Monthly Archives: March 2020

Up & Down

upand down

Up & Down, a Czech film (2004) directed by Jan Hrebejk and starring Petr Forman, Ingrid Timkova, Kristyna Liska Bokova, Jan Triska, Natasa Burger among others. Two truck drivers are involved in cross border human trafficking. In one such move, they leave some Indian immigrants inside the Czech border in their truck. Unfortunately one baby gets left behind. Miluska (Natasa Burger) desperately wants a baby, she wants to become a mother, her husband is unable to become a father and they cannot adopt because of his police record. In parallel, there is a family undergoing a crisis of sorts. An eminent professor is about to die, but not before some emotional wrangling. He wants to divorce his wife and calls his son over from Australia when he has a heart attack. His present love (Ingrid Timkova) and daughter (Kristyna) and his first wife have some issues. Its a comedy of sorts, a light comedy. There is a racial kinda thing going on, because the baby is brown and these guys are white. Good movie to watch,  acting is good, direction also. Story moves along nicely. Whole lotta things gets sorted out in the end.

Leave a comment

Filed under cinema

Companies Fresh Start Scheme 2020

MCA has issued a circular dated 30th March, 2020 wherein it has given companies a one time opportunity to file old forms without any additional filing fee between 1st April 2020 and 30th September, 2020. Immunity from launch of prosecution or proceedings for imposing penalty shall be provided only to the extent of delay in filings and not with substantive violation of law. Any other consequential proceedings including proceedings involved interest of shareholders vis-a-vis the company concerned shall not be covered by the immunity.

Where the company has filed an appeal against a notice issued by the ROC for violation of the provisions of the Act with respect to delay in filings, then the company should first withdraw the appeal before filing for immunity under this Scheme. But this is applicable only with respect to statutory filing under the Act and will not apply in cases where company has filed a petition before the NCLT where the company has been struck off under the provisions of section 248 of the Act, due to non conduct of any business activities for two years consecutively, for revival of the company. Also it is not clear where companies have been under strike off due to non filings and their directors DIN disqualified – whether the disqualifications would be removed so that they can do the filings. Ideally that should happen so that companies in the fault can then revive their companies with little cost involved. There are many such companies in that category and it would be great if MCA can redress that aspect.

Where orders have been passed against the company for non filings and penalties levied but the appeals could not be lodged and if the last date for filing appeal falls between March to May 2020 then a period of 120 additional days shall be provided to that company to file its appeal to the relevant authorities. During that 120 days additional period no action shall be taken against the company concerned in so far as it pertains to delay in filing

Companies who have taken advantage of this fresh start scheme have to further file an immunity form called CFSS-2020. This is required to be filed only after closure of the Scheme AND after all the forms have been taken on record or approved by the MCA but not before 6 months from the closure of the scheme. There shall be no immunity in case of appeal pending before any court of law or in respect of management disputes in the company before any court or tribunal. Also there is no immunity where the court has already ordered conviction OR an order imposing penalty has been passed and no appeal has been preferred against such orders before the Scheme has come into force.

This Scheme will not apply in following cases

a) company against which final notice for strike off has already been initiated u/s 248 of the Act;

b) where strike off application has already been made by the company;

c) companies which have been amalgamated under a scheme of amalgamation or compromise under the Act;

d) where company has filed application for obtaining Dormant status for the company under section 455 of the Act;

e) to vanishing companies;

f) to forms for increase in authorised share capital (SH-7) or charge related documents

After the immunity is granted, the ROC/ RD shall withdraw the prosecution proceedings, if any, pending before the concerned court and prosecution for adjudication of penalties u/s 454 of the Act, other than those where the court has already ordered conviction or penalty has been imposed by the court/ tribunal or adjudicating authority.

Further the defaulting inactive companies can, after all the filings have been made uptodate, take advantage of the dormant company provisions or strike off company provisions under the Act.

Click to access Circular12_30032020.pdf

 

 

 

Simultaneously a LLP settlement scheme is also running for delayed filings of form 3 & 4

1 Comment

Filed under company law

Go With Le Flo

gowith

Go With Le Flo, a German-French movie (2014), directed by Michael Glover and starring Denis Aubert, Marina Senckel, Luisa Witzorek among others. Florian (Denis) is a half French half German baker owning Le Flo a cafe in Berlin. His best friend Jenny (Marina) is owning another bakery opposite him and yearns for him. But Florian is madly in love with Camille, a director’s daughter who does not love him but pities him. She is already engaged to an actor. Its a fun movie with lot of escapades. Both Denis and Marina have done good roles.

Leave a comment

Filed under cinema

Storm Warning

storm

Storm Warning or Fraulein: Una Fiaba d’inverno an Italian film (2016) starring Christian De Sica, Lucia Mascino among others. A solar storm causes surges in an Italian village leading to power shortages & outages. Regina (Lucia Mascino) is a lonely spinster, 41 years old, staying in a hotel which has been closed for years. She is grumpy, cranky, cantankerous enough for people to bitch about her in the small village. She is woed by the local post office guy. One night a mysterious visitor comes from somewhere. He has secrets of his. Walter (Christian) had stayed in this same hotel immediately after his marriage. He is not happy with his family and has in fact run away from his home. He has his own sadness. Slowly something sparks between Regina and Walter, she opens up, starts smiling, dresses up, he also loosens up his sadness, becomes joyful, dances gaily, Nice movie with the storm being used as a metaphor. Nice pace for the movie. Both Christian and Lucia have acted really well.

Leave a comment

Filed under cinema

small finance banks

https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=11845&Mode=0

‘Guidelines for Licensing of Small Finance Banks in Private Sector’ dated November 27, 2014 – Modifications to existing norms

Please refer to the ‘Guidelines for Licensing of Small Finance Banks in Private Sector’ dated November 27, 2014 under which licenses were issued to 10 Small Finance Banks (SFBs) and the ‘Guidelines for ‘on-tap’ Licensing of Small Finance Banks in Private Sector’ released by Reserve Bank on December 5, 2019.

