CCL Regulatory Update: India Edition - July 2017
India Publications, Written by Meenakshi Iyer
22/08/2017

1.0 RBI REGULATORY UPDATES & DEVELOPMENTS

1.1 NOTIFICATIONS
1.1.1 Notification to Scheduled Commercial Banks
1.1.2 Notification to all Authorised Persons
1.1.3 Notification to all Banks
1.1.4 Notification to all Small Finance Banks
1.1.5 Notification to all Indian Private Sector Banks/Foreign Banks operating in India

2.0 SEBI REGULATORY UPDATES & DEVELOPMENTS

2.1 CIRCULARS
2.1.1 Policy of Annual Inspection of Members by Stock Exchanges/Clearing Corporations
2.1.2 Investments by FPIs in Government Securities
2.1.3 Guidelines for Issuance of ODIs by FPIs, with Derivative as Underlying Securities
2.1.4 Amendment to Investor Grievance Redressal System and Arbitration Mechanism
2.1.5 Guidelines for Participation/Functioning of EFIs and FPIs in IFSC – Amendment
2.1.6 Investments by FPIs in Corporate Debt
2.1.7 SEBI (International Financial Services Centres) Guidelines, 2015–Amendments
2.1.8 Online Filing System for Foreign Venture Capital Investors
2.1.9 Online Filing System for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs)
2.1.10 Online Filing System for Alternative Investment Funds

2.2 REGULATIONS
2.2.1 SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2017
2.2.2 SEBI (Debenture Trustees) (Amendment) Regulations, 2017
2.2.3 SEBI (Issue and Listing of Debt Securities) (Amendment) Regulations, 2017
2.2.4 SEBI (Foreign Portfolio Investors) (Fourth Amendment) Regulations 2017
2.2.5 SEBI (Depositories and Participants) (Second Amendment) Regulations, 2017
2.2.6 SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations 2017

2.3 PRESS RELEASES
2.3.1 SEBI to Initiate Action Against Non -Compliant Companies which are Exclusively Listed
on Dissemination Board

2.3.2 SEBI signs a Bilateral MoU with the European Securities and Markets Authority

3.0 INDIA MARKET UPDATES

3.1 NPCI Gets Final Nod from RBI to Process BBPS Payments
3.2 RBI Permits Non-Executive Chairman to be part of Bank's Audit Committee
3.3 SEBI Imposed Rupees Twelve Lakh Fine on Kwality Ltd, Five Promoters

1.0 RBI REGULATORY UPDATES & DEVELOPMENTS

1.1 Notifications

1.1.1 Notification to Scheduled Commercial Banks
• Master Circular – Credit Facilities for Minority Communities
Reserve Bank has advised all commercial banks that they may ensure a smooth flow of bank credit to minority communities so that they receive a fair and equitable portion of the credit within the overall target of the priority sector.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11030

• Master Circular – Credit Facilities to SCs and STs dated 1st July 2017
All Scheduled Commercial Banks have been advised by Reserve Bank of India to take necessary measures to step up their advances to Schedule Castes (SCs)/Schedule Tribes (STs). These include encouraging SC / ST borrowers to take advantage of credit facilities, ensuring credit flow under Central Government-sponsored schemes where significant reservation/relaxation for the members of the SC/ST communities has been provided.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11031

• Documents to be relied upon for classification for investment in plants and machinery
Banks have been advised that the following documents can be relied upon for ascertaining the investment in plant and machinery for classification of enterprises as Micro, Small and Medium:
a. A copy of the invoice of the purchase of plant and machinery and
b. A certificate issued by a Chartered Accountant regarding the purchase price of plant and machinery.
It has been further clarified that while calculating the investment in plant and machinery, the original price thereof shall be taken into account, irrespective of whether the plant and machinery are new or secondhand.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11050

• Master Direction – Lending to MSME Sector
Reserve Bank of India has issued a Master Direction dated 24th July 2017 on Lending to Micro, Small & Medium Enterprises (MSME) for updating the guidelines/instructions/circulars issued by RBI in this regard.
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11060&Mode=0

