) account? +

To link your bank account, you can either upload a picture of your bank account’s cancelled cheque from where the system will automatically read the required details or enter the bank account details yourself. The system will then transfer a token amount to your account. Confirming this token amount on the next screen will lead to automatic verification and linking.

Domestic Deposits

II. Deposits of Non-Residents Indians (NRIs)

19. Whether banks are permitted to offer differential rate of interest on NRE/ FCNR(B) deposits? +

Yes. Banks are permitted to offer differential rates of interest on NRE term deposits as in the case of domestic term deposits of Rs.15 lakhs and above within the ceiling prescribed. Regarding FCNR(B) deposits, banks are now free to decide the currency wise minimum quantum on which differential rate of interest may be offered subject to the overall ceiling prescribed.

Housing Loans

REVERSE MORTGAGE LOAN

ANNEX +

EXAMPLE OF EMI CALCULATION (PURE FIXED LOAN)

	Amount of Loan		1,000,000.00
	Annual Interest Rate		15.00%
	Number of Payments		120
	Monthly Payment		16,133.50
Number	Payment	Interest	Principal	Balance
0				1,000,000.00
1	16,133.50	12,500.00	3,633.50	996,366.50
2	16,133.50	12,454.58	3,678.91	992,687.59
3	16,133.50	12,408.59	3,724.90	988,962.69
4	16,133.50	12,362.03	3,771.46	985,191.23
5	16,133.50	12,314.89	3,818.61	981,372.62
6	16,133.50	12,267.16	3,866.34	977,506.28
7	16,133.50	12,218.83	3,914.67	973,591.62
8	16,133.50	12,169.90	3,963.60	969,628.02
9	16,133.50	12,120.35	4,013.15	965,614.87
10	16,133.50	12,070.19	4,063.31	961,551.56
11	16,133.50	12,019.39	4,114.10	957,437.46
12	16,133.50	11,967.97	4,165.53	953,271.93
13	16,133.50	11,915.90	4,217.60	949,054.34
14	16,133.50	11,863.18	4,270.32	944,784.02
15	16,133.50	11,809.80	4,323.70	940,460.32
16	16,133.50	11,755.75	4,377.74	936,082.58
17	16,133.50	11,701.03	4,432.46	931,650.12
18	16,133.50	11,645.63	4,487.87	927,162.25
19	16,133.50	11,589.53	4,543.97	922,618.28
20	16,133.50	11,532.73	4,600.77	918,017.51
21	16,133.50	11,475.22	4,658.28	913,359.24
22	16,133.50	11,416.99	4,716.51	908,642.73
23	16,133.50	11,358.03	4,775.46	903,867.27
24	16,133.50	11,298.34	4,835.15	899,032.12
25	16,133.50	11,237.90	4,895.59	894,136.52
26	16,133.50	11,176.71	4,956.79	889,179.73
27	16,133.50	11,114.75	5,018.75	884,160.98
28	16,133.50	11,052.01	5,081.48	879,079.50
29	16,133.50	10,988.49	5,145.00	873,934.50
30	16,133.50	10,924.18	5,209.31	868,725.18
31	16,133.50	10,859.06	5,274.43	863,450.75
32	16,133.50	10,793.13	5,340.36	858,110.39
33	16,133.50	10,726.38	5,407.12	852,703.28
34	16,133.50	10,658.79	5,474.70	847,228.57
35	16,133.50	10,590.36	5,543.14	841,685.43
36	16,133.50	10,521.07	5,612.43	836,073.00
37	16,133.50	10,450.91	5,682.58	830,390.42
38	16,133.50	10,379.88	5,753.62	824,636.81
39	16,133.50	10,307.96	5,825.54	818,811.27
40	16,133.50	10,235.14	5,898.35	812,912.92
41	16,133.50	10,161.41	5,972.08	806,940.83
42	16,133.50	10,086.76	6,046.74	800,894.10
43	16,133.50	10,011.18	6,122.32	794,771.78
44	16,133.50	9,934.65	6,198.85	788,572.93
45	16,133.50	9,857.16	6,276.33	782,296.59
46	16,133.50	9,778.71	6,354.79	775,941.81
47	16,133.50	9,699.27	6,434.22	769,507.58
48	16,133.50	9,618.84	6,514.65	762,992.93
49	16,133.50	9,537.41	6,596.08	756,396.85
50	16,133.50	9,454.96	6,678.54	749,718.31
