Weekly Round-up | Updates
1. Regulatory Updates
1.1. India
1.1.1. Levy of charges on forex prepaid cards/store value cards, etc., to be in rupees only
Reserve Bank of India (RBI) has instructed Authorized Dealers who have been levying certain fees/charges in foreign currency, which are payable in India on such instruments, to be denominated and settled in rupees only. RBI
1.1.2. RBI imposed monetary penalties on several banks-
| Name of the Entity | Penalty Imposed | Reason |
| Hong Kong and Shanghai Banking Corporation Limited | INR 1,73,75,000/- (Indian Rupees One Crore Seventy-Three Lakhs and Seventy-Five Thousand only) | Contravention of Rule 20(1) of Credit Information Companies Rules, 2006 (“CIC Rules”) to the extent that it furnished incorrect credit information in respect of expired credit cards with nil dues, to all four Credit Information Companies. |
| Trichur Urban Co-operative Bank Ltd., Thrissur, Kerala | INR 2.00 lakh (Indian Rupees Two lakh only) | Non-compliance with directions issued by RBI on Management of Advance- UCBs |
| Bhilai Nagarik Sahakari Bank Maryadit, Bhilai (Chhattisgarh) | INR 1.25 lakh (Indian Rupees One lakh twenty-five thousand only) | Contravention of/non-compliance with the provisions of the Banking Regulation Act, 1949 (the Act) and the Depositor Education and Awareness Fund Scheme, 2014 (the Scheme) as the bank had not transferred eligible unclaimed deposits to the Depositor Education and Awareness Fund within due date. |
| Canara Bank | INR 2.92 crore (Rupees Two crore ninety-two lakh only) | Non-compliance with the provisions of directions issued by the Reserve Bank under ‘Reserve Bank of India (Interest Rate on Advances) Directions, 2016’, Reserve Bank of India (Interest Rate on Deposits) Directions, 2016, ‘Compliance function in banks’, ‘Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’, ‘Customer Service in Banks’ and ‘Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016’ |
1.1.1. 14 Non-Banking Financial Companies (NBFCs) surrender their Certificate of Registration to RBI
14 NBFCs surrendered their Certificate of Registration (CoR) granted to them by RBI due to i) exit from NBFC business; ii) meeting the criteria prescribed for unregistered Core Investment Companies (CIC) that do not require registration; and iii) ceasing to be a legal entity due to amalgamation/merger/dissolution/ voluntary strike-off, etc. RBI
1.1.2. RBI cancels Certificate of Registration of 7 NBFCs
RBI in the exercise of powers conferred to it under Section 45 – IA (6) of the Reserve Bank of India Act, 1934, has cancelled the Certificate of Registration of seven companies and these companies shall cease to transact the business of an NBFC. RBI
1.2. Bangladesh
1.2.1. Clarification of applicable tax rate on digital marketing and advertisement broadcasting services under Section 56 of the Income Tax Ordinance 1984
Banks in Bangladesh have been deducting tax at different rates in case of outward remittances to non-resident institutions for digital marketing and advertisement broadcasting services. The National Board of Revenue has clarified the applicable tax rate against the said services and the same shall be implemented by such banks by June 30th 2023. Bangladesh Bank
2. Trends
2.1. Razorpay to shift its headquarters to India
Razorpay has initiated the process to shift its American-based parent entity back to India. The company had domiciled itself in the United States of America in order to raise funds. Razorpay shall be the second such major startup after PhonePe to shift its base to India in the recent past. BWDisrupt
2.2. Profectus Capital gets RBI’ nod to provide factoring services to MSMEs
Profectus Capital, an NBFC has received the Certificate of Registration (CoR) under the Factoring Regulations Act, 2011 from RBI to provide factoring services to micro, small and medium enterprises (MSMEs). The company plans to offer timely and efficient factoring services to improve working capital management, receive short-term finance to fund operations and boost the business of such MSMEs. Financial Express
2.3. Parminder Chopra, the first woman to lead India’s largest NBFC
Parminder Chopra has been recommended by Public Enterprise Selection Board (PESB) to succeed as the next Chairman and Managing Director (CMD) of Power Finance Corporation (PFC) which is a Maharatna company and also India’s largest NBFC by net worth. She has been with the company since 2005 and has been on the board of the company as well as serving as Director (Finance) and CFO since 2020. The Hindu Business Line
2.4. Enforcement Directorate (ED) raids can hit Manappuram Finance stock price hard
ED’s recent investigations against Manappuram Finance Managing Director and Chief Executive Officer (MD & CEO) V.P. Nandakumar could lead to a further correction in the share price of the gold loan NBFC, and affect its ability to raise funds, analysts said. Financial Express
3. Sector Overview
3.1. ED begins inquiry on 2 FIRs filed against Chinese loan apps misusing RBI’s Circular
3.4. HDFC Bank’s NBFC arm confirms data leak of customers
4. Business Updates
4.1. RBI grants NBFC license to GetVantage
GetVantage, a fintech platform offering alternative financial solutions, has obtained a Non-Banking Financial Company (“NBFC”) registration from RBI for its subsidiary called GetGrowth Capital. GetVantage has planned to raise a total of INR 200 crore (Indian Rupees Two Hundred Crores only) to expand its lending operations further and already has an array of investors such as Chiratae Ventures, InCred, Sony and DI. Adda24/7 Current Affairs
4.2. BetterPlace acquires fintech lending startup Bueno Finance
BetterPlace has merged with Bueno Finance to provide loans to blue-collar workers. Both Bueno Finance and BetterPlace operate in the same segment catering to a blue-collared workforce and have Swiggy and Zomato as their Clients. Mint
Disclaimer
The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.