2. To harmonise the instructions for existing SFBs with those SFBs to be licensed under ‘Guidelines for ‘on-tap’ Licensing’, it has been decided to:

  1. Grant general permission to all existing SFBs to open banking outlets subject to adherence to Unbanked Rural Centre norms as per RBI circular on ‘Rationalisation of Branch Authorisation Policy – Revision of Guidelines’ dated May 18, 2017, as amended from time to time.
  2. Exempt all existing SFBs from seeking prior approval of Reserve Bank for undertaking such non risk sharing simple financial service activities, which do not require any commitment of own fund, after three years of commencement of business of SFB.

3. Further, in case of existing SFBs, it is clarified that –

  1. Whether a promoter could cease to be a promoter or could exit from the bank after completion of a period of five years, would depend on the RBI’s regulatory and supervisory comfort / discomfort and SEBI regulations in this regard at that time (Reference: Response to query number 101 of ‘Clarifications to queries on guidelines for licensing of Small Finance Banks in the Private Sector’ dated January 1, 2015).
  2. The phrase ‘paid-up equity capital’ in ‘Guidelines for Licensing of SFBs in Private Sector – 2014’ means ‘paid-up voting equity capital’ (Reference: Response to query number 104 of ‘Clarifications to queries on guidelines for licensing of Small Finance Banks in the Private Sector’ dated January 1, 2015).

4. The provisions of this circular shall come into force with immediate effect.

Leave a comment

Filed under Uncategorized

Payment Aggregators & Gateways

https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=11822&Mode=0

This has reference to Reserve Bank of India (RBI) circular DPSS.CO.PD.No.1102/02.14.08/2009-10 dated November 24, 2009 on ‘directions for opening and operation of accounts and settlement of payments for electronic payment transactions involving intermediaries’.

2. A reference is also invited to the discussion paper placed on the RBI website on guidelines for regulation of Payment Aggregators (PAs) and Payment Gateways (PGs). Based on the feedback received and taking into account the important functions of these intermediaries in the online payments space as also keeping in view their role vis-à-vis handling funds, it has been decided to (a) regulate in entirety the activities of PAs as per the guidelines in Annex 1, and (b) provide baseline technology-related recommendations to PGs as per Annex 2.

3. Detailed guidelines to this end are appended. It may be noted that these guidelines are issued under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 and shall come into effect from April 1, 2020 other than for activities for which specific timelines are mentioned.

Yours faithfully,

(P. Vasudevan)
Chief General Manager

Encl. : As above


Annex 1

Guidelines on Regulation of Payment Aggregators and Payment Gateways
(DPSS.CO.PD.No.1810/02.14.008/2019-20 dated March 17, 2020)

Payment Aggregators (PAs) and Payment Gateways (PGs) are intermediaries playing an important function in facilitating payments in the online space.

1. Definitions

1.1. For the purpose of this circular, the PAs and PGs are defined as under:

1.1.1. PAs are entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers for completion of their payment obligations without the need for merchants to create a separate payment integration system of their own. PAs facilitate merchants to connect with acquirers. In the process, they receive payments from customers, pool and transfer them on to the merchants after a time period.

1.1.2. PGs are entities that provide technology infrastructure to route and facilitate processing of an online payment transaction without any involvement in handling of funds.

1.2. In the processing of an online transaction the following timelines are involved:

  • ‘Tp’ – date of charge / debit to the customer’s account against the purchase of goods / services.
  • ‘Ts’ – date of intimation by the merchant to the intermediary about shipment of goods.
  • ‘Td’ – date of confirmation by the merchant to the intermediary about delivery of goods to the customer.
  • ‘Tr’ – date of expiry of refund period as fixed by the merchant.

2. Applicability

2.1. The guidelines shall be applicable to PAs. PAs shall also adopt the technology-related recommendations provided in Annex 2. As a measure of good practice, the PGs may adhere to these baseline technology-related recommendations.

2.2. Domestic leg of import and export related payments facilitated by PAs shall also be governed by these instructions.

2.3. The guidelines are not applicable to Cash on Delivery (CoD) e-commerce model.

3. Authorisation

3.1. The criteria of authorisation has been arrived at based on the role of the intermediary in handling of funds.

3.2. Bank and non-bank PAs handle funds as part of their activities. Banks, however, provide PA services as part of their normal banking relationship and do not therefore require a separate authorisation from RBI. Non-bank PAs shall require authorisation from RBI under the Payment and Settlement Systems Act, 2007 (PSSA).

3.3. PA shall be a company incorporated in India under the Companies Act, 1956 / 2013. The Memorandum of Association (MoA) of the applicant entity must cover the proposed activity of operating as a PA.

3.4. Existing non-bank entities offering PA services shall apply for authorisation on or before June 30, 2021. They shall be allowed to continue their operations till they receive communication from RBI regarding the fate of their application.

3.5. Entities seeking authorisation as PA from the RBI under the PSS Act, shall apply in Form A to the Department of Payment and Settlement Systems (DPSS), RBI, Central Office, Mumbai. Entities regulated by any of the financial sector regulators shall apply along with a ‘No Objection Certificate’ from their respective regulator, within 45 days of obtaining such a clearance.

3.6. E-commerce marketplaces providing PA services shall not continue this activity beyond the deadline prescribed at clause 3.4 above. If they desire to pursue this activity, it shall be separated from the marketplace business and they shall apply for authorisation on or before June 30, 2021.

3.7. PGs shall be considered as ‘technology providers’ or ‘outsourcing partners’ of banks or non-banks, as the case may be. In case of a bank PG, the guidelines issued by Reserve Bank of India, Department of Regulation (DoR) vide circular No.DBOD.NO.BP.40/21.04.158/2006-07 dated November 3, 2006 on “Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks” and other follow up circular(s) shall also be applicable.

4. Capital Requirements

4.1. PAs existing as on the date of this circular shall achieve a net-worth of ₹15 crore by March 31, 2021 and a net-worth of ₹25 crore by the end of third financial year, i.e., on or before March 31, 2023. The net-worth of ₹25 crore shall be maintained at all times thereafter.

4.2. New PAs shall have a minimum net-worth of ₹15 crore at the time of application for authorisation and shall attain a net-worth of ₹25 crore by the end of third financial year of grant of authorisation. The net-worth of ₹25 crore shall be maintained at all times thereafter.