51	16,133.50	9,371.48	6,762.02	742,956.30
52	16,133.50	9,286.95	6,846.54	736,109.75
53	16,133.50	9,201.37	6,932.12	729,177.63
54	16,133.50	9,114.72	7,018.78	722,158.85
55	16,133.50	9,026.99	7,106.51	715,052.34
56	16,133.50	8,938.15	7,195.34	707,857.00
57	16,133.50	8,848.21	7,285.28	700,571.72
58	16,133.50	8,757.15	7,376.35	693,195.37
59	16,133.50	8,664.94	7,468.55	685,726.82
60	16,133.50	8,571.59	7,561.91	678,164.91
61	16,133.50	8,477.06	7,656.43	670,508.47
62	16,133.50	8,381.36	7,752.14	662,756.33
63	16,133.50	8,284.45	7,849.04	654,907.29
64	16,133.50	8,186.34	7,947.15	646,960.14
65	16,133.50	8,087.00	8,046.49	638,913.64
66	16,133.50	7,986.42	8,147.08	630,766.57
67	16,133.50	7,884.58	8,248.91	622,517.65
68	16,133.50	7,781.47	8,352.03	614,165.63
69	16,133.50	7,677.07	8,456.43	605,709.20
70	16,133.50	7,571.37	8,562.13	597,147.07
71	16,133.50	7,464.34	8,669.16	588,477.91
72	16,133.50	7,355.97	8,777.52	579,700.39
73	16,133.50	7,246.25	8,887.24	570,813.15
74	16,133.50	7,135.16	8,998.33	561,814.82
75	16,133.50	7,022.69	9,110.81	552,704.01
76	16,133.50	6,908.80	9,224.70	543,479.31
77	16,133.50	6,793.49	9,340.00	534,139.31
78	16,133.50	6,676.74	9,456.75	524,682.56
79	16,133.50	6,558.53	9,574.96	515,107.59
80	16,133.50	6,438.84	9,694.65	505,412.94
81	16,133.50	6,317.66	9,815.83	495,597.11
82	16,133.50	6,194.96	9,938.53	485,658.58
83	16,133.50	6,070.73	10,062.76	475,595.81
84	16,133.50	5,944.95	10,188.55	465,407.26
85	16,133.50	5,817.59	10,315.90	455,091.36
86	16,133.50	5,688.64	10,444.85	444,646.51
87	16,133.50	5,558.08	10,575.41	434,071.09
88	16,133.50	5,425.89	10,707.61	423,363.48
89	16,133.50	5,292.04	10,841.45	412,522.03
90	16,133.50	5,156.53	10,976.97	401,545.06
91	16,133.50	5,019.31	11,114.18	390,430.88
92	16,133.50	4,880.39	11,253.11	379,177.77
93	16,133.50	4,739.72	11,393.77	367,784.00
94	16,133.50	4,597.30	11,536.20	356,247.80
95	16,133.50	4,453.10	11,680.40	344,567.40
96	16,133.50	4,307.09	11,826.40	332,741.00
97	16,133.50	4,159.26	11,974.23	320,766.77
98	16,133.50	4,009.58	12,123.91	308,642.85
99	16,133.50	3,858.04	12,275.46	296,367.39
100	16,133.50	3,704.59	12,428.90	283,938.49
101	16,133.50	3,549.23	12,584.26	271,354.23
102	16,133.50	3,391.93	12,741.57	258,612.66
103	16,133.50	3,232.66	12,900.84	245,711.82
104	16,133.50	3,071.40	13,062.10	232,649.72
105	16,133.50	2,908.12	13,225.37	219,424.35
106	16,133.50	2,742.80	13,390.69	206,033.66
107	16,133.50	2,575.42	13,558.07	192,475.58
108	16,133.50	2,405.94	13,727.55	178,748.03
109	16,133.50	2,234.35	13,899.15	164,848.89
110	16,133.50	2,060.61	14,072.88	150,776.00
111	16,133.50	1,884.70	14,248.80	136,527.21
112	16,133.50	1,706.59	14,426.91	122,100.30
113	16,133.50	1,526.25	14,607.24	107,493.06
114	16,133.50	1,343.66	14,789.83	92,703.23
115	16,133.50	1,158.79	14,974.71	77,728.52
116	16,133.50	971.61	15,161.89	62,566.63
117	16,133.50	782.08	15,351.41	47,215.22
118	16,133.50	590.19	15,543.31	31,671.91
119	16,133.50	395.90	15,737.60	15,934.32
120	16,133.50	199.18	15,934.32	0.00

Loan amount x rpm x (1+pm)
(1+pm)

rpm= interest per month (rate of interest per year/12)
n= number of installments

NB: If you have a fixed budget towards EMI you can arrive at loan amount by changing the other variables such as by reducing the rate of interest or by increasing the tenure of loan. This can also be arrived at through EMI calculator by a trial-and-error approach.

