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Registration RNI No.67802/98
Postal Regn. No.CHD/0001/2015-17
Posted at - MBU Chandigarh on 7th/10th
Volume - XVIII No.09 September 2015
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Foreign Trade Policy Special Issue Contents of this Issue
BANKING POLICY : 2
• Crop Loan Interest Subvention
• Additional Interest on Deposit
• Relief Measures-Natural Calamities
• Guarantee fee to CGTMSE
• Relaxation - Branch Opening
BANKING FEATURES : 4-8, 20
• Foreign Trade Policy 2015-20
• Deemed Exports
• EOU, EHTP, STP, BTP
• Export Promotion Capital Goods
• Export of Gem & Jewellary
DIARY OF EVENTS - Aug, 2015: 9
Those who win, are those, who think they can • Policy, Economy
• Banking Developments
Corporate & Distribution Office • Capital Markets & Insurance
1008, Sector 45-B, Chandigarh General Awareness : 13
Phone 0172 2665 623
eMail - bankingupdate123 @ gmail.com Multi-Option questions:15-18
bankingbanking updateupdate..comcom Data Bank : 20
www.bankingindiaupdate.com
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Elearning class for e-Learning CDs for Online Mock Tests
Promn/JAIIB/CAIIB Details- Page no.7 www.nstoorbankingonline.com
(Ongoing -See page 3)
Executive Editor - S. Chand Singh, Editor in Chief - Sh. N S Toor
2 ♦ Banking events updatE ♦ September 2015
ANKING Interest Subvention for Crop Loans the moratorium of 1 year) if the loss is between 33% and
BPOLICY RBI in its circular dated 13.08.15, informed that Central 50%. If the crop loss is 50% or more, the restructured
Government approved the implementation of the Interest Subvention Scheme period for repayment may be extended to a maximum of
for the year 2015-16 for short term crop loans with the following stipulations: 5 years (including the moratorium period of one year).
i) Interest subvention @ 2% pa will be available to Public Sector Banks and Exposure Norms limit for the Standalone
Private Sector Scheduled Commercial Banks (in respect of loans given by their Primary Dealers (SPDs)
rural and semi-urban branches) on their own funds used for short-term crop RBI decided (06.08.15) to increase exposure ceiling lim-
loans up to Rs.3 lac per farmer provided the banks make available, short term its in respect of single borrower / counterparty from
credit at the ground level at 7% pa to the farmers. The subvention will be 25% to 50% of latest audited Net Owned Funds (NOF)
calculated on the loan amount from the date of disbursement/drawal to date and in respect of group borrower from 40% to 65% of
of actual repayment of the loan or up to the due date of the loan fixed by the latest audited NOF only for investments in AAA rated
banks whichever is earlier, subject to a maximum period of one year. corporate bonds.
ii) Additional interest subvention @3% pa will be available to the farmers The existing norm of exposure ceilings for single bor-
repaying the loan promptly from the date of disbursement of the crop loan up rower / counterparty and group borrower of 25% and
to the actual date of repayment or up to the due date fixed by the bank for 40% respectively will continue to apply in respect of
repayment of crop loan, whichever is earlier, subject to a maximum period of other investments in the corporate bonds.
one year from the date of disbursement. This implies that the farmers paying Suspension of Guarantee Approvals under
promptly would get short term crop loans @4% pa during the year 2015-16. Credit Guarantee Scheme
It is not available for farmers who repay after one year. CGTMSE decided (28.04.15) that no guarantees (includes
iii) To discourage distress sale and to encourage to store the produce in fresh, renewals and enhancements) will be issued to
warehouses against warehouse receipts, the benefit of subvention is avail- member lending institutions (MLIs) which have marked
able to small and marginal farmers having Kisan Credit Card for a further cumulative NPAs (in terms of amount) of 10% or more
period of up to 6 months post-harvest on the same rate as available to crop vis-à-vis the cumulative amount of guarantees issued by
loan against negotiable warehouse receipt for keeping produce in warehouses. the Trust to it. If this NPA level crosses the 12% mark,
iv) To provide relief to farmers affected by natural calamities, the interest the claims of such MLIs will be settled after giving notice
subvention of 2% will continue to be available to banks for the first year on and after thorough scrutiny of each claim.
the restructured amount. Such restructured loans may attract normal rate of Composite Guarantee Fee at differential rates
interest from the second year onwards as per RBI policy. by CGTMSE
Subvention Claims: Claims are to be submitted to RBI as under: As per extant policy of CGTMSE, the composite guarantee
i) In respect of 2% interest subvention, banks are to submit their claims on a fee is being paid upfront, by MLIs as under:
half-yearly basis as at Sept 30, 2015 and March 31, 2016, of which, the latter a) Women, Micro Enterprises and units in North East
needs to be accompanied by the Statutory Auditor’s certificate certifying the Region (includingSikkim) : Up to Rs.5 lac @ 0.75% p.a.