4.3. Illustratively,

Non-bank Entity Date of Application / Authorisation Date of Achieving ₹ 15 Cr. Net-worth Date of Achieving ₹ 25 Cr. Net-worth
Existing PAs Up to 30/06/2021 Date of application or 31/03/2021 whichever is earlier 31/03/2023
New PAs 20/03/2020
01/04/2020
01/03/2021
01/04/2021
On date of application 31/03/2022
31/03/2023
31/03/2023
31/03/2024

4.4. Net-worth shall consist of paid-up equity capital, preference shares that are compulsorily convertible to equity, free reserves, balance in share premium account and capital reserves representing surplus arising out of sale proceeds of assets but not reserves created by revaluation of assets adjusted for accumulated loss balance, book value of intangible assets and deferred revenue expenditure, if any. Compulsorily convertible preference shares can be either non-cumulative or cumulative, and they should be compulsorily convertible into equity shares and the shareholder agreements should specifically prohibit any withdrawal of this preference capital at any time.

4.5. Entities having Foreign Direct Investment (FDI) shall be guided by the Consolidated Foreign Direct Investment policy of the Government of India and the relevant foreign exchange management regulations on this subject.

4.6. PAs shall submit a certificate in the enclosed format from their Chartered Accountants (CA) to evidence compliance with the applicable net-worth requirement while submitting the application for authorisation. Newly incorporated non-bank entities which may not have an audited statement of financial accounts shall submit a certificate in the enclosed format from their Chartered Accountants regarding the current net-worth along with provisional balance sheet.

4.7. PAs that are not able to comply with the net-worth requirement within the stipulated time frame (as given at clauses 4.1 & 4.2) shall wind-up payment aggregation business. The banks maintaining nodal / escrow accounts of such entities shall monitor and report compliance in this regard.

5. Governance

5.1. PAs shall be professionally managed. The promoters of the entity shall satisfy the fit and proper criteria prescribed by RBI. The directors of the applicant entity shall submit a declaration in the enclosed format. RBI shall also check ‘fit and proper’ status of the applicant entity and management by obtaining inputs from other regulators, government departments, etc., as deemed fit. Applications of those entities not meeting the eligibility criteria, or those which are incomplete / not in the prescribed form with all details, shall be returned.

5.2. Any takeover or acquisition of control or change in management of a non-bank PA shall be communicated by way of a letter to the Chief General Manager, Department of Payment and Settlement Systems (DPSS), RBI, Central Office, Mumbai within 15 days with complete details, including ‘Declaration and Undertaking’ by each of the new directors, if any. RBI shall examine the ‘fit and proper’ status of the management and, if required, may place suitable restrictions on such changes.

5.3. Agreements between PAs, merchants, acquiring banks, and all other stake holders shall clearly delineate the roles and responsibilities of the involved parties in sorting / handling complaints, refund / failed transactions, return policy, customer grievance redressal (including turnaround time for resolving queries), dispute resolution mechanism, reconciliation, etc.

5.4. PAs shall disclose comprehensive information regarding merchant policies, customer grievances, privacy policy and other terms and conditions on the website and / or their mobile application.

5.5. PAs shall have a Board approved policy for disposal of complaints / dispute resolution mechanism / time-lines for processing refunds, etc., in such a manner that the RBI instructions on Turn Around Time (TAT) for resolution of failed transactions issued vide DPSS.CO.PD No.629/02.01.014/2019-20 dated September 20, 2019 are adequately taken care of. Any future instructions in this regard shall also be adhered to by PAs.

5.6. PAs shall appoint a Nodal Officer responsible for regulatory and customer grievance handling functions. PAs shall prominently display details of the nodal officer on their website.

6. Safeguards against Money Laundering (KYC / AML / CFT) Provisions

6.1. The Know Your Customer (KYC) / Anti-Money Laundering (AML) / Combating Financing of Terrorism (CFT) guidelines issued by the Department of Regulation, RBI, in their “Master Direction – Know Your Customer (KYC) Directions” updated from time to time, shall apply mutatis mutandis to all entities.

6.2. Provisions of Prevention of Money Laundering Act, 2002 and Rules framed thereunder, as amended from time to time, shall also be applicable.

7. Merchant On-boarding

7.1. PAs shall have a Board approved policy for merchant on-boarding.

7.2. PAs shall undertake background and antecedent check of the merchants, to ensure that such merchants do not have any malafide intention of duping customers, do not sell fake / counterfeit / prohibited products, etc. The merchant’s website shall clearly indicate the terms and conditions of the service and time-line for processing returns and refunds.

7.3. PAs shall be responsible to check Payment Card Industry-Data Security Standard (PCI-DSS) and Payment Application-Data Security Standard (PA-DSS) compliance of the infrastructure of the merchants on-boarded.

7.4. Merchant site shall not save customer card and such related data. A security audit of the merchant may be carried out to check compliance, as and when required.

7.5. Agreement with merchant shall have provision for security / privacy of customer data. PAs agreement with merchants shall include compliance to PA-DSS and incident reporting obligations. The PAs shall obtain periodic security assessment reports either based on the risk assessment (large or small merchants) and / or at the time of renewal of contracts.

8. Settlement and Escrow Account Management

8.1. Non-bank PAs shall maintain the amount collected by them in an escrow account with any scheduled commercial bank. For the purpose of maintenance of the escrow account, the operations of PAs shall be deemed to be ‘designated payment systems’ under Section 23A of the PSSA (as amended in 2015).

8.2. Escrow account balance shall be maintained with only one scheduled commercial bank at any point of time. In case there is a need to shift the escrow account from one bank to another, the same shall be effected in a time-bound manner without impacting the payment cycle to the merchants under advise to RBI.

8.3. Amounts deducted from the customer’s account shall be remitted to the escrow account maintaining bank on Tp+0 / Tp+1 basis. The same rules shall apply to the non-bank entities where wallets are used as a payment instrument.

8.4. Final settlement with the merchant by the PA shall be effected as under:

8.4.1. Where PA is responsible for delivery of goods / services the payment to the merchant shall be not later than on Ts + 1 basis.

8.4.2. Where merchant is responsible for delivery, the payment to the merchant shall be not later than on Td + 1 basis.

8.4.3. Where the agreement with the merchant provides for keeping the amount by the PA till expiry of refund period, the payment to the merchant shall be not later than on Tr + 1 basis.

