ECONOMY WATCH
Forward Markets Commission’s Administrative Control shifted to Finance Ministry
SEBI barred 34 entities of Capital Market for Fraudulent Dealings
The administrative control of Forward Markets Commission (FMC), the chief regulator of Forwards and Futures Commodity Markets in India was transferred to Ministry of Finance following the orders of Government of India.
capital market for fraudulent dealings in the shares of 12 companies. Sunil Mehta played a key role in creation of fraudulent deals by envisaging the scheme for manipulation of prices and volumes of the selected scrip’s. The 12 firms include Mavens Biotech, KSL & Industries, KBS Capital Management, Lotus Eye care Hospitals, Panoramic Universal, Asian Star Company, MVL Limited, Rasi Electrodes, Allcargo Global Logistics, Sat Industries, Ushdev International, and Anil Products.
The proposal to this effect was moved in August 2013 in the wake of the alleged scam in the National Spot Exchange Limited (NSEL) of 5600 crore rupees. About Forward (FMC)
Markets
Commission
HQ: Mumbai A statutory body Set up in 1953 Under the Forward Contracts (Regulation) Act, 1952. Overseen by the Ministry of Consumer Affairs, Food and Public Distribution, Govt. of India. Recently, with the decision of Government of India the administrative control of FMC was shifted to Union Finance Ministry. FMC under its ambit regulated futures trading on 21 commodity bourses that include MCX and NCDEX.
RBI Revised Gold Import Norms to Contain CAD To contain the current account deficit, RBI announced some measures to curb the demand for gold by considering one of the major reasons for widening the current account deficit.
Supplies of the metal to special economic zones (SEZs) will not be counted as exports to qualify for further purchases from overseas. As per the existing norms, 20 percent of every lot of imported gold has to be made exclusively available for the purpose of exports. Gold made available by a nominated agency to units in the SEZ and export oriented units, RBI announced that entities and units in SEZs and EoUs, Premier and Star trading houses are permitted to
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With this decision, the regulators of financial sector like SEBI, RBI, IRDA and PFRDA, all have been brought under one roof and that is Ministry of Finance.
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Earlier, the FMC was under the control of the Department of Consumer Affairs under the Ministry of Food.
SEBI barred 34 entities from the
The Reserve Bank of India allowed
the Non-Resident Investors including NRIs to purchase shares on the listed entities and on recognized stock exchanges, through a registered broker, if the investor has already acquired and continues to hold control in accordance with SEBI, RBI has also cleared that the inward remittance using the normal banking channels can be used for payment of the transfer of shares to non-residents consequent to purchase. Escrow Accounts (non-interest bearing) maintained in India can also be used to debit the payment. The prices of the transfer of the shares for the non-resident shareholders would be made in accordance to the pricing guidelines mentioned under, FEMA. Till now, the FIIs (Foreign Institutional Investor), QFIs (Qualified Foreign Investors) and NRIs were eligible to invest and acquire the shares on the recognized stock exchanges of India in compliance with the FEMA (Foreign Exchange Management Act) regulations. But the NRIs were not allowed to acquire shares on exchange (bourses) under the FDI Scheme.
Reserve Bank of India has decided to open a forex swap window to meet the entire daily dollar requirements of three public sector oil marketing companies (IOC, HPCL and BPCL). The decision was taken based on the assessment of current market conditions. Under this Forex Swap Facility Reserve Bank will undertake sell/buy of USD-INR forex swaps for fixed tenor with the oil marketing companies through a designated bank. The swap facility gets operationalzed with immediate effect and will remain in place until further notice.
CCEA approved Continuation of Technology Upgradation Fund Scheme The Cabinet Committee on Economic Affairs on gave its approval for continuing the Technology Upgradation Fund Scheme (TUFS) during the 12th Plan period with a major focus on power-looms in accordance with the Budget announcement for the financial year 201314. The major features of the scheme are as following:
To
promote indigenous manufacturing of the textile machinery, Interest Reimbursement (IR) on second hand imported shuttle less looms shall be reduced from 5 percent to 2 percent. Capital subsidy for handloom and silk sectors would be increased from 25 percent to 30 percent. In addition to this, margin money subsidy cap would be increased from Rs.45 lakh to Rs. 75 lakh in respect of MSME and Jute sectors.