Indian Currency

B) Banknotes

11. Who decides on the volume and value of banknotes to be printed and on what basis? +

The volume and value of banknotes to be printed in a year depends on various factors such as (i) the expected increase in Notes in Circulation (NIC) to meet the growing needs of the public and (ii) the need for replacing soiled/mutilated notes so as to ensure that only good quality notes are in circulation. The expected increase in NIC is estimated using statistical models which consider macro-economic factors such as expected growth in GDP, inflation, interest rates, growth in non-cash modes of payment etc. The replacement requirement depends on the volume of notes already in circulation and the average life of banknotes. The Reserve Bank estimates the volume and value of notes to be printed in a year based on the above factors as well as feedback received from its own Regional Offices and banks regarding expected demand for cash and finalises the same in consultation with the Government of India and the printing presses.

Core Investment Companies

Core Investment Companies (CICs)

20. What does the term public funds include? Is it the same as public deposits? +

Ans: Public funds are not the same as public deposits. Public funds include public deposits, inter-corporate deposits, bank finance and all funds received whether directly or indirectly from outside sources such as funds raised by issue of Commercial Papers, debentures etc. However, even though public funds include public deposits in the general course, it may be noted that CICs/CICs-ND-SI cannot accept public deposits.

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

20. Whether the circular on Lending against shares dated August 21, 2014 is applicable to existing loans also? +

The Circular is applicable from the date of the circular and therefore the Circular shall not apply on those transactions which have been entered into prior to the date of the Circular. However, the guidelines will be applicable in case of roll-over/ renewal of loans. Guidelines will not apply to transactions where documents have been executed prior to the date of the circular and disbursement is pending.

Foreign Investment in India

Q.20: Can a foreigner set up a partnership/ proprietorship concern in India ? +

Answer: Only NRIs/ OCIs are allowed to invest in partnership/ proprietorship concerns in India on non-repatriation basis.

FAQs on Non-Banking Financial Companies

Inter-corporate deposits (ICDs)

20. Whether ICDs can be accepted repayable on demand ? +

As per provisions of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998, the prohibition from acceptance of deposits repayable on demand applies to public deposits only. ICDs are not public deposits. As such, ICDs can be accepted repayable on demand or notice.

Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999

Procedure for submission of the FLA return

Q20. Where should we contact regarding any query/ clarification for submission of FLA Return? +

Ans: Any query regarding filling of FLA return should be sent by email. We will revert back to you within one or two working days.

External Commercial Borrowings (ECB) and Trade Credits

F. LEVERAGE CRITERIA AND BORROWING LIMIT

20. Is the enhancement of ECB amount permitted under the delegated powers? +

Yes, provided the enhanced amount does not breach the applicable annual limit for the automatic route for the current financial year and the other parameters of the ECB are in compliance with the existing ECB guidelines also. Since this would be considered as change in terms for the same ECB, no separate LRN is required for the enhanced amount.

Government Securities Market in India – A Primer

20. What is the ‘When Issued’ market and “Short Sale”? +

"When, as and if issued" (commonly known as ‘When Issued’) security refers to a security that has been authorized for issuance but not yet actually issued. When Issued trading takes place between the time a Government Security is announced for issuance and the time it is actually issued. All 'When Issued' transactions are on an 'if' basis, to be settled if and when the actual security is issued. RBI vide its notification FMRD.DIRD.03/14.03.007/2018-19 dated July 24, 2018 has issued When Issued Transactions (Reserve Bank) Directions, 2018 applicable to ‘When Issued’ transactions in Central Government securities.

Both new and reissued Government securities issued by the Central Government are eligible for ‘When Issued’ transactions. Eligibility of an issue for ‘When Issue’ trades would be indicated in the respective specific auction notification. Participants eligible to undertake both net long and short position in ‘When Issued’ market are (a) All entities which are eligible to participate in the primary auction of Central Government securities,(b) However, resident individuals, Hindu Undivided Families (HUF), Non-Resident Indians (NRI) and Overseas Citizens of India (OCI) are eligible to undertake only long position in ‘When Issued’ securities. (c) Entities other than scheduled commercial banks and Primary Dealers (PDs), shall close their short positions, if any, by the close of trading on the date of auction of the underlying Central Government security.

When Issued transactions would commence after the issue of a security is notified by the Central Government and it would cease at the close of trading on the date of auction. All ‘When Issued’ transactions for all trade dates shall be contracted for settlement on the date of issue. When Issued’ transactions shall be undertaken only on the Negotiated Dealing System-Order Matching (NDS-OM) platform. However, an existing position in a ‘When Issued’ security may be closed either on the NDS-OM platform or outside the NDS-OM platform, i.e., through Over-the-Counter (OTC) market. The open position limits are prescribed in the directions. All NDS-OM members participating in the ‘When Issued’ market are required to have in place a written policy on ‘When Issued’ trading which should be approved by the Board of Directors or equivalent body.