8.5. Credits towards reversed transactions (where funds are received by PA) and refund transactions shall be routed back through the escrow account unless as per contract the refund is directly managed by the merchant and the customer has been made aware of the same.

8.6. At the end of the day, the amount in escrow account shall not be less than the amount already collected from customer as per ‘Tp’ or the amount due to the merchant.

8.7. PAs shall be permitted to pre-fund the escrow account with own / merchant’s funds. However, in the latter scenario, merchant’s beneficial interest shall be created on the pre-funded portion.

8.8. The escrow account shall not be operated for ‘Cash-on-Delivery’ transactions.

8.9. Permitted credits / debits to the escrow account shall be as set out below:

8.9.1.1. Credits

a) Payment from various customers towards purchase of goods / services.

b) Pre-funding by merchants / PAs.

c) Transfer representing refunds for failed / disputed / returned / cancelled transactions.

d) Payment received for onward transfer to merchants under promotional activities, incentives, cash-backs etc.

8.9.1.2. Debits

a) Payment to various merchants / service providers.

b) Payment to any other account on specific directions from the merchant.

c) Transfer representing refunds for failed / disputed transactions.

d) Payment of commission to the intermediaries. This amount shall be at pre-determined rates / frequency.

e) Payment of amount received under promotional activities, incentives, cash-backs, etc.

8.10. For banks the outstanding balance in the escrow account shall be part of the ‘net demand and time liabilities’ (NDTL) for the purpose of maintenance of reserve requirements. This position shall be computed on the basis of the balances appearing in the books of the bank as on the date of reporting.

8.11. The entity and the escrow account banker shall be responsible for compliance with RBI instructions issued from time to time. The decision of RBI in this regard shall be final and binding.

8.12. Settlement of funds with merchants shall not be co-mingled with other business, if any, handled by the PA.

8.13. A certificate signed by the auditor(s), shall be submitted by the authorised entities to the respective Regional Office of DPSS, RBI, where the registered office of the PA is situated, certifying that the entity has been maintaining balance in the escrow account in compliance with these instructions, as per the periodicity prescribed in Annex 3.

8.14. PAs shall submit the list of merchants acquired by them to the bank where they are maintaining the escrow account and update the same from time to time. The bank shall ensure that payments are made only to eligible merchants / purposes. There shall be an exclusive clause in the agreement signed between the PA and the bank maintaining escrow account towards usage of balance in escrow account only for the purposes mentioned above.

8.15. No interest shall be payable by the bank on balances maintained in the escrow account, except when the PA enters into an agreement with the bank maintaining the escrow account, to transfer “core portion” of the amount, in the escrow account, to a separate account on which interest is payable, subject to the following:

8.15.1. The bank shall satisfy itself that the amount deposited represents the “core portion” after due verification of necessary documents.

8.15.2. The amount shall be linked to the escrow account, i.e. the amounts held in the interest-bearing account shall be available to the bank, to meet payment requirements of the entity, in case of any shortfall in the escrow account.

8.15.3. This facility shall be permissible to entities who have been in business for 26 fortnights and whose accounts have been duly audited for the full accounting year. For this purpose, the period of 26 fortnights shall be calculated from the actual business operation in the account.

8.15.4. No loan is permissible against such deposits. Banks shall not issue any deposit receipts or mark any lien on the amount held in such form of deposits.

8.15.5. Core portion as calculated below shall remain linked to the escrow account. The escrow account balance and core portion maintained shall be clearly disclosed in the auditors’ certificates submitted to RBI on quarterly and annual basis.

Note: For the purpose of this regulation, “Core Portion” shall be computed as under:

Step 1: Compute lowest daily outstanding balance (LB) in the escrow account on a fortnightly (FN) basis, for 26 fortnights from the preceding month.

Step 2: Calculate the average of the lowest fortnightly outstanding balances [(LB1 of FN1+ LB2 of FN2+ ……..+ LB26 of FN26) divided by26].

Step 3: The average balance so computed represents the “Core Portion” eligible to earn interest.

9. Customer Grievance Redressal and Dispute Management Framework

9.1. PAs shall put in place a formal, publicly disclosed customer grievance redressal and dispute management framework, including designating a nodal officer to handle the customer complaints / grievances and the escalation matrix. The complaint facility, if made available on website / mobile, shall be clearly and easily accessible.

9.2. PAs shall appoint a Nodal Officer responsible for regulatory and customer grievance handling functions. Details of the nodal officer for customer grievance shall be prominently displayed on their website.

9.3. PAs shall have a dispute resolution mechanism binding on all the participants which shall contain transaction life cycle, detailed explanation of types of disputes, process of dealing with them, compliance, responsibilities of all the parties, documentation, reason codes, procedure for addressing the grievance, turn-around-time for each stage, etc.

10. Security, Fraud Prevention and Risk Management Framework

10.1. A strong risk management system is necessary to meet the challenges of fraud and ensure customer protection. PAs shall put in place adequate information and data security infrastructure and systems for prevention and detection of frauds.

10.2. PAs shall put in place Board approved information security policy for the safety and security of the payment systems operated by them and implement security measures in accordance with this policy to mitigate identified risks. Baseline technology-related recommendations for adoption by the PAs are provided in Annex 2. The PGs may also adopt them as best practices.

10.3. PAs shall establish a mechanism for monitoring, handling and follow-up of cyber security incidents and breaches. The same shall be reported immediately to the DPSS, RBI, Central Office, Mumbai. They shall also be reported to CERT-In (Indian Computer Emergency Response Team) as per the details notified by CERT-In.

10.4. PAs shall not store the customer card credentials within their database or the server accessed by the merchant. They shall comply with data storage requirements as applicable to Payment System Operators (PSOs).

10.5. PAs shall submit the System Audit Report, including cyber security audit conducted by CERT-In empanelled auditors, within two months of the close of their financial year to the respective Regional Office of DPSS, RBI.

11. Reports

11.1. The reports to be submitted by authorised PAs are listed in Annex 3.

12. General Instructions

12.1. PAs shall ensure that the extant instructions with regard to Merchant Discount Rate (MDR) are followed. Information on other charges such as convenience fee, handling fee, etc., if any, being levied shall also be displayed upfront by the PA.