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RBI allowed the Non-Resident Investors to buy Shares under FDI Scheme
RBI introduced Forex Swap Window for Public Sector Oil Marketing Companies
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import gold exclusively for the purpose of exports. The government aims to bring it down to USD 70 billion in 2013-14 fiscal from 88 billion US Dollar in 2012-13. Gold imports in April-July 2013 rose 87 percent to 383 tonnes.
Crucial issues covered are,.
applicable only for the spinning segment and sectoral caps for all other segments have been removed to enable balanced growth across the value chain. These features will help induce capital investment in the textile sector to achieve growth in the fibre, yarn, fabric and garment production chain.
It will generate 11.5 percent annual growth in volume terms in cloth production and 15 percent in value exports by increasing domestic value addition and technological depth.
Small banks vs. large banks, Universal Banking, Continuous Authorisation, Conversion of UCBs into commercial banks, Consolidation, Presence of Foreign Banks in India, Presence of Indian Banks at International Locations, Government Ownership, Deposit Insurance and resolution, Indicative reorientation of the banking structure.
Technology Upgradation Fund Scheme (TUFS) is one of the flagship schemes of the Ministry of Textiles.
RBI imposed Monetary Penalty on 6 Banks for violation of KYC Guidelines
RBI Released the Discussion Paper on ‘Banking Structure in India – The Way Forward’
The Reserve Bank of India imposed monetary penalty of 6 crore 50 lakh rupees on six banks for violation of the Know Your Customer (KYC)/Anti Money Laundering guidelines.
The paper focuses on certain
building blocks for the reorientation of the banking structure with a view to addressing various issues such as enhancing competition, financing higher growth, providing specialised services and furthering financial inclusion. The paper also emphasised the need to address the concerns arising out of such changes with a view to managing the trade off for ensuring financial stability. The paper discussed that the overall thrust of the reorientation is to impart dynamism and flexibility to the evolving banking structure,
Details of Crores)
Penalty
issued:(Values
1
Allahabad Bank
0.50
2
Bank of Maharashtra
0.501
3
Corporation Bank
1.50
4
Dena Bank
2.00
5
IDBI Bank Ltd.
1.00
6
Indian Bank
1.00
in
The RBI has imposed penalties in exercise of powers vested in the Reserve Bank under the provisions of Section 47(A)(1)( c ) read with Section 46(4)(i) of the Banking Regulation Act, 1949. KYC Norms:
Non-adherence to certain aspects of
Know Your Customer (KYC) norms and Anti Money Laundering (AML)
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The Reserve Bank of India released the Discussion Paper on ‘Banking Structure in India – The Way Forward’.
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Sectoral cap of 26 percent will be
guidelines like customer identification procedure, risk categorisation, periodical review of risk profiling of account holders and periodical KYC updation. Non-adherence of KYC norms for walk in customers including for sale of third party products, omission in filing of cash transaction reports (CTRs) in respect of some cash transactions Non-adherence to instructions on monitoring of transactions in customer accounts including walkin-customers. Non-adherence to instructions on import of gold on consignment basis. Non-adherence to instructions on permitted credits to Non-resident accounts.
The Apex Bank has however clarified that till now there is no prima facie evidence of money laundering.
What is SLR? SLR stands for Statutory Liquidity Ratio. This term is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities. It regulates the credit growth in India. The main objectives for maintaining the SLR ratio are as following:
To control the expansion of bank
credit. By changing the level of SLR, the Reserve Bank of India can increase or decrease bank credit expansion. To ensure the solvency of commercial banks. To compel the commercial banks to invest in government securities like government bonds. If any Indian bank fails to maintain the required level of Statutory Liquidity Ratio, then it becomes liable to pay penalty to Reserve Bank of India.
RBI Further relaxed SLR to provide More Funds to Banks for Lending
The Union Cabinet approved the proposal for setting up of the Tax Administration Reform Commission (TARC) to remove ambiguity and establish a stable and nonadversarial tax administration. About the commission
The Commission will consist of a
Chairman, two full time members and four part-time members, of which at least two part-time members will be from the private sector. The Chairman will be an eminent person having wide experience of tax administration and policy making. The two full-time members
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further relaxed the Statutory Liquidity Ratio (SLR) to provide more funds to banks for lending. This was in view of the losses suffered by banks in their investment portfolio. RBI asked banks to reduce their hold-to-maturity bond holdings gradually to 23 per cent of deposits; RBI has now allowed banks to retain those holdings at 24.5 percent. To further ease rupee volatility, RBI will conduct open market operations of long dated government securities worth 8000 crore rupees.