• Customer Protection – Limited Liabilities of Customers in Unauthorised Electronic Banking Transaction
Reserve Bank has issued a Circular (dated 6th July 2017) to all Scheduled Commercial Banks revising previously issued directions regarding customer grievances relating to unauthorised transactions resulting in debits to their accounts/cards, and the criteria for determining the customer liabilities in these circumstances. The revised directions include strengthening of systems and procedures by the banks in respect of electronic banking transactions, reporting of unauthorised transactions by the customers to banks, limited liabilities of a customer etc.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11040

1.1.2 Notification to all Authorised Persons
• Investment by Foreign Portfolio Investors (FPI) in Government Securities Medium Term Framework – Review
The FPI investment limits in Government Securities have been enhanced and have been highlighted in para 2.1.2 of the SEBI circular below
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11027

1.1.3 Notification to all Banks
• Master Circular – Facility for Exchange of Notes and Coins
Reserve Bank of India has advised that all branches of banks in all parts of the country are mandated to provide the following customer services, more actively and vigorously to the members of the public:
a. Issuing fresh/good quality notes and coins of all denominations on demand
b. Exchanging soiled/mutilated / defective notes, and
c. Accepting coins and notes either for transactions or exchange
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11028

1.1.4 Notification to all Small Finance Banks
• Small Finance Banks – Compendium of Guidelines on Financial Inclusion and Development
Reserve Bank has issued a circular (dated 6th July 2017) to Small Finance Banks (SFBs) in the private sector enclosing a comprehensive set of guidelines related to Financial Inclusion and Development.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11039

1.1.5 Notification to all Indian Private Sector Banks / Foreign Banks operating in India
• Appointment of Statutory Central Auditors (SCAs) – Modification of Rest period
Reserve Bank of India has advised Indian Private Banks and Foreign Banks operating in India that after completing its four-year tenure in a particular private/foreign bank, an audit firm will not be eligible for appointment as a Statutory Central Auditor of the same bank for six years. Previously this resting period was two years.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=11067


2.0 SEBI REGULATORY UPDATES

2.1 Circulars

2.1.1 Policy of Annual Inspection of Members by Stock Exchanges/Clearing Corporations
SEBI, on 3rd July 2017, brought out guidelines on annual inspections for brokers. The key highlights of the guidelines are as below:

  • The stock exchanges and clearing corporations have been advised to continuously assess the risks posed by their members and review the policy of annual inspection, as and when required, in consultation with SEBI. Clearing activity undertaken by stock brokers for other stockbrokers would be inspected by clearing corporations. Other activities of stockbrokers would be inspected by stock exchanges.
  • The exchanges would have to frame an internal policy for selection of stock brokers for inspections based on alerts from 'risk-based supervision'.
  • Brokers having adverse observations in the internal audit report on high-risk issues such as wrong reporting of margins, transfer of trades, pledging of client securities, and dealing with unregistered intermediaries, would be inspected irrespective of when they were last inspected.
  • Also, special purpose inspections would be carried out based on any triggers such as patterns found during investor complaint resolution/arbitration, complaints on specific malpractices of a broker, or references from various authorities.
  • The top 25 brokers in terms of investor complaints and arbitration cases filed by investors would be inspected, and the top 25 brokers paying high and recurring penalties for non-reporting or short reporting of margin/Client Code modification, or Computer to Computer link software (CTCL), mismatch fines, or any other similar high-risk compliance issue, would also be scrutinised.
  • Brokers who do not fall under any of these categories would be inspected by the exchanges at least once in three years.
  • Also, exchanges would have to establish an information-sharing mechanism with one another on the important outcome of inspection of members who hold multiple memberships of stock exchanges.
  • If stock exchanges and clearing corporations so desire, they can conduct joint inspections of stock brokers. Where a clearing corporation has not been set up, the stock exchange shall inspect all activities of stock brokers including the activity of clearing for other stock brokers.