claims for subvention for the entire year ended March 31, 2016 as true and and above Rs.5 lac @ 0.85% p.a. of sanctioned amount.
correct. Any remaining claim pertaining to the disbursements made during the b) Others : 1% p.a. of sanctioned amount.
year 2015-16 and not included in the claim for March 31, 2016, may be For loans above Rs.5 lac, CGTMSE decided (17.04.15) to
consolidated separately and marked as an ‘Additional Claim’ duly audited by charge differential rates of fee on the basis of NPA levels
the Statutory Auditors certifying the correctness. reported by MLIs, for guarantees approved by the Trust
ii) For 3% additional subvention, banks may submit their one-time consoli- on or after October 01, 2015 as under:
dated claims pertaining to the disbursements made during the entire year NPA level Guarantee Fee
2015-16 latest by April 30, 2017, duly audited by the Statutory Auditors 1 Above 20% SR + 100 bps
certifying the correctness. 2 15% - 20% SR + 50 bps
Deposits of Army Group Insurance Directorate, Naval Group 3 12% - 15% SR + 25 bps
Insurance Fund and Air Force Group Insurance Society 4 12% and below SR
In terms of extant guidelines (11.09.87), Public Sector Banks can pay addi- 5 Below 6% SR - 25 bps @
tional interest of 1.28% p.a. over and above the normal rate of interest SR = Standard Rate (Existing ASF/AGF prescribed rate).
permissible in terms of directives on interest rates on deposits issued by RBI, NPA level shall be computed as a % of guarantees issued
only on the term deposits for 2 years and above of Army Group Insurance on and up to March 31 every year.
Directorate (AGID), Naval Group Insurance Fund (NGIF) and Air-Force Group @ Provided MLI has been obtaining guarantee cover
Insurance Society (AFGIS), provided such deposits are not in any way linked from the Trust for at least 5 complete years.
For non-payment of fee by MLI within given period, the
with payment of insurance premia by the bank. guarantee shall not be available to MLI unless the Trust
RBI decided (06.08.15) to withdraw the prescription of offering additional agrees for continuance of guarantee and the lending
interest of 1.28% pa on these deposits. Accordingly, interest rates on such institution pays penal interest on the fee due and unpaid,
deposits should be at par with other deposits of similar maturity and amount. with effect from the due date, at 4% over Bank Rate,
The revised guidelines will be applicable at the time of accepting fresh depos- per annum, or at such rates specified by the Trust from
its or renewal of the existing deposits. In other words, existing term deposits time to time, for the period of delay.
of AGID, NGIF and AFGIS may be continued till maturity. Modifications in the Interest Rate Cap under
Relief Measures in areas affected by Natural Calamities Credit Guarantee Scheme (CGS) of CGTMSE
Based on Govt. of India notification dated 08.04.15, RBI decided (21.08.15) As per Circular dated Dec 17, 2013 any credit facility
to allow State Level Bankers’ Committees/District Level Consultative Commit- sanctioned by MLIs under CGS, to eligible Borrowers with
tees/banks to take a view on rescheduling of loans if the crop loss is 33% or interest rate more than 4% over its Base Rate (BR) was
more. Banks may allow a max period of repayment of up to 2 years (including made ineligible for coverage under CGS.
(COMPILATION- SAPANDEEP TOOR & MANJOT TOOR, in Sydney, Australia - on the basis of information available on RBI Website)
Banking events updatE ♦September 2015 ♦ 3
CGTMSE decided (15.07.15) to reduce the cap on Interest Rate from up to 4% above
base rate, to up to 2% for loans up to Rs.50 lac and 3% above Base Rate for loans CORRESPONDENCE
above Rs. 50 lakh. The interest rate cap could be enhanced to 3% for the entire loans
if the amount of credit facility up to Rs.50 lac is enhanced to above Rs.50 lac. COURSE
The revised guidelines shall be applicable for the credit facilities sanctioned by MLIs on or
after Sept 01, 2015, including additional term loans for existing credit facilities covered
under CGS. The revised guidelines shall, however, not be applicable for existing working PROMOTION EXAM
capital cases already covered under CGS where enhancement and / or renewal takes
place subsequent to Sept 01, 2015. Based on latest trends of IBPS exam. A large
Reporting under FDI Scheme on the e-Biz platform no. of bankers already succeeded by using
To promote the ease of reporting of transactions under FDI, RBI, under the aegis of the the course material. If unable to attend class
e-Biz project of the Government (hosted at National Informatics Centre- NIC) has en- room program, this is the best option.
abled (21.08.15) online filing of the Foreign Currency Transfer of Shares (FCTRS) re- Course Kit : The course kit include:
turns for reporting transfer of shares, convertible debentures, partly paid shares and (a) subject-wise basic study material,
warrants from a person resident in India to a person resident outside India or vice versa. (b) assignment to improve retention
The design of the reporting platform enables the customer to login into the eBiz portal, (c) objective type practice exercise
download the reporting form (FCTRS), complete and then upload the same onto the (d) recalled questions
portal using their digitally signed certificates. ADs banks are required to download the (e) mock test papers.
completed forms, verify the contents from the available documents and if necessary, call Fee : May differ from bank to bank. May be
for additional information from the customer and then upload the same for RBI to checked before remittance). Fee to be paid
process and allot the Unique Identification Number (UIN). in advance.