12.2. PAs shall not place limits on transaction amount for a particular payment mode. The responsibility therefor shall lie with the issuing bank / entity; for instance, the card issuing bank shall be responsible for placing amount limits on cards issued by it based on the customer’s credit worthiness, spending nature, profile, etc.

12.3. PAs shall not give an option for ATM PIN as a factor of authentication for card-not-present transactions.

12.4. All refunds shall be made to the original method of payment unless specifically agreed by the customer to credit to an alternate mode.


Annex 2

Baseline Technology-related Recommendations

Indicative baseline technology-related recommendations for adoption by the PAs (mandatory) and PGs (recommended) are:

1. Security-related Recommendations

The requirements for the entities in respect of IT systems and security are presented below:

1.1. Information Security Governance: The entities at a minimum shall carry out comprehensive security risk assessment of their people, IT, business process environment, etc., to identify risk exposures with remedial measures and residual risks. These can be an internal security audit or an annual security audit by an independent security auditor or a CERT-In empanelled auditor. Reports on risk assessment, security compliance posture, security audit reports and security incidents shall be presented to the Board.

1.2. Data Security Standards: Data security standards and best practices like PCI-DSS, PA-DSS, latest encryption standards, transport channel security, etc., shall be implemented.

1.3. Security Incident Reporting: The entities shall report security incidents / card holder data breaches to RBI within the stipulated timeframe to RBI. Monthly cyber security incident reports with root cause analysis and preventive actions undertaken shall be submitted to RBI.

1.4. Merchant Onboarding: The entities shall undertake comprehensive security assessment during merchant onboarding process to ensure these minimal baseline security controls are adhered to by the merchants.

1.5. Cyber Security Audit and Reports: The entities shall carry out and submit to the IT Committee quarterly internal and annual external audit reports; bi-annual Vulnerability Assessment / Penetration Test (VAPT) reports; PCI-DSS including Attestation of Compliance (AOC) and Report of Compliance (ROC) compliance report with observations noted if any including corrective / preventive actions planned with action closure date; inventory of applications which store or process or transmit customer sensitive data; PA-DSS compliance status of payment applications which stores or processes card holder data.

1.6. Information Security: Board approved information security policy shall be reviewed atleast annually. The policy shall consider aspects like: alignment with business objectives; the objectives, scope, ownership and responsibility for the policy; information security organisational structure; information security roles and responsibilities; maintenance of asset inventory and registers; data classification; authorisation; exceptions; knowledge and skill sets required; periodic training and continuous professional education; compliance review and penal measures for non-compliance of policies.

1.7. IT Governance: An IT policy shall be framed for regular management of IT functions and ensure that detailed documentation in terms of procedures and guidelines exists and are implemented. The strategic plan and policy shall be reviewed annually. The Board level IT Governance framework shall have-

1.7.1. Involvement of Board: The major role of the Board / Top Management shall involve approving information security policies, establishing necessary organisational processes / functions for information security and providing necessary resources.

1.7.2. IT Steering Committee: An IT Steering Committee shall be created with representations from various business functions as appropriate. The Committee shall assist the Executive Management in implementation of the IT strategy approved by the Board. It shall have well defined objectives and actions.

1.7.3. Enterprise Information Model: The entities shall establish and maintain an enterprise information model to enable applications development and decision-supporting activities, consistent with board approved IT strategy. The model shall facilitate optimal creation, use and sharing of information by a business, in a way that it maintains integrity, and is flexible, functional, timely, secure and resilient to failure.

1.7.4. Cyber Crisis Management Plan: The entities shall prepare a comprehensive Cyber Crisis Management Plan approved by the IT strategic committee and shall include components such as Detection, Containment, Response and Recovery.

1.8. Enterprise Data Dictionary: The entities shall maintain an “enterprise data dictionary” incorporating the organisation’s data syntax rules. This shall enable sharing of data across applications and systems, promote a common understanding of data across IT and business users and prevent creation of incompatible data elements.

1.9. Risk Assessment: The risk assessment shall, for each asset within its scope, identify the threat / vulnerability combinations and likelihood of impact on confidentiality, availability or integrity of that asset – from a business, compliance and / or contractual perspective.

1.10. Access to Application: There shall be documented standards / procedures for administering an application system, which are approved by the application owner and kept up-to-date. Access to the application shall be based on the principle of least privilege and “need to know” commensurate with the job responsibilities.

1.11. Competency of Staff: Requirements for trained resources with requisite skill sets for the IT function need to be understood and assessed appropriately with a periodic assessment of the training requirements for human resources.

1.12. Vendor Risk Management: The Service Level Agreements (SLAs) for technology support, including BCP-DR and data management shall categorically include clauses permitting regulatory access to these set-ups.

1.13. Maturity and Roadmap: The entities shall consider assessing their IT maturity level, based on well-known international standards, design an action plan and implement the plan to reach the target maturity level.

1.14. Cryptographic Requirement: The entities shall select encryption algorithms which are well established international standards and which have been subjected to rigorous scrutiny by an international community of cryptographers or approved by authoritative professional bodies, reputable security vendors or government agencies.

1.15. Forensic Readiness: All security events from the entities infrastructure including but not limited to application, servers, middleware, endpoint, network, authentication events, database, web services, cryptographic events and log files shall be collected, investigated and analysed for proactive identification of security alerts.

1.16. Data Sovereignty: The entities shall take preventive measures to ensure storing data in infrastructure that do not belong to external jurisdictions. Appropriate controls shall be considered to prevent unauthorised access to the data.

1.17. Data Security in Outsourcing: There shall be an outsourcing agreement providing ‘right to audit’ clause to enable the entities / their appointed agencies and regulators to conduct security audits. Alternatively, third parties shall submit annual independent security audit reports to the entities.

1.18. Payment Application Security: Payment applications shall be developed as per PA-DSS guidelines and complied with as required. The entities shall review PCI-DSS compliance status as part of merchant onboarding process.

2. Other Recommendations

2.1 The customer card credentials shall not be stored within the database or the server accessed by the merchant.

2.2 Option for ATM PIN as a factor of authentication for card not present transactions shall not be given.

2.3 Instructions on storage of payment system data, as applicable to PSOs, shall apply.

2.4 All refunds shall be made to original method of payment unless specifically agreed by the customer to credit an alternate mode.