Union Cabinet approved Setting up of Tax Administration Reform Commission
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The Reserve Bank of India (RBI)
Reserve Bank of India (RBI) announced that it will sell the government bonds every Monday to check upon the volatility in the foreign exchange market. The decision of selling the bonds is also a part of the measures taken by the RBI to arrest the weakening of rupees.
Foreign Investment Promotion Board Cleared 12 FDI Proposals Worth 343 Crore Rupees The Union Government of India, cleared 12 FDI proposals worth 343 crore rupees, based on the recommendations of Foreign Investment Promotion Board (FIPB) In the meanwhile, it did not give approval to the US-based Mylan Inc's proposal for acquiring the Indian Pharma company. The decision on Mylan was kept on hold. DIPP (Department of Industrial Policy and Promotion) is working on finalising the FDI policy on the brown field pharma projects, where the transfer of control is involved.
The Reserve Bank of India (RBI) permitted the premature encashment of 8 percent savings (Taxable) Bonds for individual investors who are 60 years and above in age. The facility would be available after a minimum lock-in period of three years from the date of issue of the bond. In case of joint holders, any one of the holders should fulfil the conditions of eligibility. RBI in its notification also clarified that partial encashment of amount invested on a single application will not be permitted. It also directed the Urban CoOperative Banks to stop giving donations to trusts and institutions. Russia Lifted Ban on Import of NonBasmati Rice and Oilseeds from India
Russia lifted the ban on import of
non-basmati rice from India, which will eventually lead to an increase in the export of non-basmati rise from India. Russia also lifted the ban on the oilseeds apart from non-basmati rice. It is important to note that the Russian Federation had imposed ban on these commodities, because of the presence of khapra beetles pest in rice and aflatoxin contamination of peanuts. The International Grain Council (IGC) in the recent past however estimated that the rice export of India in 2013-14 would be 8.5 million tonnes. It is important to note that khapra beetle, also known as Trogoderma granarium. Khapra beetle is one of the most destructive pests of the world found in the stored products as well as seeds.
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RBI announced Weekly Sale of Government Bonds to Check Fall in Rupee Price
RBI allowed premature encashment of 8% Savings Bonds for Investors above 60
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will be with a background in revenue service pertaining to Income Tax and Central Excise and Customs respectively. The term of the Commission will be 18 months. The Commission will review the application of tax policies and tax laws in India and recommend measures to strengthen the capacity of the tax system in India that would reflect best global practices. The Commission will facilitate an efficient tax administrative system that would enhance the tax base as well as tax payer base.
of India and Government of Japan decided to expand their bilateral currency swap arrangement from 15 billion US dollars to 50 billion US dollar till 2015. It is expected that this will contribute to the stability of financial markets. Earlier a bilateral swap agreement was signed between the Bank of Japan and the Reserve Bank of India for 15 billion US dollar. This arrangement aimed at addressing possible short-term liquidity mismatches. The currency swap deal would help the Governments of both the nations to work during emergency situation to tackle the Balance of Payments (BoP) problems. On Indian perspective, the arrangement would help in reversing the fears of Indian side in relation to the worsening situations in context of its Current Accounts Deficit (CAD).
RBI issued norms for Currency Swap Window Reserve Bank of India issued norms for currency swap window that the facility of currency swap would be made available to scheduled commercial banks (excluding regional rural banks) for fresh Foreign Currency Non-Resident Bank (FCNRB) deposits, which would be mobilized for a minimum tenure of three years. The Reserve Bank also mentioned that the deposits can be made in any permitted currency, but the swaps would be made available only in dollars.
A foreign exchange agreement between the two institutions for exchange aspects of a loan in one current for equivalent aspects of an equal in net present value loan in another currency is Currency Swap.
The Government notified GAAR (General Anti Avoidance Rules)
The Union government of India
notified GAAR (General Anti Avoidance Rules). It seeks to check tax avoidance by investors routing their funds through tax havens. It will come into effect from 1 April 2016. The GAAR will apply to entities availing tax benefit of at least 3 crore rupees. It will apply to foreign institutional investors, FIIs that have claimed benefits under any Double Tax Avoidance Agreement (DTAA). Investments made by a non-resident by way of offshore derivative instruments or P-Notes through FIIs, will not be covered by the GAAR provisions.
RBI Banned Zero Percent Interest Rate Schemes for Purchase of Consumer Goods Reserve Bank of India banned zero per cent interest rate schemes for purchase of consumer goods. The decision has taken in order to protect consumer interest. In this regard Reserve Bank of India issued a notification to all the Schedule Commercial Banks and local area banks.