Govt. Business by Agency Banks – Payment of Agency Commission How to enrol : To enrol, advise (a) name,
RBI clarified (13.08.15) that the following activities do not come under the purview of (b) address for correspondence (c) Email
agency bank business and are not eligible for payment of agency commission. address, (d) bank name, (e) scale for which
a. Furnishing of bank guarantees/security deposits, etc through private sector banks by appearing, (f) phone / Cell number and (f)
government contractors/suppliers, which constitute banking transactions undertaken details of subjects for the exam (relevant
by banks for their customers. course material, other than internal bank
b. Banking business of autonomous/statutory bodies. guidelines shall be sent).
c. Payments of a capital nature such as capital contributions/subsidies/grants made by
governments to cover losses incurred by autonomous/statutory bodies.
d. Prefunded schemes which may be implemented by a Central Govt. Ministry/Depart- CAIIB/
ment (in consultation with CGA) and a State Govt. Department through any bank with-
out reference to RBI.
Relaxations in Branch Authorisation Policy JAIIB
RBI revised (06.08.15) the instructions regarding merger, closure, shifting, part shift-
ing, opening of extension counters and reporting requirements as under: Course is based on exam pattern of IIB&F. A
1. Merger/Closure/ Shifting of branches large no. of candidate have succeeded in all 3
i) Banks may shift, merge or close all branches except rural branches and sole semi- papers in first attempt with our study material.
urban branches at their discretion. Course Kit : The course kit include:
ii) Shifting, merger, or closure of any rural branch as well as a sole semi urban branch (a) subject-wise basic study material,
would require approval of the DCC/DLRC. Banks may ensure that the centre should not (c) objective type practice exercise
be left unbanked. (d) mock test papers.
iii) Customers should be informed well in time before actual shifting/merger/closure of Fee : Fee differs for different papers. Fee
the branch. Further, while considering shifting/merger/closure of branches, banks should payable in advance, for which details may be
ensure that they continue to fulfil the role entrusted to these branches under the obtained by calling 01722665623 .
Government sponsored programmes and DBT Schemes. How to enrol : To enrol, advise name,
iv) It may further be ensured that branches are shifted/ within the same or to a lesser address for correspondence, eMail id, mobile
population category, i.e., semi urban branches to semi urban or rural centres and rural phone, bank name, subjects for enrolment.
branches to other rural centres.
v) In all such cases, the license, if any was issued, of the merged/closed/shifted branch
may be surrendered to RBI.
2. Part-shifting of Branches: It can be done without seeking prior approval of RBI. The
banking activity, i.e., deposit or loan business cannot be maintained at both places, and DS Institute of BankingDS Institute of Banking
the new location for part shifting would have to be within 1 km of the existing location. DS Institute of Banking
DS Institute of BankingDS Institute of Banking
They may also spin off certain activities such as Government business into separate
branches at their discretion. Office:SCO No.32, Sector 33-D,
3. Opening of Extension Counters: Presently banks can open Extension Counters in the Chandigarh 160 020
premises of institutions where they are the principal bankers, or obtain a NOC from the Phone: 0172-2665623, 09988221167
principal banker. With a view to enabling customer choice and operational freedom, the email - banking121@gmail.com
requirement of being the principal banker for opening of EC is not required. bankingbanking updateupdate..comcom
www.bankingindiaupdate.com
• bankingbanking updateupdate..comcom
4 ♦ Banking events updatE ♦ September 2015 BANKING FEATURES
Foreign Trade Policy 2015-20 (ii) Payment of excise duties on domestic procurement of
The Foreign Trade Policy (FTP), 2015-20, is notified by inputs or goods, including capital goods.
Central Govt., in exercise of powers conferred under (iii) Payment of service tax on procurement of services.
Section 5 of the Foreign Trade (Development & Regulation) (iv) Payment of Customs Duty and fee.
Act, 1992 (No. 22 of 1992). Merchandise Exports from India Scheme (MEIS):
Duration of FTP : 2015-20 FTP, incorporating provisions The objective of MEIS is to offset infrastructural
relating to export and import of goods and services, came inefficiencies and associated costs involved in export of
into force w.e.f. 01.04.2015 and shall remain in force up goods/products, which are produced/manufactured in
to 31st March, 2020, unless otherwise specified. All India, especially those having high export intensity,
exports and imports made upto the date of notification employment potential and thereby enhancing India’s
shall, accordingly, be governed by the relevant FTP. export competitiveness.