2.1.2 Investments by FPIs in Government Securities
On 4th July 2017, SEBI issued a circular revising the FPI investment limit in Government securities for the quarter July to September 2017. Key provisions of the circular are detailed below:

  • The limit for FPI investment in Central Government securities enhanced to INR 1,87,700 crore.
  • The investment limit for Long-Term FPIs (Sovereign Wealth Funds, Multilateral Agencies, Endowment Funds, Pension Funds, Insurance Funds and Foreign Central Banks) in Central Government securities was increased to INR 54,300 crore.
  • For State Development Loans (SDLs), the FPI limits were increased to INR 28,500 crore and INR 4,600 crore for general category and long-term investors, respectively.
  • Future increases in the limit for FPI investments in Central Government securities and SDLs will be allocated in the ratio of 75 percent for ‘long-term’ category and 25 percent for ‘general’ category of FPIs.
  • Further, the practice of transferring unutilised limits of ‘long-term’ category to ‘general’ category of FPIs has been discontinued.

All other existing conditions, including the security-wise limits, investment of coupons being permitted outside the limits, and investments being restricted to securities with a minimum residual maturity of three years, will continue to apply.

2.1.3 Guidelines for Issuance of ODIs by FPIs, with Derivative as underlying securities
SEBI has brought out guidelines on the issuance of Offshore Derivative Instruments (ODI) by FPIs, where the underlying assets are derivatives (see circular dated 7th July 2017). The major highlights of the guidelines are as below:

  • FPIs would not be allowed to issue ODIs with derivative as underlying securities, except those derivative positions taken by the ODI issuing FPI for hedging the equity shares held by it, on a one to one basis. "Hedging of equity shares" would mean taking a one-to-one position in only those derivatives which have the same underlying as the equity share.
  • Where the underlying derivatives position is not to hedge the equity shares, the issuing FPI has to liquidate such ODIs latest by the date of maturity or by 31st December 2020, whichever is earlier.
  • In the case of issuance of fresh ODIs with derivatives as underlying, a certificate has to be issued by the compliance officer (or equivalent) of the ODI issuing FPI. It would be certified that the derivatives position, on which the ODI is being issued, is only for hedging the equity shares held by it, on a one-to-one basis. The said certificate shall be submitted along with the monthly ODI reports.

2.1.4 Amendment to Investor Grievance Redressal System and Arbitration Mechanism
To enhance the effectiveness of the grievance redressal mechanism at commodity exchanges, on 11th July 2017, SEBI modified certain provisions of its previously issued circular on ‘Investor Grievance Redressal System and Arbitration Mechanism.’ Key modifications introduced by SEBI are as below:

  • Exchanges will have to disseminate information like brief profile, qualification, areas of experience, number of arbitration matters handled and pre-arbitration experience of the arbitrators on their website.
  • Stock exchanges will have to make necessary arrangements regarding hardware - computer, scanner, and printer - to facilitate the clients to convert their documents into electronic format. Such electronic format will be provided to the arbitrators along with original submissions in physical copies.
  • The Investor Service Committee of the exchanges would review the performance of the arbitrators annually and submit the review report to the Board of the exchange.
  • Besides, exchanges will have to create a common database of defaulting clients accessible to trading members across exchanges.
  • There would be separate panels for arbitration and appellate arbitration. Further, for appellate arbitration, at least one member of the panel should be a retired judge. However, exchanges will have to obtain prior approval of SEBI before empanelment.
  • Changes have also been introduced concerning the composition and functions of the Disciplinary Action Committee, Defaulter’s Committee and Investors Service Committee.

2.1.5 Guidelines for Participation/Functioning of EFIs and FPIs in IFSC – Amendment
SEBI has introduced an amendment to its guidelines about Eligible Foreign Investors (EFIs) wanting to operate in the International Financial Services Centre (IFSC). In case of participation of an EFI not registered with SEBI as an FPI, but wishing to operate in the IFSC, a trading member of the recognised stock exchange in IFSC may carry out the due diligence on its own or it may rely on the due diligence carried out by a bank, which is permitted by RBI to operate in the IFSC, during the account opening process of an EFI.

2.1.6 Investments by FPIs in Corporate Debt
SEBI has partially modified its circular dated 4th August 2016, wherein the Corporate Debt Limit of INR 2,44,323 crore for FPIs was redefined as the Combined Corporate Debt Limit (CCDL) for all foreign investments in rupee-denominated bonds, issued both onshore and offshore by Indian corporates. Key changes are as below:

  • The CCDL would now be available on tap for investment by foreign investors until the overall investment reaches 95%, after which, the auction mechanism shall be initiated for allocation of the remaining limits.
  • A single FPI/ FPI Group cannot bid for more than 10% of the limits being auctioned
  • As rupee-denominated bonds issued by Indian corporates overseas are covered under CCDL, issuance of such bonds overseas shall temporarily cease, until the limit utilisation falls back to below 92%.
  • The auction mechanism shall be discontinued, and the limits shall be once again available for investment on tap when the debt limit utilisation falls below 92%.
  • The custodians would monitor and report the reinvestment facility availed of by the FPIs to the depositories.
  • FPI investments in unlisted corporate debt securities would compulsorily be in dematerialised form and subject to a minimum residual maturity of three years.

