RBI WORKING ON EARLY WARNING SYSTEM FOR BAD LOANS

Mumbai, January 30:  

The Reserve Bank of India on Thursday said the framework to revitalise distressed loans in the economy will be fully effective from April 1. 
 
The framework has been envisaged as there is a need to ensure that the banking system recognises financial distress early, takes prompt steps to resolve it, and ensures fair recovery for lenders and investors.

The RBI said banks and specified non-bank lenders should put in place necessary systems and infrastructure to effectively implement the framework. 
 
The central bank said lenders are encouraged to start early implementation of those elements of the framework which do not require issuance of any notifications or regulatory guidelines, or development of systems at their end. 

The main proposals of the framework include early formation of a lenders’ committee with timelines to agree to a plan for resolution. 
 
Main proposals
Lenders will be given incentives to agree collectively and quickly work out a debt resolution plan; better regulatory treatment of stressed assets if a resolution plan is underway and accelerated provisioning if no agreement can be reached.

To improve the current restructuring process, the framework wants independent evaluation of large-value restructurings mandated, with a focus on viable plans and a fair sharing of losses (and future possible upsides) between the promoters and the creditors. 
 
Future borrowing could become more expensive if borrowers do not co-operate with lenders in resolution. Lenders will be given more liberal regulatory treatment for asset sales.

The RBI said lenders can spread the loss on sale over two years provided the loss is fully disclosed.

 Further, take-out financing / refinancing will be possible over a longer period and will not be construed as restructuring.

The central bank has allowed leveraged buyouts for specialised entities for acquisition of ‘stressed companies’. Sector-specific companies / private equity firms will be encouraged to play an active role in the stressed assets market.

Regulated working hours for Officers, 5 days a week and Compassionate ground appointment” should not lose sight of.

ALL INDIA BANK OFFICERS' ASSOCIATION

Circular No.3/VI/2014

January 27, 2014                                                                                                                              

  CAMP: MUMBAI

TO :

ALL UNITS / STATE COMMITTEES

 

Dear Comrades

 

-                      8^th Round talks – Result

-                      48 hours strike  Revived

-          10^th Feb  2014 6 am to 12^th Feb 2014 6 am.

 

In order to comply with the recorded minutes before CLC (C) on 13^th Jan 2014, the 8^th  round of wage revision talks was held at Mumbai today.  IBA team was captaioned by Shri T M Bhasin ,Chairman Negotiating Committee accompanied by Shri SL Bansal CMD OBC, Shri R K Dubey CMD Canara Bank, Shri Rajiv Rishi, CMD CBI, Dr J N Mishra DMD SBI, Shri Rakesh Sethi, ED PNB, Shri MV Tanksale, CEO IBA, Shri K Unnikrishnan Dy CEO, IBA besides HR department Officials of IBA.  All the eleven Unions participated in this round.

 

2. Preceding the meeting, UFBU held its meeting at SBI Central Office to discuss the plan of action to achieve the goal set.  AIBOA was represented by Com Alok Khare Vice Chairman, Com S S Shishodia President, Com Narendra Kotiawala, Jt Secretary and the undersigned in the meeting.  We have reiterated that the issues raised by the management should be rejected as they affect the basic service conditions of the entire workforce directly or indirectly.  Further it was also placed that “Regulated working hours for Officers, 5 days a week and Compassionate ground appointment” should not lose sight of.

 

3. IBA , while initiating the dialogue, reminded the participating unions to respond to the issues listed earlier ie i) C2C, ii) Hospitalisation linked to Insurance, iii) Negotiations upto Scale III Officers, as they have already  offered from 5% to 9.5% though they were not having the clearance  from the owners.  It was categorically made clear to IBA that the issues raised by them have been already replied in earlier rounds and reiterated that the proposals are totally unacceptable to UFBU.

 

4. After a prolonged exchanges, as the paying capacity is restricted on account of growing NPA in the Balance Sheet coupled with provisioning of pension liability, IBA expressed that they have to  stick to the offer of 10% a meager increase, against the demand of 30% increase in the pay slip component.