Director General of Foreign Trade (DGFT) can, by means Entitlement under MEIS
of a Public Notice, notify Hand Book of Procedures, Exports of notified goods/products with ITC[HS] code, to
including Appendices and Aayat Niryat Forms or amendment notified markets, shall be rewarded under MEIS. The basis
thereto, if any, laying down the procedure to be followed of calculation of reward would be on realised FOB value
by an exporter or importer or by any Licensing/Regional of exports in free forex, or on FOB value of exports as
Authority or by any other authority for purposes of given in the Shipping Bills in free forex, whichever is less,
implementing provisions of FT (D&R) Act, the Rules and unless otherwise specified.
the Orders made there under and provisions of FTP. Export of goods through courier or foreign post offices
IMPORTER EXPORTER CODE (IEC) using e-Commerce :
No export or import can be made by any person without (i) Exports of goods through courier or foreign post office
obtaining an IEC number unless specifically exempted. using e-commerce, of FOB value up to Rs. 25000 per
Further, only one IEC is permitted against one Permanent consignment shall be entitled for rewards under MEIS.
Account Number (PAN). If any PAN card holder has more (ii) If the value of exports using e-commerce platform is
than one IEC, the extra IECs is disabled. more than Rs 25000 per consignment then MEIS reward
IEC : An IEC is a 10-digit number allotted to a person that would be limited to FOB value of Rs.25000 only.
is mandatory for undertaking any export/import activities. (iii) Such goods can be exported in manual mode through
The facility for IEC in electronic form or e-IEC has also Foreign Post Offices at New Delhi, Mumbai and Chennai.
been operationalised. (iv) Export of such goods under Courier Regulations shall
(a) Application for obtaining IEC can be filed manually and be allowed manually on pilot basis through Airports at
submitting the form in the office of Regional Authority Delhi, Mumbai and Chennai. Deptt. of Revenue shall fast
(RA) of DGFT. An application for e-IEC may be filed online track the implementation of EDI mode at courier terminals.
in ANF 2A, in accordance with Handbook of Procedure on Ineligible categories under MEIS.
payment of application fee of Rs. 500/-, to be paid online Exports not eligible for Duty Credit Scrip entitlement:
through net banking or credit/debit card. (i) EOUs / EHTPs / BTPs/ STPs availing direct tax exemption.
(b) When an e-IEC is approved by the competent authority, (ii) Supplies made from DTA units to SEZ units
applicant is informed through e-mail that a computer (iii) Export of imported goods covered under 2.46 of FTP;
generated e-IEC is available on the DGFT website. By (iv) Exports through trans-shipment, meaning thereby exports that
clicking on “Application Status” after having filled and are originating in third country but trans-shipped through India;
submitted the requisite details in “Online IEC Application” (v) Deemed Exports;
webpage, applicant can view and print his e-IEC. (vi) SEZ/EOU/EHTP/BPT/FTWZ products exported through DTA;
(c) In case the applicant has digital signature, the (vii) Items restricted or prohibited for export under Schedule-2 of
application can also be submitted online and no physical Export Policy in ITC (HS), unless notified in Appendix 3B.
application or document is required. In case the applicant (viii) Service Export.
does not possess digital signature, a print out of the (ix) Red sanders and beach sand.
(x) Export products which are subject to Minimum export price or
application filed online duly signed by the applicant has export duty.
to be submitted to the concerned jurisdictional RA, in (xi) Diamond Gold, Silver, Platinum, other precious metal in any
person or by post. form including plain and studded jewellery and other precious and
Exports from India Schemes semi-precious stones.
There are two schemes for exports of Merchandise and (xii) Ores and concentrates of all types and in all formations.
Services respectively: (xiii) Cereals of all types.
(xiv) Sugar of all types and all forms.
(i) Merchandise Exports from India Scheme (MEIS). (xv) Crude / petroleum oil and crude / primary and base products of
(ii) Service Exports from India Scheme (SEIS). all types and all formulations.
Nature of Rewards under MEIS / SEIS: Duty Credit Scrips (xvi) Export of milk and milk products.
(DCS) are granted as rewards under MEIS and SEIS. DCS (xvii)Export of Meat and Meat Products.
and goods imported / domestically procured against them (xviii)Products wherein precious metal/diamond are used or Articles
are freely transferable. DCS can be used for : which are studded with precious stones.
(i) Payment of Customs Duties for import of inputs or goods. (xix) Exports made by units in FTWZ.
Compilation : Arundeep Toor (Sydney - Australia) (Source RBI Website).
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