"Short sale" means sale of a security one does not own. RBI vide its notification FMRD.DIRD.05/14.03.007/2018-19 dated July 25, 2018 has issued Short Sale (Reserve Bank) Directions, 2018 applicable to ‘Short Sale’ transactions in Central Government dated securities. Banks may treat sale of a security held in the investment portfolio as a short sale and follow the process laid down in these directions. These transactions shall be referred to as ‘notional’ short sales. For the purpose of these guidelines, short sale would include 'notional' short sale.

Entities eligible to undertake short sales are (a) Scheduled commercial banks, (b) Primary Dealers, (c) Urban Cooperative Banks as permitted under circular UBD.BPD (PCB). Circular No.9/09.29.000/2013-14 dated September 4, 2013 and (d) Any other regulated entity which has the approval of the concerned regulator (SEBI, IRDA, PFRDA, NABARD, NHB). The maximum amount of a security (face value) that can be short sold is (a) for Liquid securities: 2% of the total outstanding stock of each security, or, ₹ 500 crore, whichever is higher; (b) for other securities: 1% of the total outstanding stock of each security, or, ₹ 250 crore, whichever is higher. The list of liquid securities shall be disseminated by FIMMDA/FBIL from time to time. Short sales shall be covered within a period of three months from the date of transaction (inclusive of the date). Banks undertaking ‘notional’ short sales shall ordinarily borrow securities from the repo market to meet delivery obligations, but in exceptional situations of market stress (e.g., short squeeze), it may deliver securities from its own investment portfolio. If securities are delivered out of its own portfolio, it must be accounted for appropriately and reflect the transactions as internal borrowing. It shall be ensured that the securities so borrowed are brought back to the same portfolio, without any change in book value.

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

20. Can I transfer the balance from my old NCMC card issued by Paytm Payments Bank to a new card obtained from another Bank? +

Balance transfer feature is not available in the NCMC card. Therefore, you may use the card upto the available balance. In case you have some more balance which you have not been able to use, you may request Paytm Payments Bank for a refund.

Coordinated Portfolio Investment Survey – India

Some important definitions and concepts

Q20. What are long-term debt securities? +

Ans: Debt securities with original maturity of more than one year is classified as long-term debt securities. These include bonds, debentures, and notes that usually give the holder the unconditional right to a fixed cash flow or contractually determined variable money income.

Retail Direct Scheme

Know Your Customer (KYC) related queries

20. What if my KYC process does not get completed in one session? +

Your progress during KYC verification process will be saved so that you do not have to re-enter the details if you start again. The saved progress can be accessed using the link in the email which you received after registration, intimating you about KYC initiation. However, when you start again, you will have to keep clicking on ‘Next’ to move ahead without re-entering the previously saved details.

Domestic Deposits

II. Deposits of Non-Residents Indians (NRIs)

20. What is meant by Reinvestment Deposit? +

Reinvestment deposits are those deposits where interest (as and when due) is reinvested at the same contracted rate till maturity which is withdrawable with the principal amount on maturity date. It is also applicable to domestic deposits.

Indian Currency

B) Banknotes

12. Are the banknotes issued by RBI backed by any assets such as gold? +

All banknotes issued by RBI are backed by assets such as gold, Government Securities and Foreign Currency Assets, as defined in Section 33 of RBI Act, 1934.

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

21. Will the circular on Lending against shares be applicable on restructured accounts? +

No. the Circular will not be applicable on restructured accounts

Foreign Investment in India

Q.21: Can a foreign investor invest in Rights shares issued by an Indian company at a discount ? +

Answer: There are no restrictions under FEMA for investment in Rights shares issued at a discount by an Indian company under the provisions of the Companies Act, 2013. The offer on rights basis to the persons resident outside India shall be:

in case of shares of a company listed on a recognized stock exchange in India, at a price, as determined by the company; and
in case of shares of a company not listed on a recognized stock exchange in India, at a price, which is not less than the price at which the offer on right basis is made to resident shareholders.

FAQs on Non-Banking Financial Companies

Mutual benefit financial companies (nidhis)

21. The nidhi companies have been precluded from accepting deposits in the nature of a Current Account. Whether they can open Savings Bank Account ? +

A. There is no prohibition for Nidhi companies opening Savings Bank Account.

Coordinated Portfolio Investment Survey – India

Some important definitions and concepts

Q21. What are short-term debt securities? +

Ans: Debt securities with original maturity of one year or less is classified as short-term debt securities. Examples of short-term securities are treasury bills, negotiable certificates of deposit, bankers’ acceptances, promissory notes, and commercial paper.

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

Merchants using Paytm Payments Bank to receive payments

21. I am a merchant and I accept payments using a Paytm QR code, Paytm soundbox or Paytm POS terminal, linked to another bank account (not with Paytm Payments Bank). Can I continue to use this set-up even after March 15, 2024? +

Yes. If your receipt and transfer of funds is linked to any bank account other than Paytm Payments Bank, you can continue to use this arrangement even after March 15, 2024.

Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999

Procedure for submission of the FLA return

Q21. How can an entity get approval for revising the previous year returns? +

Ans: Please follow the below given step to revise the FLA return for a previous year:

Visit https://flair.rbi.org.in/fla/faces/pages/login.xhtml → Login to FLAIR → Click on MENU tab on the left-hand side of the homepage → ONLINE FLA FORM → FLA ONLINE FORM → “Please click here to get the approval to fill revised FLA form for current year after due date /previous year” → select "Year" and click on → Click “Request”.

Your request status will be visible in the table below available on the screen. After sending request to RBI through FLA portal, entities need to wait for at least one working day for approval. Entities can check the status of their request in “Multiple Year Enable Screen” under menu on the left corner. Once approved by DSIM, RBI, the entity can revise FLA return for selected year.

External Commercial Borrowings (ECB) and Trade Credits

G. ALL-IN-COST

21. Does all-in-cost ceiling apply on a continuous basis or can it be calculated even on an average basis? +

All-in-cost should be within the applicable ceiling at all times, e.g., breach of all-in-cost ceiling in the first year and a much lower all-in-cost in the second year so as to comply on an average, is not permitted.

Government Securities Market in India – A Primer

21. What are the basic mathematical concepts one should know for calculations involved in bond prices and yields? +

The time value of money functions related to calculation of Present Value (PV), Future Value (FV), etc. are important mathematical concepts related to bond market. An outline of the same with illustrations is provided in Box II below.

BOX II

Time Value of Money

Money has time value as a Rupee today is more valuable and useful than a Rupee a year later.

The concept of time value of money is based on the premise that an investor prefers to receive a payment of a fixed amount of money today, rather than an equal amount in the future, all else being equal. In particular, if one receives the payment today, one can then earn interest on the money until that specified future date. Further, in an inflationary environment, a Rupee today will have greater purchasing power than after a year.

Present value of a future sum

The present value formula is the core formula for the time value of money.

The present value (PV) formula has four variables, each of which can be solved for:

Present Value (PV) is the value at time=0
Future Value (FV) is the value at time=n
i is the rate at which the amount will be compounded each period
n is the number of periods

The cumulative present value of future cash flows can be calculated by adding the contributions of FV_t, the value of cash flow at time=t

An illustration

Taking the cash flows as;

Period (in Yrs)	1	2	3
Amount	100	100	100

Assuming that the interest rate is at 10% per annum;

The discount factor for each year can be calculated as 1/(1+interest rate)^no. of years

The present value can then be worked out as Amount x discount factor

The PV of ₹100 accruing after 3 years:

Year	Amount	discount factor	P.V.
1	100	0.9091	90.91
2	100	0.8264	82.64
3	100	0.7513	75.13

The cumulative present value = 90.91+82.64+75.13 = ₹ 248.69

Net Present Value (NPV)

Net present value (NPV) or net present worth (NPW) is defined as the present value of net cash flows. It is a standard method for using the time value of money to appraise long-term projects. Used for capital budgeting, and widely throughout economics, it measures the excess or shortfall of cash flows, in present value (PV) terms, once financing charges are met.

Formula

Each cash inflow/outflow is discounted back to its present value (PV). Then they are summed. Therefore

Where
t - the time of the cash flow
N - the total time of the project
r - the discount rate (the rate of return that could be earned on an investment in the financial markets with similar risk.)
C_t - the net cash flow (the amount of cash) at time t (for educational purposes, C₀ is commonly placed to the left of the sum to emphasize its role as the initial investment.).

In the illustration given above under the Present value, if the three cash flows accrues on a deposit of ₹ 240, the NPV of the investment is equal to 248.69-240 = ₹ 8.69

Core Investment Companies

Core Investment Companies (CICs)

21. In the definition of public funds, what do the term “indirect receipt of public funds” mean? +

Ans: Indirect receipt of public funds means funds received not directly but through associates and group entities which have access to public funds.

Retail Direct Scheme

Nomination related queries

21. Is nomination compulsory for opening Retail Direct Gilt (RDG) Account? +

Yes.