Annex 3

Reports to be submitted by Authorised Payment Aggregators

Annual

1. Net-worth Certificate – Audited Annual report with CA certificate on Net-worth – by September 30th (Annex 3.1).

2. IS Audit Report and Cyber Security Audit Report with observations noted, if any, including corrective / preventive action planned with closure date – Externally Audited – by May 31st. The scope of audit shall encompass all relevant areas of information system processes and applications.

Quarterly

1. Auditors’ Certificate on Maintenance of Balance in Escrow Account – by 15th of the month following the quarter end. (Annex 3.2).

2. Bankers’ Certificate on Escrow Account Debits and Credits – Internally Audited – by 15th of the month following the quarter end.

Monthly

1. Statistics of Transactions Handled – by 7th of next month (Annex 3.3).

Non-periodic

1. Declaration and Undertaking by the Director – Changes in Board of Directors – as and when happens (Annex 3.4).

2. Report from Banks in Compliance with para 3.6 of Annex 1 – One time report to be sent by April 15th, 2021.

3. Cyber Security Incident Reports – with root cause analysis and preventive action undertaken – by 7th of next month of incidence month.

Leave a comment

Filed under Uncategorized

legal entity identifier

https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=11834&Mode=0

A reference is invited to circular FMRD.FMID.No.10/11.01.007/2018-19 dated November 29, 2018 issued by Reserve Bank of India on requirement of Legal Entity Identifier (LEI) for participation in non-derivative markets. Reference is also invited to circular FMRD.FMID.No.15/11.01.007/2018-19 dated April 26, 2019 on revised timelines for implementation of LEI for non-derivative markets.

2. Based on the feedback and requests received from market participants, in the context of the difficulties arising from the outbreak of novel coronavirus disease (COVID-19), and with a view to enabling smoother implementation of the LEI system in non-derivative markets, the timeline for implementation (Phase III) is extended as under:

Phase Net Worth of Entities Current Deadline Extended Deadline
Phase III Up to ₹ 200 crore March 31, 2020 September 30, 2020

3. These directions are issued under section 45W, read with section 45U, of the Reserve Bank of India Act, 1934.

Leave a comment

Filed under Uncategorized

corona – banking relief package

https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=11835&Mode=0

Please refer to the Statement of Development and Regulatory Policies released on March 27, 2020 where inter alia certain regulatory measures were announced to mitigate the burden of debt servicing brought about by disruptions on account of COVID-19 pandemic and to ensure the continuity of viable businesses. In this regard, the detailed instructions are as follows:

(i) Rescheduling of Payments – Term Loans and Working Capital Facilities

2. In respect of all term loans (including agricultural term loans, retail and crop loans), all commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies) (“lending institutions”) are permitted to grant a moratorium of three months on payment of all instalments1 falling due between March 1, 2020 and May 31, 2020. The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period.

3. In respect of working capital facilities sanctioned in the form of cash credit/overdraft (“CC/OD”), lending institutions are permitted to defer the recovery of interest applied in respect of all such facilities during the period from March 1, 2020 upto May 31, 2020 (“deferment”). The accumulated accrued interest shall be recovered immediately after the completion of this period.

(ii) Easing of Working Capital Financing

4. In respect of working capital facilities sanctioned in the form of CC/OD to borrowers facing stress on account of the economic fallout of the pandemic, lending institutions may recalculate the ‘drawing power’ by reducing the margins and/or by reassessing the working capital cycle. This relief shall be available in respect of all such changes effected up to May 31, 2020 and shall be contingent on the lending institutions satisfying themselves that the same is necessitated on account of the economic fallout from COVID-19. Further, accounts provided relief under these instructions shall be subject to subsequent supervisory review with regard to their justifiability on account of the economic fallout from COVID-19.

Classification as Special Mention Account (SMA) and Non-Performing Asset (NPA)

5. Since the moratorium/deferment/recalculation of the ‘drawing power’ is being provided specifically to enable the borrowers to tide over economic fallout from COVID-19, the same will not be treated as concession or change in terms and conditions of loan agreements due to financial difficulty of the borrower under paragraph 2 of the Annex to the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 dated June 7, 2019 (“Prudential Framework”). Consequently, such a measure, by itself, shall not result in asset classification downgrade.

6. The asset classification of term loans which are granted relief as per paragraph 2 shall be determined on the basis of revised due dates and the revised repayment schedule. Similarly, working capital facilities where relief is provided as per paragraph 3 above, the SMA and the out of order status shall be evaluated considering the application of accumulated interest immediately after the completion of the deferment period as well as the revised terms, as permitted in terms of paragraph 4 above.

7. The rescheduling of payments, including interest, will not qualify as a default for the purposes of supervisory reporting and reporting to Credit Information Companies (CICs) by the lending institutions. CICs shall ensure that the actions taken by lending institutions pursuant to the above announcements do not adversely impact the credit history of the beneficiaries.

Other Conditions

8. Lending institutions shall frame Board approved polices for providing the above-mentioned reliefs to all eligible borrowers, inter alia, including the objective criteria for considering reliefs under paragraph 4 above and disclosed in public domain.

9. Wherever the exposure of a lending institution to a borrower is ₹ 5 crore or above as on March 1, 2020, the bank shall develop an MIS on the reliefs provided to its borrowers which shall inter alia include borrower-wise and credit-facility wise information regarding the nature and amount of relief granted.

10. The instructions in this circular come into force with immediate effect. The Board of Directors and the key management personnel of the lending institutions shall ensure that the above instructions are properly communicated down the line in their respective organisations, and clear instructions are issued to their staff regarding their implementation.

Leave a comment

Filed under Uncategorized

container detention charges

PIB press release dated 29th March, 2020

Ministry of Shipping has advised the shipping lines not to impose any container detention charges on import and export shipments for the period from 22nd March,2020 to 14th April,2020(both days inclusive) over and above free time arrangements that is currently agreed and availed as part of any negotiated contractual terms. The Advisory has been issued in order to maintain proper supply lines at the Indian Seaports. During this period, Shipping lines have also been advised not to impose any new or additional charge. This decision is purely one-time measure to deal with present disruptions caused by COVID-19 outbreak.