2.1.7 SEBI (International Financial Services Centres) Guidelines, 2015–Amendments
To further streamline the operations at International Financial Services Centres (IFSCs), SEBI has amended its International Financial Services Centres Guidelines. The key amendments are as follows:
• Eligibility and shareholding limit for stock exchanges wishing to operate in the IFSC:
a. Any Indian recognised stock exchange or any recognised stock exchange of a foreign jurisdiction can form a subsidiary to provide the services of a stock exchange in the IFSC in which at least fifty-one percent of paid up equity share capital would be held by such stock exchange.
b. The remaining share capital would be held by the following:
o any other stock exchange,
o a depository,
o a banking company,
o an insurance company,
o a commodity derivatives exchange, whether Indian or of a foreign jurisdiction and
o a public financial institution of Indian jurisdiction,
Any one of the entities above would acquire or hold, either directly or indirectly, either individually or together with persons acting in concert, up to fifteen percent of the paid up equity share capital of such stock exchange.
• Eligibility and shareholding limit for clearing corporations wanting to operate in the IFSC:
a. Any Indian recognised stock exchange or clearing corporation or, any recognised stock exchange or clearing corporation of a foreign jurisdiction, shall form a subsidiary to provide the services of a clearing corporation in IFSC wherein at least fifty-one percent of paid up equity share capital shall be held by such stock exchange or clearing corporation.
b. The remaining share capital shall be held by the following:
o any other stock exchange,
o a clearing corporation,
o a depository,
o a banking company,
o an insurance company, whether Indian or of a foreign jurisdiction and
o a public financial institution of Indian jurisdiction,
Any one of the entities above may acquire or hold, either directly or indirectly, either individually or together with persons acting in concert, up to fifteen percent of the paid up equity share capital of such clearing corporation.
• Eligibility and shareholding limit for foreign depositories wanting to operate in the IFSC:
Any regulated depository of a foreign jurisdiction can form a subsidiary to provide the depository services in the IFSC with at least 51% of the paid-up share capital being held by such depository and the remaining shares may be offered to any other registered depository or recognized Stock Exchange or Clearing Corporation, whether Indian or of foreign jurisdiction.
• Setting up of IFSC Depositories Services (IDS) by Indian registered depositories:
Any registered Indian depository is permitted to set up a branch for providing IDS at IFSC after obtaining prior approval of SEBI for setting up such an IDS. Such Indian depository would be required to ring fence its domestic operations, financially, operationally and technologically from its operations at the IFSC.
• Governance:
Depositories, stock exchanges, and clearing corporations operating in the IFSC would have to adopt the broader principles of governance prescribed by International Organization of Securities Commissions (IOSCO) and Principles for Financial Market Infrastructures (PFMIs) and any other governance norms as specified by SEBI. The parent depository/stock exchange/clearing corporation, as applicable, would be responsible for the governance of such entity in the IFSC.
• Intermediaries in IFSC:
Any SEBI registered intermediary (except trading member or clearing member), or its international associates in collaboration with any SEBI registered intermediary may provide financial services relating to the securities market, in the IFSC, without forming a separate company, subject to prior approval of SEBI.
Trading members and clearing members wanting to operate in the IFSC as an intermediary would have to form a company to provide such financial services relating to the securities market, as permitted by SEBI.

2.1.8 Online Filing System for Foreign Venture Capital Investors
On 6th July 2017, SEBI stipulated that all applicants wanting to seek registration as Foreign Venture Capital Investors (FVCIs) are now required to submit their applications online only, through the SEBI intermediary portal. Further, SEBI registered FVCIs are now required to file their compliance reports and submit applications for any request under the provisions of FVCI Regulations, also only through the online system. The portal for such investors to submit all the registration applications online came into effect on 1st July 2017.
Also, existing registered FVCIs have been asked to activate their online accounts.