Domestic Deposits

II. Deposits of Non-Residents Indians (NRIs)

21. Whether FCNR(B) deposits can be renewed from retrospective effect (i.e. from the maturity date)? If yes, what is the rate of interest payable? +

The bank may, at its discretion, renew an overdue FCNR(B) deposit or a portion thereof provided the overdue period from the date of maturity till the date of renewal (both days inclusive), does not exceed 14 days and the rate of interest payable on the amount of the deposit so renewed shall be the appropriate rate of interest for the period of renewal as prevailing on the date of maturity or on the date when the depositor seeks renewal, whichever is lower. In the case of overdue deposits where the overdue period exceeds 14 days, the deposits can be renewed at the prevailing rate of interest on the date when the renewal is sought. If the depositor places the entire amount of overdue deposit or a portion thereof as a fresh FCNR(B) deposit, banks may fix their own interest for the overdue period on the amount so placed as a fresh term deposit. Banks are free to recover the interest so paid for the overdue period if the deposit is withdrawn before completion of minimum stipulated period under the scheme, after renewal.

Indian Currency

C. Different Types of Bank Notes and Security Features of banknotes

1. What are the various types of banknotes issued since independence of India? +

The details are as under:

i. Ashoka Pillar Banknotes:

The first banknote issued by independent India was the one rupee note issued in 1949. While retaining the same designs the new banknotes were issued with the symbol of Lion Capital of Ashoka Pillar at Sarnath in the watermark window in place of the portrait of King George.

The name of the issuer, the denomination and the guarantee clause were printed in Hindi on the new banknotes from the year 1951. The banknotes in the denomination of ₹1000, ₹5000 and ₹10000 were issued in the year 1954. Banknotes in Ashoka Pillar watermark Series, in ₹10 denomination were issued between 1967 and 1992, ₹20 denomination in 1972 and 1975, ₹50 in 1975 and 1981, and ₹100 between 1967-1979. The banknotes issued during the above period, contained the symbols representing science and technology, progress, orientation to Indian Art forms. In the year 1970, banknotes with the legend "Satyameva Jayate", i.e., truth alone shall prevail were introduced for the first time. In October 1987, ₹500, banknote was introduced with the portrait of Mahatma Gandhi and the Ashoka Pillar watermark.

ii. Mahatma Gandhi (MG) Series 1996

The details of banknotes issued in MG Series – 1996 is as under:

Denomination	Month and year of introduction
₹5	November 2001
₹10	June 1996
₹20	August 2001
₹50	March 1997
₹100	June 1996
₹500	October 1997
₹1000	November 2000

All the banknotes of this series bear the portrait of Mahatma Gandhi on the obverse (front) side, in place of symbol of Lion Capital of Ashoka Pillar, which has also been retained and shifted to the left side next to the watermark window. This means that these banknotes contain Mahatma Gandhi watermark as well as Mahatma Gandhi's portrait.

iii. Mahatma Gandhi series – 2005 banknotes

MG series 2005 banknotes were issued in the denomination of ₹10, ₹20, ₹50, ₹100, ₹500 and ₹1000 and contain some additional/new security features as compared to the 1996 MG series. The year of introduction of these banknotes is as under:

Denomination	Month and year of Introduction
₹50 and ₹100	August 2005
₹500 and ₹1000	October 2005
₹10	April 2006
₹20	August 2006

The Legal tender of banknotes of ₹500 and ₹1000 of this series was subsequently withdrawn w.e.f. the midnight of November 8, 2016.

iv. Mahatma Gandhi (New) Series (MGNS) – Nov 2016

The Mahatma Gandhi (New) Series, introduced in the year 2016, highlights the cultural heritage and scientific achievements of the country. The banknotes in the series are more wallet friendly, being of reduced dimensions and hence expected to incur less wear and tear. For the first time, designs for banknotes has been indigenously developed on themes reflecting the diverse history, culture and ethos of the country as also its scientific achievements. The colour scheme is sharp and vivid to make the banknotes distinctive.

The first banknote from the new series was introduced on November 8, 2016 and is a new denomination, ₹2000-with the theme of Mangalyaan. Subsequently, banknotes in this series in denomination of ₹500, ₹200, ₹100, ₹50, ₹20 and ₹10 have also been introduced.

Core Investment Companies

Core Investment Companies (CICs)

22. Can CICs issue guarantees and will this be considered part of definition of public funds? +

Ans: Yes, CICs may be required to issue guarantees or take on other contingent liabilities on behalf of their group entities. Guarantees per se do not fall under the definition of public funds. However, it is possible that CICs which do not accept public funds take recourse to public funds if and when the guarantee devolves. Hence, before doing so, CICs must ensure that they can meet the obligation there under, as and when they arise. In particular, CICs which are exempt from registration requirement must be in a position to do so without recourse to public funds in the event the liability devolves. If unregistered CICs with asset size above Rs. 100 crore access public funds without obtaining a Certificate of Registration (CoR) from RBI, they will be seen as violating Core Investment Companies (Reserve Bank) Directions, 2011 dated January 05, 2011.