Following the announcement of the lockdownin the country from 25th March, 2020 due to COVID-19 pandemic, there has been some disturbance in downstream services, leading to some delay in evacuation of goods from the ports. This has resulted in some cargo owners either suspending their operations or finding it difficult to transport goods/cargo and complete their paperwork, leading to detention of containers without their fault. The Advisory will help in smooth functioning of trade and maintenance of supply chain in the country.

 

Leave a comment

Filed under Uncategorized

EPF withdrawals

Employees Provident Fund Organisation has issued a notification dated 27th March, 2020 allowing a non refundable advance not exceeding three months basic wages & dearness allowance or upto 75% of the amount standing to the credit of the member, in view of the corona pandemic. Employees working in factories & establishments across India and member of EPF 1952 Scheme are eligible for the above benefits. The copy of the circular can be found here

Comments Off on EPF withdrawals

Filed under labour law compliances, Uncategorized

Chase

chase

Chase a French movie starring Isabelle Carre, Nicolas Cazale, Olivier Sitruk among others. Luis (Nicolas) is a security guard handling cash management, he steals the van and runs away with 5 million francs. Sam (Olivier) and Emma (Isabelle Carre) are his childhood friends. A rival gang was planning to do the same heist, but got canned by Luis acting alone. The police is on his trail and so are the rival gang people Interesting twist in the end. Worth watching.

Leave a comment

Filed under cinema

Covid relief for petroleum sector

PIB press release dated 28th March, 2020

Petroleum & Explosives Safety Organization (PESO), under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, has taken various measures to ensure uninterrupted supply of Oxygen to hospitals and other health care facilities and also to address the problems faced by Petroleum, Explosives, Fireworks, and Industrial Gas Industries due to nationwide lockdown for containment of COVID-19 pandemic. These include:

1. Instructions have been issued by PESO Hq to all its offices to ensure grant of licences for storage and transport of medical oxygen urgently.

2. Advisory has been issued by PESO on 25.03.2020 to Principal Secretaries (Home) of all States, requesting them to allow uninterrupted transportation and manufacturing of medical oxygen and nitrous oxide in line with MHA order No. 40-3/2020 dated 24/03/2020 on the measures to be taken for containment of COVID-19 in the country.

3. Validity of licenses for transportation of oxygen and other gases which will expire on 31/03/2020, has been extended up to 30/06/2020.

4. Validity of licenses for storage, transportation, sale, use and manufacturing of explosives and fireworks which will expire on 31/03/2020, has been extended up to 30/09/2020. Fee for late renewal of licences will also not be charged.

5. Cylinders used for storage of compressed oxygen, CNG, LPG and other gases, which are due for statutory hydro testing on 31/03/2020, shall be deemed to be due for testing on 30/06/2020.

6. Pressure vessels used for storage and transportation of oxygen, LPG and other gases, which are due for statutory testing for safety relief valves and hydro testing from 15/03/2020 to 30/06/2020, shall be deemed to be due for testing on 30/06/2020.

Leave a comment

Filed under Uncategorized

Covid relief for power sector

PIB press release dated 28th march, 2020

Despite the lockdown imposed to contain the spread of the COVID 19 pandemic, the whole workforce of the power sector – generation, transmission, distribution and system operations – is working round the clock  to keep all homes and establishments lighted.Shri R.K.Singh, the Union Minister of Power, has said that in this time of crisis, the Ministry of Power is committed to provide 24×7 supply of electricity to all consumers.

Around 70% of power generation is from coal based power plants. In order to maintain the continuity of supply of coal by domestic coal companies and transportation by railways, the ministry is in touch with the Ministries of Railways and Coal.

Due to the lockdown, consumers are unable to pay their dues to the Distribution Companies (Discoms). This has affected the liquidity position of the Discoms thereby impairing their ability to pay to the generating and transmission companies. In this context, Shri R.K.Singh, the Union Minister of Power has approved significant relief measures for power sector .The following decisions have been taken to ease the liquidity problems of the Discoms –

  1. CPSU Generation / Transmission Companies will continue supply/ transmission of electricity even to Discoms which have large outstanding dues to the Generation / Transmission companies. During the present emergency there will be no curtailment of supply to any DISCOM.
  2. Till 30th June 2020 the payment security mechanism to be maintained by the Distribution Companies with the Generating Companies for dispatch of power shall be reduced by fifty percent.
  3. Directions have been issued to the Central Electricity Regulatory Commission to provide a moratorium of three months to Discoms to make payments to generating companies and transmission licensees and not to levy penal rates of late payment surcharge. State Governments are being requested to issue similar directions to State Electricity Regulatory Commissions.

Leave a comment

Filed under Uncategorized

Govt. e-Marketplace

Government e-Marketplace (GeM), a Special Purpose Vehicle under the Ministry of Commerce and Industry, has taken a number of initiatives in the fight against COVID-19 Pandemic. GeM, which operates a dynamic, self-sustaining and user friendly portal for procurement of goods and services by Government offices, has taken steps to enable quick, efficient, transparent and cost-effective purchases in this hour of need. Procurement on GeM has been authorized by General Financial Rules by making necessary changes in government rules. Presently more than 7400 products in about 150 product categories and hiring of transport service are available on GeM portal. GeM is a completely paperless, cashless and system driven e-market place that enables procurement of common use goods and services with minimal human interface.

The steps taken recently are as follows:

  1. A dedicated page for COVID 19 related categories has been created on GeM: https://gem.gov.in/covid19
  2. Following categories have been created for medical supplies in addition to the 32 existing ones and are live on GeM:
    1. Novel Coronavirus (COVID-19) Sample Collection Kit
    2. Reusable vinyl/rubber gloves (cleaning)
    3. Eye protection (visor/goggles)
    4. Disposable thermometers.
    5. Single-use towels
    6. UV tube light for sterilization.
    7. Surgical Isolation Face Shield
    8. Medical waste incinerator
  3. Following categories have been created for auxiliary supplies in addition to 52 categories and 7 services that existed:
    1. General purpose tool kit
    2. Wrought aluminum utensils
  4. With this, all categories recommended by NITI Ayog in medical and auxiliary supplies are now on GeM. All OEMs, resellers and suppliers for the above newly created categories are being identified for onboarding on GeM.
  5. The total number of COVID-19 related  categories on GeM as on date are:
Total 173
Medical Related 120
Auxiliary 53

Detailed list of categories for medical and auxiliary supplies are enclosed at Annexure – 1 and Annexure – 2 respectively.