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Government
Currency Swap
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Currency Swap Arrangement with Japan enhanced to 50 billion US dollar
interest is non-existent and such schemes only serve the purpose of alluring and exploiting vulnerable customers. Banks should neither resort to any practice that would distort the interest rate structure of a product nor hide any processing fees. The consumers should not be levied any additional charge for payments made through debit cards. All banks must stop these practices as they violate the very principle of fair and transparent pricing of products which beholds customer rights and protection, especially, in the more vulnerable retail segment. In the zero percent EMI schemes offered on credit card outstandings, the interest element is often camouflaged and passed on to customer in the form of processing fee.
CCEA approved the Methodology for Coal Block Auction
Cabinet Committee on Economic
Affairs (CCEA) approved the methodology for auction by competitive bidding of the coal blocks. The methodology provides for auctioning the fully explored coal blocks and also provides for fast tracking the auction by exploration of regionally explored blocks through up gradation of geological data to a reasonable level of certainty. The methodology approved by the Government provides for production linked payment on rupee per tonne basis, plus a basic upfront payment of 10% of the intrinsic value of the coal block.
be calculated on the basis of Net Present Value (NPV) of the block arrived at through Discounted Cash Flow (DCF) method. To benchmark the selling price of coal, the international FoB price from the public indices like Argus/Platts will be used by adjusting it by 15% to provide for inland transport cost which would give the mine mouth price. The new policy also provides for relinquishment of the block without penalty provided, the bidder has carried out minimum work programme stipulated in the agreement. Ministry of Environment and Forest will review the details of the coal blocks and communicate its findings before the blocks are put to auction.
Cabinet Committee on Economic Affairs Took Steps For Operationalisation of Infrastructure Debt Funds The Cabinet Committee on Economic Affairs (CCEA) took some steps to promote the Operationalisation of Infrastructure Debt Funds (IDFs). Steps taken by the Cabinet Committee on Economic Affairs (CCEA)
Capping of the annual Guarantee
Fee payable to the Concession Authority at 0.05 percent per annum, of outstanding debt financed by the IDF NBFC (Non Banking Financial Companies) for the first three years of operation of the IDF NBFC. Now Infrastructure Debt Funds (IDF) will get the status of Public Financial Institutions (PFI). Infrastructure Debt Funds are
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The very concept of zero per cent
The intrinsic value of coal block will
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Reserve Bank of India Directives
permitted to file Shelf Prospectus under Section 60 A of the Companies Act, 1956 and access to provisions of the SARFAESI Act, including to the adjudicatory process through Debt Recovery Tribunals. Post-successful COD PPP (commercial Operation Declaration) projects shall now be eligible for investment by Insurance Companies, Provident Funds (PFs), EPFO, Mutual Funds (MFs), etc.
RBI Announced Committee to Frame Vision for Financial Inclusion The Reserve Bank of India (RBI) on 23 September 2013 announced the appointment of a Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households under the Chairmanship of Nachiket Mor, who is a Member on the Central Board of Directors of RBI. Objectives of the Committee
The 15-member committee has been
can be sponsored by commercial banks and NBFCs in India in which domestic/offshore institutional investors, specially insurance and pension funds can invest through units and bonds issued by the IDFs. IDFs would essentially act as vehicles for refinancing existing debt of infrastructure companies, thereby creating fresh headroom for banks to lend to fresh infrastructure projects. IDF-NBFCs would take over loans extended to infrastructure projects which are created through the Public Private Partnership (PPP) route and have successfully completed one year of commercial production. Such take-over of loans from banks would be covered by a Tripartite Agreement between the IDF, Concessionaire and the Project Authority for ensuring a compulsory buyout with termination payment in the event of default in repayment by the Concessionaire.
Foundation of MEMU Coach Factory was laid at Bhilwara The foundation stone of Mainline Electrical Multiple Unit (MEMU) Coach Factory was laid on 22 September 2013 at near Rupaheli Station, Bhilwara District, Rajasthan.
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IDFs are investment vehicles which
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About Infrastructure Debt Funds (IDF)
asked to frame a clear and detailed vision for financial inclusion and financial deepening in India. Committee is to lay down a set of design principles that will guide the development of institutional frameworks and regulation for achieving financial inclusion and financial deepening in India. Committee will review existing strategies and develop new ones that address specific barriers to progress, and that encourage participants to work swiftly towards achieving full inclusion and financial deepening, consistent with the design principles. Further, Committee is to develop a comprehensive monitoring framework to track the progress of the financial inclusion and deepening efforts on a nationwide basis. The committee has been asked to submit its final report by 31 December 2013.
