Banking and Financial News

Forex Reserves (The Hindu) – stands at US$ 313.536 b on 13 Jun 2014.

Panel suggests exempting NRIs’ non-repatriable investments from FDI limits

(The Hindu) - A panel headed by finance secretary Arvind Mayaram and set up in 2013 to rationalize the definition of FDI and foreign institutional investment (FII) has suggested.

• treating non-repatriable investments by non-resident Indians (NRIs) as domestic investment,
• exempting it from foreign direct investment (FDI)-related conditions,
• simplifying the classification of foreign investment with a carve-out for NRIs within it “in view of their special status”.
• that foreign investment of 10% or more through eligible instruments made in an Indian-listed company be treated as FDI, while such investment by way of equity shares, compulsorily convertible preference shares or debentures amounting to a less than 10% stake be treated as FPI.
• Foreign investment in an unlisted company, irrespective of threshold limit, may be treated as FDI.

RBI Allows Foreigners to Access Forex Futures, Eases Norms for Banks

(NDTV Profit) - RBI has set a limit of $10 million on banks' proprietary positions in exchange-traded currency futures and also allowed foreign portfolio investors to hedge their currency risk without any underlying up to the same limit. "An FPI (foreign portfolio investor) cannot take a short position beyond $10 million at any time and to take a long position beyond $10 million in any exchange, it will be required to have an underlying exposure," the release said.

Banking Terms

Financial Sector Legislative Reforms Commission (FSLRC)

• Headed by Justice (Retd.) B N Sreekrishna.
• Report submitted in 2013

Major Recommendations

• Setting up Unified Financial Regulatory Agency (UFRA), a super-regulator solely responsible for the oversight of the Securities market, insurance, pensions and commodities.
• UFRA to take over functions of SEBI & IRDA.
• Effectively, only two regulators – RBI & UFRA
• Setting up Financial Sector Appellate Tribunal to review regulatory decisions.
• A new Monetary Policy Committee (including govt. nominees, not RBI alone) to set policy interest rates.
• Finance Minister to head the Financial Stability and Development Council.

God’s love is not restricted to when you think you’ve performed well. He loves you even when you make mistakes and fail. ~ Anonymous