LEX-LUMIS

The Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019

On 15 November 2019, the Central Government notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 (FSP Rules). The FSP Rules aim to provide a framework for insolvency and liquidation of systemically important financial service providers (FSPs) other than banks and are currently applicable to non-banking financial companies (NBFCs) with an asset size of INR 500 Crores (approx. USD 70 million) or more, as per a notification issued by the

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Indian Commercial Courts Act Amended

The President of India on 3 May 2018 gave his assent to the ordinance (Ordinance) amending the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Act). By way of background, the Act was enacted with an intention of faster resolution of matters in relation to commercial disputes thereby creating a positive outlook for foreign investors.

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Reserve Bank of India liberalizes External Commercial Borrowing norms

The Reserve Bank of India (RBI), through a circular dated 27 April 2018 (Circular) has further liberalized the External Commercial Borrowing (ECB) norms in light of requests received from corporates and other entities. The Circular simplifies ECB norms with a view to provide access of cheaper funds to corporate borrowers to meet their capital requirements.

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Reserve Bank of India notifies Cross Border Merger Regulations

The Reserve Bank of India (RBI), through a notification dated 20 March 2018, notified the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 (Regulations). The Regulations are intended to facilitate ‘cross border mergers’ i.e., any merger, amalgamation or arrangement between an Indian company and a foreign company in accordance with the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 (Companies Rules) issued under the Companies Act, 2013.

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Minimum Capital Requirements set for FDI into Unregulated Financial Entities

The Indian Ministry of Finance vide a press release issued on 16 April 2018, has finalised the minimum capital requirements for all such activities falling under ‘Other Financial Services’, and those that are unregulated by any financial sector regulator.

As per the extant Foreign Direct Investment Policy, 2017 (FDI Policy) 100% FDI under the ‘automatic’ route is allowed for financial services activities that are regulated by a financial sector regulator inter-alia the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority of India (IRDA).

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The Payment of Gratuity Act, 1972 amended – Gratuity limit raised to Rupees two million

The President of India on 28 March 2018 gave his assent to the Payment of Gratuity (Amendment) Act, 2018 (Amendment Act), thereby amending the Payment of Gratuity Act, 1972 (Act) and which was brought into effect on 29 March 2018 through a notification issued by the Ministry of Labour and Employment, Government of India (MoLE). Through the Amendment Act the Indian government aims to revise the gratuity limit for the employees engaged in private sector and public sector undertakings/ autonomous organizations under the government, to be at par with their counterparts employed in the government sector, thus ensuring harmony.

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SEBI accepts several recommendations of the Kotak Committee on Corporate Governance for listed companies

Securities and Exchange Board of India (SEBI), in its board meeting held on 28 March 2018 in Mumbai accepted several recommendations (with and without modifications) given by the Kotak Committee relating to corporate governance. By way of background, the Kotak Committee was constituted under the chairmanship of Mr. Uday Kotak with a view of enhancing standards of corporate governance of listed entities in India. The Kotak Committee had accordingly submitted its report to SEBI on 5 October 2017.

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Key Highlights of the Union Budget 2018-2019

On 1 February 2018, the Indian Finance Minister presented the Union Budget for the financial year 2018 – 2019 (Budget 2018) in the Parliament and consequently the Finance Bill, 2018 has also been introduced in the Lower House for approval. The focus of Budget 2018 was to strengthen sectors such as agriculture, rural development, health, education, employment and infrastructure.

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India approves further liberalization of Foreign Direct Investment Policy

The Union Cabinet has approved amendments to the Foreign Direct Investment (FDI) Policy with an aim to further liberalise the FDI regime in India. The steps have been undertaken as a continuing efforts of Indian Government in ease of doing business and in order to stimulate a more investor-friendly environment for the foreign players which will boost economic growth and create jobs.

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India notifies the Companies (Amendment) Act, 2017

The President of India and the Indian Parliament have approved the Companies (Amendment) Act, 2017 (Amendment Act), which amends the Companies Act, 2013 (Act). However, provisions of the Amendment Act shall come into force on such date as would be notified by the Central Government in the Official Gazette of India. The amendments to the Act are brought in with an aim to strengthen the corporate governance and enhance the ease of doing business in India.

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