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

22. Will the Circular on Lending against shares be applicable on those loans where the primary security is not shares/ units of mutual funds? +

Loans which are against the collateral of multiple securities and it is specifically agreed to in the agreement that primary security would be something other than shares/ units of mutual funds, LTV would not be applicable. However, reporting requirements shall remain. In cases where such differentiation is not made (thereby NBFCs can off-load shares at the instance of a default), LTV would be applicable.

Foreign Investment in India

Q.22: Whether RBI approval is required for renunciation of rights shares ? +

Answer: No, renunciation of rights shares shall be done in accordance with the instructions contained in Para 6.11 of Master Direction - Foreign Investment in India dated January 4, 2018, read with Regulation 6 of FEMA 20(R).

FAQs on Non-Banking Financial Companies

Mutual benefit financial companies (nidhis)

22. Whether the freedom from ceiling on interest rate allowed to the nidhi companies shall continue as hitherto ? +

Yes. However, exemption from the ceiling on interest rate applies only to those nidhi companies which comply with the conditions stipulated by RBI in January 1997 and to which exemption certificates have been issued by RBI.

Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999

Some Useful Definitions

Q22. What is Direct investment? +

Ans: Direct investment is a category of international investment in which a resident entity in one economy [Direct Investor (DI)] acquires a lasting interest in an enterprise resident in another economy [Direct Investment Enterprise (DIE)]. It consists of two components, viz., Equity Capital and Other Capital.

External Commercial Borrowings (ECB) and Trade Credits

G. ALL-IN-COST

22. Can interest during construction stage be paid out of ECB borrowings? +

The definition of all-in-cost prohibiting use of ECB proceeds for payment of interest/charges is not applicable to ECBs raised for project finance and utilised for payment of guarantee fees (like ECA Premium) and interest during construction, provided the said components are part of project cost and capitalised by the borrower.

Government Securities Market in India – A Primer

22. How is the Price of a bond calculated? What is the total consideration amount of a trade and what is accrued interest? +

The price of a bond is nothing but the sum of present value of all future cash flows of the bond. The interest rate used for discounting the cash flows is the Yield to Maturity (YTM) (explained in detail in question no. 24) of the bond. Price can be calculated using the excel function ‘Price’ (please refer to Annex 6).

Accrued interest is the interest calculated for the broken period from the last coupon day till a day prior to the settlement date of the trade. Since the seller of the security is holding the security for the period up to the day prior to the settlement date of the trade, he is entitled to receive the coupon for the period held. During settlement of the trade, the buyer of security will pay the accrued interest in addition to the agreed price and pays the ‘consideration amount’.

An illustration is given below;

For a trade of ₹ 5 crore (face value) of security 8.83% 2023 for settlement date Jan 30, 2014 at a price of ₹100.50, the consideration amount payable to the seller of the security is worked out below:

Here the price quoted is called ‘clean price’ as the ‘accrued interest’ component is not added to it.

Accrued interest:

The last coupon date being Nov 25, 2013, the number of days in broken period till Jan 29, 2014 (one day prior to settlement date i.e. on trade day) are 65.

The accrued interest on ₹100 face value for 65 days	= 8.83 x (65/360)
	= ₹1.5943

When we add the accrued interest component to the ‘clean price’, the resultant price is called the ‘dirty price’. In the instant case, it is 100.50+1.5943 = ₹102.0943

The total consideration amount	= Face value of trade x dirty price
	= 5,00,00,000 x (102.0943/100)
	= ₹ 5,10,47,150

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

Merchants using Paytm Payments Bank to receive payments

22. I am a merchant and I accept payments using a Paytm QR code, Paytm soundbox, Paytm POS terminal linked to my bank account or wallet with Paytm Payments Bank. Can I continue to use this set-up even after March 15, 2024? +

No. After March 15, 2024 you will not be able to receive any credit into your bank account or wallet with Paytm Payments Bank other than refunds, cashbacks, sweep-in from partner banks or interest. In order to avoid any inconvenience or disruption, it is suggested that you may obtain a fresh QR code linked to an account with another bank or wallet to receive payments. You may also change your bank account details (in which you receive payments) through your service provider

Coordinated Portfolio Investment Survey – India

Some important definitions and concepts

Q22. At what value should we report the securities - face value or market value? +

Ans: Equity securities should be reported at market prices converted to domestic currency using the exchange rate prevailing at March 31/ September 30, [Year]. For enterprises listed on a stock exchange, the market value of your holding of the equity securities should be calculated using the market price on the main stock exchange prevailing at March 31/ September 30, [Year]. For unlisted enterprises, if a market value is not available at the close of business on March 31/ September 30, [Year], estimate of the market value of your holding of equity securities can be calculated by using one of the six alternatives methods given in Q23.