Once operational, this factory will meet the demand of MEMU Coaches on Indian Railways to a large extent. Besides, it will generate direct and indirect employment & give thrust to area development. With establishment of the factory Bhilwara will now have a new identity that of MEMU Coach Factory, besides being a textile city. Entire cost of this factory will be incurred by BHEL. Presently the only source manufacturing of the MEMU coaches is Rail Coach Factory (RCF), Kapurthala of Indian Railways, which has been manufacturing about 112 coaches per year. The new factory in Bhilwara will further facilitate the supply of additional MEMU coaches required by Indian Railways. MEMU Trains MEMU trains are very popular in non suburban sections. These trains are usually used by local commuters to commute from nearby rural areas and small towns to bigger cities for work. They have higher carrying capacity. MEMU trains ensure a better and economical mode of transport for people to commute daily for the livelihood. These trains are more powerful and have faster acceleration and deceleration as compared to conventional trains. This results in less running time resulting in saving of 30
RBI Increased the Repo Rate by 25 Basis Points, MSF Rate Brought Down The Reserve Bank of India (RBI) on 20 September 2013 increased the repo rate or the short term lending rate by 25 basis points to 7.5 per cent from 7.25 per cent with immediate effect. This means that the Repo rate has been increased by 0.25 percent. The Governor of RBI, Raghuram Rajan while reviewing the monetary policy for the first time as a Governor, however, brought down the marginal standing facility (MSF) rate by 0.75 per cent to 9.5 per cent. The MSF rate is the one at which the other banks can borrow from the Central Bank. The cash reserve ratio (CRR) remained unchanged at 4 percent. The cash reserve ratio (CRR) is the portion of the deposits which the banks need to maintain in cash with the RBI. The RBI, in the meanwhile, also brought down the minimum daily maintenance of CRR from 99 percent of the requirement to 95 percent with effect from 21 September 2013. All these changes were a part of the monetary policy review for September 2013. The next monetary policy review of the Reserve Bank of India (RBI) is scheduled for 29 October 2013.
RBI liberalised norms for banks to open branches in Tier I cities Reserve Bank of India (RBI) on 19 September 2013 announced that banks can open their branches in tier 1 centres without taking its permission in each case
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This factory is a joint effort of Indian Railways, Government of Rajasthan and BHEL. MOU between Ministry of Railways and BHEL was signed for setting up for this factory on 25 February 2013. MOU between Ministry of Railways and Government of Rajasthan for providing 518 acres of land free of cost for setting up for this factory was signed on 21 September 2013.
percent in energy consumption. These trains are equipped with toilet and are vestibuled for greater passenger comfort.
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MEMU Coach Factory had been approved in the Rail Budget 2013-14 at an estimated cost of 800 crore rupees.
by
Reserve
Banks should open 25 percent of
their branches in a financial year in Un-banked tier-V and tier-VI centers as earlier. Total number of branches in tier –I center’s can’t exceed the number of branches opened in tier-2 to tier-6 centers during a year. If the banks are unable to open all tier – 1 branches during that year, they can carry it over for next two years If the banks unable to open requisite branches in tier- II to tierVI centers for some reason, it should necessary rectify the shortfall in the next financial year. India and Latvia signed agreement on Double Tax Avoidance Agreement The Government of India on 18 September 2013 signed an agreement with Latvia on Double Tax Avoidance Agreement (DTAA) and the Prevention of Fiscal Evasion with respect to Taxes on Income. Latvia is the third Baltic country with which DTAA has been signed by India. Earlier DTAAs were signed with Lithuania and Estonia. The DTAA provides that business profits will be taxable in the source if the activities of an enterprise constitute a permanent establishment (PE) in the source state. The Agreement provides for fixed place of permanent establishment (PE), building site, construction or assembly PE, service PE, Off-shore exploration/exploitation PE and agency PE.