  1. The timelines and status of various interventions for ease of procurement for COVID-19 related items are as follows-
  2. Shorter duration Bids with shorter delivery period for specific categories. Bid Cycle for COVID-19 related categories has been reduced to 3 days from existing 10 days. Buyers would also be able to reduce the Delivery Period for such items to 2 days considering the time critical nature of the items. This is already live on the portal.
  3. Filter for Delivery Lead Time selection by buyer in  L1 buying. Will be live by 1 April 2020
  4. Prioritization of Product/Brand Approval for Covid Specific Categories. Will be live by 28 March 2020
  5. New business rule for controlling price increase. Will be live by 1 April 2020
  6. Allow Delivery Period Extension 30 days beyond expiry of original Delivery Period. Will be live by 28 March 2020.
  7. New business rule to stock out sellers who do not update stock within 48 hours of notification for specific categories. This is already live.
  8. New page for tracking COVID-19 categories and the number of sellers. Will be live by 28 March 2020.
  9. The World Bank increased procurement threshold at GeM for COVID 19 Response Project, from $ 1 Lakh to $ 1 Million.
  10. Seller Onboarding:
    1. OEMs & Sellers have been identified for eight new COVID categories
    2. Relevant medical categories were searched on GeM and outside GeM.  Targeted mailers were sent to appx. 10,000 sellers including OEMs.  Mail content detailed new Covid-19 categories and prioritization introduced by GeM  in brand & product approval process for faster onboarding.
    3. OEMs & sellers have also been contacted telephonically.  200+ such sellers have been engaged.  They have been informed about the new Covid-19 categories created by GeM and have been asked to onboard.  OEMs have been asked to ask their resellers to onboard and hold sufficient inventory levels.
    4. OEMs & Sellers have been exhorted to view the current situation as an opportunity and contribute in whatever way they can to the requirements of a national health emergency.
    5. OEMs/Sellers outside GeM have also been guided on how to get in contact with regional business facilitators.
    6. OEMs are being sensitised about the orders issued by the Ministry of Home Affairs, exempted businesses and various SOPs.  Online link: https://www.ndma.gov.in/en/ has also been shared.
    7. Brand approval & product approval requests from OEMs/Sellers have been accorded topmost priority and have been cleared on the same day.

Annexure – 1

List of categories for medical supplies

S. No. Item
1 Ventilators
2 Alcohol based hand-rub
3 Face shield (eye, nose & mouth protection)
4 N95 Masks
5 Latex single use gloves (clinical)
6 Reusable vinyl / rubber gloves (cleaning)
7 Eye protection (visor / goggles)
8 Protective Gowns / Aprons
9 Disposable thermometers
10 UV tube light for sterilization
11 Medical masks (surgical / procedure)
12 Detergent / Disinfectant
13 Detergent / Disinfectant
14 Detergent / Disinfectant
15 Single use towels
16 Biohazard bags
17 Wheel Chair
18 Glucometer with strips
19 Hard-frozen Gel Packs
20 Sample Collection Kit
21 Thermocool box / Ice-box
22 Stretcher
23 Stretcher
24 Thermal scanners
25 Batteries for thermal scanners
26 BP apparatus
27 IV Sets
28 IV Cannula
29 IV Stand
30 Ambulance
31 First aid
32 Medical Waste Incinerator
33 ICU Beds
34 Cardiac monitors
35 Syringe pumps
36 Syringe pumps
37 Portable x ray machines
38 Endotracheal tube
39 Suction tube
40 Suction tube
41 Oxygen cylinders

Annexure – 2

List of categories for auxiliary supplies

S. No. Item
1 Soap
2 Rubb Hall Tents
3 Chairs/Benches
4 Tables/Desks
5 Printer
6 Computer
7 Extension Boards
8 Matches
9 Candles
10 ID for Patients
11 ID for  volunteers
12 Flyer – information booklet
13 White board + markers
14 Garbage bags, bins
15 Drinking Water+ Dispenser (4)
16 Cleaning items (Brooms)
17 Cleaning items (Mop)
18 Fire extinguisher
19 E Toilet
20 Genset / Back up
21 Whistle
22 Tool set – basic
23 Registration details – sticker/printer
24 Mattresses
25 Foldable Cots / Beds
26 Bed sheets
27 Pillows
28 Pillow Covers
29 Towels
30 Rubber Sheets
31 Blankets
32 Emergency Lamp
33 Laundry (Detergents)
34 Refrigerator – smallest
35 Tokens with number
36 Mosquito Repellent
37 Sanitary Pads
38 Diapers – kids
39 Steel Plates
40 Steel Glasses
41 Spoons
42 Jugs
43 Stove – Big
44 Large vessels
45 Buckets
46 Mugs
47 Tissue paper
48 Smaller bins
49 Paper
50 Pen
51 Stapler
52 Stapler Pins
53 Box file
54 Letterhead

Leave a comment

Filed under Uncategorized

Competition Act

PIB press release dated 28th March, 2020

The Competition Commission of India (CCI) has revised guidance notes to Form I with a view to incorporate the changes made in Green Channel. The revised Form I, under the Green Channel, will be used to file the notice under Section 6(2) of the Competition Act, 2002 (Act) and Regulation 5(2) of the Combination Regulation.

The guidance notes provide the scope of information and documents to be submitted along with the form. It also provides clarification regarding eligibility criterion for Green Channel. The CCI issues guidance notes for parties to facilitate them to make a filing before it.

As part of its ongoing and regular efforts to streamline M&A filings process and make it simpler and faster, in August 2019, the CCI introduced an automatic system of approval for combinations under Green Channel and revised Form I to file the notice under Section 6(2) of the Competition Act, 2002 (Act) and Regulation 5(2) of the Combination Regulation.

In case of any other guidance on the information requirement in the Form I, the parties may request Pre-Filing Consultation (PFC) with the officers of the CCI. The parties are encouraged to seek PFC as per the guidelines available on the CCI’s website.

The revised notes to Form I are available at https://www.cci.gov.in/sites/default/files/page_document/Form1.pdf

Leave a comment

Filed under Uncategorized