Debt securities should be recorded at market prices converted to domestic currency, using the exchange rate prevailing at the close of business on March 31/ September 30, [Year]. For listed debt securities, a quoted traded market price at the close of business on March 31/ September 30, [Year], should be used. When market prices are unavailable (e.g., in the case of unlisted debt securities), the following methods for estimating fair value (which is an approximation of the market value of such instruments) should be used:

discounting future cash flows to the present value using a market rate of interest and
using market prices of financial assets and liabilities that are similar.

Retail Direct Scheme

Nomination related queries

22. How many nominees can be entered? +

Upto two nominees.

Domestic Deposits

II. Deposits of Non-Residents Indians (NRIs)

22. Whether interest rate stipulations applicable to loans in rupees under FCNR(B) schemes are applicable to loans denominated in foreign currency? +

No. Interest rate stipulations applicable to loans in rupees under FCNR(B) scheme are not applicable to loans denominated in foreign currency which are governed by the instructions issued by Foreign Exchange Department of RBI.

Indian Currency

C. Different Types of Bank Notes and Security Features of banknotes

2. Which denomination banknotes have been demonetised? +

₹500, ₹1000 and ₹10000 banknotes, which were then in circulation were demonetized in January 1946. The higher denomination banknotes in ₹1000, ₹5000 and ₹10000 were reintroduced in the year 1954, and these banknotes (₹1000, ₹5000 and ₹10000) were again demonetized in January 1978.

Recently, banknotes in the denomination of ₹500 and ₹1000 issued under the Mahatma Gandhi Series have been withdrawn from circulation with effect from the midnight of November 08, 2016 and are, therefore, no more legal tender.

As regards prohibition on holding, transferring or receiving specified bank notes, Section 5 of The Specified Banknotes (Cessation of Liabilities) Act, 2017 reads as under:

On and from the appointed day, no person shall, knowingly or voluntarily, hold, transfer or receive any specified bank note:

Provided that nothing contained in this section shall prohibit the holding of specified bank notes—

(a) by any person—

(i) up to the expiry of the grace period; or

(ii) after the expiry of the grace period,—

not more than ten notes in total, irrespective of the denomination; or
not more than twenty-five notes for the purposes of study, research or numismatics;

(b) by the Reserve Bank or its agencies, or any other person authorised by the Reserve Bank;

Directions and Circulars issued by RBI from time to time in connection with SBNs are available on our website www.rbi.org.in under Function wise sites>>Issuer of Currency>>All You Wanted Know About SBNs. All You wanted to know from RBI about Withdrawal of Legal Tender Status of ₹ 500 and ₹ 1000 Notes

Core Investment Companies

Core Investment Companies (CICs)

23. What is a Group company? +

Ans: For the purposes of determining whether a company is a CIC/CIC-ND-SI, ‘companies in the group’ have been exhaustively defined in para 3(1) b of Notification No. DNBS. (PD) 219/CGM(US)-2011 dated January 5, 2011 as “an arrangement involving two or more entities related to each other through any of the following relationships, viz.,Subsidiary – parent (defined in terms of AS 21), Joint venture (defined in terms of AS 27), Associate (defined in terms of AS 23), Promoter-promotee [as provided in the SEBI (Acquisition of Shares and Takeover) Regulations, 1997] for listed companies, a related party (defined in terms of AS 18) Common brand name, and investment in equity shares of 20% and above).”

All you wanted to know about NBFCs

B. Entities Regulated by RBI and applicable regulations

23. Whether LTV for loans issued against the collateral of shares is to be computed at scrip level or at portfolio level ? +

LTV would be computed at portfolio level.

Foreign Investment in India

Q.23: Can an AD bank allow pledge of shares of an Indian company held by non-resident investor in favour of an Indian bank or an overseas bank or an NBFC ? +

Answer: Yes, subject to conditions laid down in para 7.11 of the Master Direction on Foreign Investment in India.

FAQs on Non-Banking Financial Companies

Classification of NBFCs into sub-groups

23. The new norms for classification of an NBFC into equipment leasing and/or hire purchase finance company require it to attain not less than 60 per cent of its assets and derive 60 per cent of its income from these two activities taken together. What is the relevant date when the classification of the existing companies should be reviewed? +

The new classification norms shall come into effect on the basis of NBFCs Balance Sheet as on March 31, 1999. The classification of an NBFC into a specific sub-group is decided on the basis of its principal business as disclosed in its latest audited Balance Sheet and Profit & Loss Account.

Annual Return on Foreign Liabilities and Assets (FLA) under FEMA 1999

Some Useful Definitions

Q23. What is meant by “Equity Capital” under Direct Investment? +

Ans: It covers (1) foreign equity in branches and all shares (except non-participating preference shares) in subsidiaries and associates; (2) contributions such as the provision of machinery, land & building(s) by a direct investor to a DIE by equity participation; (3) acquisition of shares by a DIE in its direct investor company, termed as reverse investment (i.e. claims on DI).