Dividends, interest and royalties
and fees for technical services income will be taxed both in the country of residence and in the country of source. The low level of withholding rates of taxation for dividend, interest and royalties and fees for technical services (10 percent) will promote greater investments, flow of technology and technical services between India and Latvia. The Agreement incorporates provisions for effective exchange of information between tax authorities of the two countries in line with latest international standards, including exchange of banking information and supplying of information without recourse to domestic interest. The Agreement included an article on assistance in collection of taxes. This article also included provision for taking measures of conservancy .The Agreement incorporates antiabuse (limitation of benefits) provisions to ensure that the benefits of the Agreements are availed of by the genuine residents of India and Latvia. The Agreement will provide tax stability to the residents of India and Latvia. It will also facilitate mutual economic cooperation between India and Latvia. About Double Tax Agreement (DTAA)
Avoidance
Double Tax Avoidance Agreement (DTAA) is a bilateral agreement between two countries. The main objective of DTAA is to avoid taxation of income in both countries (means double taxation of same income).
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Conditions Imposed Bank of India (RBI)
Double Tax Avoidance Agreement contains following provisions
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.But RBI imposed some conditions to open branches. According to 2011 census Tier I center are those with population above 1 lakh.
The import duty on Silver was also increased from 10 percent to 15 percent. Before the hike in import duty, Reserve Bank of India (RBI) took several steps to limit the imports to meet genuine domestic demands for jewellery and export purposes. Gold jewellery imported during 2012-13 stood at 5.04 billion US Dollar. In the April-June quarter of the current financial year 2012-13, it was 112 million US Dollar. Value of the gold imports decreased to 650 million US Dollar in August 2013 in comparison to 2.2 billion US Dollar in July 2013. The government hiked the import duty on gold August 2013 for the third time in 2013 as a part of the measures to contain the widening current account deficit. The duty on silver and platinum were also increased to 10 per cent in August 2013.Earlier the import duty on gold was hiked from 4 percent to 6 percent in January 2013. India is the largest importer of gold in the world, which is mainly utilised to meet demand from the jewellery industry. Import of gold is mainly responsible for the rise in Current Account Deficit (CAD) and impacts the foreign exchange reserves of the country as well as the value of rupee. Current Account Deficit (CAD) touched a high of 4.8 per cent of GDP in the 2012-13.
Current Account Deficit occurs when a country's total imports of goods, services and transfers are greater than the country's total export of goods, services and transfers.
RBI appealed garlands
against
currency
The Reserve Bank of India (RBI) on 11 September 2013 appealed the public not to use bank notes for making garlands, decorating pandals and places of worship or for showering on personalities in social events etc. RBI while issuing the appeal explained that using notes in these activities deface the banknotes and shorten their life. Banknotes should be respected as the symbol of the Sovereign and public should not misuse them. People should help in increasing the life span of banknotes. The Reserve Bank of India is taking all measures to supply clean banknotes across the country and urged the members of public to contribute their mite to its efforts in pursuing a clean note policy for the country. There is no specific provision under the Banking Regulation Act, 1949, or under RBI Act, 1934 to check or prevent such misuse of currency notes.
SEBI relaxed KYC norms for foreign investors Securities and Exchange Board of India (SEBI) on 12 September 2013 issued the new Guideline to make Know Your Client requirements (KYC) easy for foreign investors. These guidelines related to registration and disclosure norms for low risk foreign investors.
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The Union Government of India on 17 September 2013 hiked the import duty on gold from 10 percent to 15 percent. The hike is aimed at protecting the domestic industry.
What is Current Account Deficit?
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Union Government of India Hiked the Import Duty on Gold
SEBI classified foreign investors into three categories depending on their risk profile like category I, category II and category III. Category I Category I includes Government and Government related foreign investors such as Foreign Central Banks, Governmental Agencies, Sovereign Wealth Funds, International, Multilateral Organizations and Agencies.
submit proof of identity, proof of address and photographs, submission of the list, identity proof, address proof and photographs for their ultimate beneficial owners. SEBI decision to reclassify foreign investors as per their risk profiles was recommended by a committee headed by former Cabinet secretary K M Chandrasekhar.
Category II Category II includes
Regulated broad based funds such
as Mutual Funds, Investment Trusts, Insurance / Reinsurance Companies. Appropriately regulated entities such as Banks, Asset Management Companies, Investment Managers/ Advisors, Portfolio Managers. Broad based funds whose investment manager is appropriately regulated. University Funds and Pension Funds University related Endowments already registered with SEBI as FII/Sub Account .
Category III Category III includes
All other eligible foreign investors
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Category I investors have been exempted from submission of documents like financial statements and board resolution papers. Their top management, partners, directors, trustees and authorised signatories would not be required to
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investing in India under PIS route not eligible under Category I and II such as Endowments, Charitable Societies/Trust, Foundations, Corporate Bodies, Trusts, Individuals, Family Offices.