| lexspeak |
| Hi Folks |
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Gone are the days when opening a bank account was easy. All that you had to do was to submit a simple, hand-filled form to the Manager of your neighborhood bank with 2 existing account holders signing to confirm that ‘you’ are ‘YOU’. Thanks to technology, bank websites now scream that it is even simpler – just click a button and the Relationship Manager will be there at your doorstep like a genie to complete the seemingly simple but elaborate |
| paper work. Establishing your identity and place of stay – Know Your Customer or KYC – is a show-spoiler though. Especially if you belong to the politically-attractive but economically-ugly, bottom most strata of the society. Without a PAN or an Election ID card or an Aadhaar or its competitor National Population Registry number, you simply do not exist in the eyes of law.
A couple of months back Anita, my former servant maid came wailing to me complaining that the bank was not allowing her to withdraw the meager sum left in her bank account. Pointing to her chemotherapy pricks and a bald head, she said she needed money to buy food and medicines. Though her pass book showed a balance she was shooed away with some strange demand for documents. She was convinced somebody had instructed the bank to block her account. I was flummoxed and knew something was amiss. Only when I accompanied her to the bank did I realize the bank was fulfilling the KYC requirements. The poor woman had nothing to show. Fortunately, the Manager of the Nationalised Bank, an elderly, considerate and experienced man took pity on her plight, and allowed her to close the account based on my declaration that she was staying with me. A swanky private sector bank would never have allowed this. After about 2 hours of running around from counter to counter, Anita’s account was closed and she could withdraw her money. |
| Another incident was with my current maid. She had tears of happiness as well as helplessness – her daughter would get a Rs. 500 scholarship every month from the Government for her academic achievements but the rider was the mother needed to have a bank account. As usual, KYC played the spoil sport. This time the Government School Headmaster walked the extra mile and stepped in to issue a letter to make up for the missing proof of identity and residence. Lakshmi’s account was opened and now she is after me to get her a PAN number ! Not for a moment am I trying to undermine the KYC requirements. The point I am trying to make is in the wake of terrorism, money laundering and other scams, every person seems a suspect, unless proved otherwise. Mundane life has been hit the hardest, more so with the multiplicity of ID cards and passwords. |
| While this issue of Lexspeak focuses on the RBI annual Master Circulars, if you need to refer to any older ones, do visit our Resource Centre on sharadasc.com
Warm regards
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| As is customary, Reserve Bank of India (RBI) has issued Master Circulars (MC) effective from 1st July, 2013, consolidating the various circulars issued till such date. Some of the important MCs are listed below:
 Master Circular: Foreign Direct Investment (FDI)
Master Circular: Establishment of Liaison / branch / project offices in India by foreign entities
Master Circular: Opening of Branch – Subsidiary – JV undertakings abroad by NBFCs
Master Circular: ECB & Trade Credits
Master Circular: Export of Goods & Services
Master Circular: Import of Goods & Services
Master Circular: NRO Account
Master Circular: Miscellaneous remittances from India (Facilities for residents)
Master Circular: Corporate Governance |
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| Foreign investment made prior to 13th February, 2009 shall continue to be governed by the earlier guidelines (FDI Policy Circular, 2013) whereas investments made after the said date must comply with the guidelines notified for the purpose of calculation of total foreign investments in Indian Companies, transfer of ownership, control of Indian Companies and downstream investments by Indian Companies. |
| Within 90 days from 4th July, 2013 any non-compliance w.r.t. transfer of shares, downstream investments must be reported to RBI through the Authorized Dealer, for regularization. |
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