2.1.9 Online Filing System for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs)
SEBI has introduced an online registration system for REITs and InvITs, to facilitate ease of operations regarding applying for registration, reporting and various compliances under SEBI (Real Estate Investment Trusts) Regulations, 2014 and SEBI (Infrastructure Investment Trusts) Regulations, 2014.
All applicants wanting to register as REITs or InvITs are now required to submit their applications online only, through the SEBI intermediary portal. Existing SEBI registered InvITs have already been advised to activate their online accounts.

2.1.10 Online Filing System for Alternative Investment Funds
At the end of July 2017 to ease the operations regarding applying for registration, reporting and various compliances under the SEBI (Alternative Investment Funds) Regulations 2012, SEBI introduced an online registration system for Alternative Investment Funds.
All applicants desirous of seeking registration as Alternative Investment Funds are now required to submit their applications online only, through the SEBI intermediary portal. The aforesaid online filing system for Alternative Investment Fund came into operation with effect from 31st July 2017.

2.2 Regulations

2.2.1 SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2017
Regulation 18C of the SEBI (Stock Brokers and Sub-Brokers) Regulations has been done away with. With this stock brokers, engaged in buying, selling and dealing in securities (other than commodity derivatives) can buy, sell and deal in commodity derivatives. Similarly, stock brokers engaged in buying, selling and dealing in commodity derivatives are allowed to deal in other securities.

2.2.2 SEBI (Debenture Trustees) (Amendment) Regulations, 2017
On 13th July 2017, SEBI introduced certain amendments to its Debenture Trustees Regulations to align it with the provisions of the Companies Act, 2013. The key highlights of the amendment are:

  • The principal officer has been defined as a person who is entrusted with overseeing the activities of the Debenture Trustee, to include Key Management Personnel (KMP) who in turn can be the CEO, managing director, company secretary, whole-time Director, CFO or such other officer.
  • Earlier, a person could not act as a Debenture Trustee in case of any issue of debentures by an associate. Now, a person cannot be appointed as a Debenture Trustee, if they beneficially own shares in the company, or are promoters, directors or KMPs or employees of the company or its holding, subsidiary or associate company.
  • Besides, a person cannot be appointed as a Debenture Trustee, if they:

            a. are beneficially entitled to money to be paid by the company other than remuneration payable                 to the Debenture Trustee,

            b. are indebted to the company or its subsidiary, holding or associate company,

            c. have furnished any guarantees in respect of the principal debts secured by the debentures,

            d. are a relative of any promoter, director or KMP.

  • The prohibition will also apply if the person has any pecuniary relationship with the company amounting to 2 percent or more of gross turnover or total income of INR 50 lakh or a higher amount during the two preceding years or during the current fiscal.
  • Wherever the government provides guarantees for the debentures issued, the prohibition to act as Debenture Trustee may not be applicable.
  • Debenture Trustees would be responsible for communicating promptly to the debenture holders details of defaults, if any, about payment of interest or redemption of debentures and action taken by the trustee.
  • A Debenture Trustee would be liable for action in case it fails to resolve the complaints of investors; furnishes any false or misleading information to SEBI, or if it does not submit periodic returns or reports; does not co-operate with any inquiry, inspection or investigation conducted by SEBI.

2.2.3 SEBI (Issue and Listing of Debt Securities) (Amendment) Regulations, 2017
On 13th July 2017, SEBI amended its Issue and Listing of Debt Securities Regulations 2008, wherein the following amendments were carried out:

  • The conditions to be fulfilled for carrying out consolidation and re-issuance of debt securities have been revised. For consolidation and re-issuance of debt securities, the issuer must ensure that the Articles of Association of the issuer company do not contain any express/implied provisions contrary to such consolidation and re-issuance.
  • A new provision relating to International Securities Identification Number has been added. Regarding the new provision, any entity issuing debt securities on private placement basis has to adhere to the conditions relating to the issue of International Securities Identification Number, as may be specified by SEBI from time to time.

2.2.4 SEBI (Foreign Portfolio Investors) (Fourth Amendment) Regulations 2017
On 20th July 2017, SEBI notified an amendment to its Foreign Portfolio Investors Regulations, 2014. A foreign portfolio investor would have to collect a regulatory fee of USD 1000 - or any other amount, as specified by SEBI from time to time - from every subscriber of ODIs issued by it and deposit the same with SEBI by way of electronic transfer in the designated bank account of SEBI.
The regulatory fee would be deposited once every three years. A foreign portfolio investor would have to collect and deposit the regulatory fee within two months from 20th July 2017.

2.2.5 SEBI (Depositories and Participants) (Second Amendment) Regulations, 2017
SEBI further amended its Depositories and Participants Regulations, 1996, on 25th July 2017. Regarding the amendment, the depository shall, within fifteen days of receipt of the application, create and record the pledge, after the agreement of the pledgee through its participant, and send an intimation of the same to the participants of the pledger and the pledgee.
The amendment came into force on 25th July 2017.

2.2.6 SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations 2017
SEBI revised its regulations on Issue of Capital and Disclosure Requirements on 31st July 2017. The amendment states that, in case of an initial public offer, the entire pre-issue capital held by persons other than promoters would be locked-in for one year.
This provision would not apply to equity shares held by a venture capital fund or alternative investment fund of Category I or Category II or a foreign venture capital investor.
These regulations would apply to red herring prospectuses registered with the Registrar of Companies on or after 31st July 2017.

2.3 Press Releases

2.3.1 SEBI to Initiate Action Against Non-Compliant Companies which are Exclusively Listed on Dissemination Board
SEBI has decided to initiate action against non-compliant “Exclusively Listed Companies (ELCs) on Dissemination Board (DB)", and its directors/promoters. These companies were earlier listed on non-operational/ de-recognised stock exchanges and were required to be placed on Dissemination Board. The Exclusively Listed Companies were required to comply with the directions issued by SEBI on 10th October 2016.
SEBI had given three months to such companies to submit a plan of action to the Designated Stock Exchanges either to list or to provide an exit to its shareholders. Further, it was also stipulated that failure to comply with the provisions would attract action as specified by SEBI.
SEBI has now extended the time to submit a plan of action by such Exclusively Listed Companies till 30th September 2017.

2.3.2 SEBI Signs a Bilateral MoU with the European Securities and Markets Authority
On 20th July 2017, SEBI has entered into a Memorandum of Understanding (MoU) with the European Securities and Markets Authority under the European Markets Infrastructure Regulation.
The MoU establishes cooperation arrangements, including the exchange of information regarding Central Counterparties (CCPs) which are established and authorised or recognised in India by SEBI, and which has applied for European Union recognition under European Markets Infrastructure Regulation.


3.0 INDIA MARKET UPDATES

3.1 NPCI Gets Final Nod from RBI to Process BBPS Payments
National Payments Corporation of India (NPCI), has received the final authorisation from the RBI to function as the Bharat Bill Payment Central Unit (BBPCU) and operate the Bharat Bill Payment System (BBPS).
On 31st August 2016, eight BBPS operating units had received in-principle approval from RBI. After streamlining the technology and business processes, NPCI has now received the final clearance from RBI. There is a specific direction from RBI to operate the Central Unit as a Strategic Business Unit of NPCI.

3.2 RBI Permits Non-Executive Chairman to be part of Bank's Audit Committee
Previously, any one of the non-executive/non-official directors was supposed to chair the audit committee of the board of the directors of a public-sector bank.
RBI has now clarified that, in banks where the board of directors is chaired by a non-executive Chairman, there will not be any restriction if he/she is also nominated to the audit committee of the board of directors.

3.3 SEBI Imposed Rupees Twelve Lakh Fine on Kwality Ltd, Five Promoters
SEBI has imposed a total penalty of INR 12 lacs on Kwality Ltd and its five promoters for allegedly violating disclosure norms.
The Company was required to disclose acquisition of shares to the company and the stock exchanges under SAST (Substantial Acquisition of Shares and Takeovers) norms.
However, no disclosure regarding the change in shareholding was made to the stock exchanges. Accordingly, SEBI has been fined with a penalty of INR 2 lacs for each of the six entities.

Meenakshi Iyer

Director, Consultancy
Mumbai