 

5. The net result of the entire exercise is to revive the 48 hours strike deferred earlier, from 6 am on 10^th February 2014 to 6 am of 12^th February 2014.

 

MARCH ON TO 48 HOURS STRIKE!

MAKE ALL OUT EFFORTS TO ACHIEVE THE TOTAL SUCCESS OF THE AGITATION !!

 

 

Yours Comradely

  

S NAGARAJAN

GENERAL SECRETARY

PROCEDURE FOR PAN ALLOTMENT

Ministry of Finance24-January, 2014 14:31 IST

PROCEDURE FOR PAN ALLOTMENT PROCESS TO UNDERGO A CHANGE WITH EFFECT FROM 3RD FEBRUARY, 2014

The procedure for PAN allotment process will undergo a change with effect from 03.02.2014. From this date onwards, every PAN applicant has to submit self-attested copies of Proof of Identity (POI), Proof of Address (POA) and Date of Birth (DOB) documents and also produce original documents of such POI/POA/DOB documents, for verification at the counter of PAN Facilitation Centres. The copies of Proof of Identity (POI), Proof of Address (POA) and Date of Birth (DOB) documents attached with PAN application form, will be verified vis a vis their original documents at the time of submission of PAN application at PAN Facilitation Centre. Original documents shall not be retained by the PAN Facilitation Centres and will be returned back to the applicant after verification. ******* DSM/KA (Release ID :102709)

Dear Comrades, maintain our unity and preparedness to accomplish our Demands

We had informed our unions and members, vide our Circular No. 15 dated 13.1.2014, about the outcome of the proceedings of the conciliation meeting held in Delhi by the Chief Labour Commissioner on 13th instant.

As agreed in the meeting, the IBA invited the UFBU for discussions and the bipartite talks were held today in Mumbai in the office of IBA. IBA was represented by Mr T M Bhasin (CMD, Indian Bank) Chairman of the Negotiating Committee, Mr. M V Tanksale, Chief Executive of IBA and other CMDs/EDs who are members of the IBA's negotiating team.

UFBU was represented by the representatives of all the constituent unions.

During the discussions held today, after protracted negotiations, IBA finally agreed to improve their earlier initial offer of 5% on cost of Pay slip components (which amounted to Rs. 1575 crores ) to 9.5 % (amounting to around Rs. 3000 crores) which is exclusive of retirement benefits and other costs.

The IBA also reiterated that they would expedite the negotiations and conclude the Settlement by June, 2014. IBA further informed that the next round of negotiations will be held on 27th January, 2014.

From our side, while explaining the rationale behind our charter of demands, we pointed out that their offer needs to be further enhanced before we can reach any finality. However, looking to their improved offer and assurance to expedite the settlement, it was decided to defer our agitational programmes and proposed strike action on 20th and 21st January, 2014.

We congratulate all our unions and members all over the country for their enthusiastic preparation for the strike which has resulted in the above outcome.

Further developments will be informed to units after the next round of negotiations.

In the meantime, it is necessary to maintain our unity and preparedness which alone can guarantee accomplishment of our demands. 

 http://www.bankunionaibea.in/html/newseve.html
 

Fair wage revision comparable to other equally placed sectors.

Detailed argument put forth before Chief Labour Commissioner:
UFBU’s submission to the CLC on 13-1-2014:
 

Ref: UFBU’s Strike Notice dated 31-12-2013
Ref: Your Communication 21(111)/2013 dt. 2-1-2014
 

We thank you for your above communication in response to our Strike Notice and for holding the conciliation meeting today.

In this connection we wish to submit as under in continuation of the Statement of the case mentioned in our Strike Notice.

Even though the wage revision for bank employees and officers is due from November, 2012 and even though both the IBA and UFBU desired and agreed to conclude the negotiations expeditiously, there has been undue delay on the part of the IBA in making their offer in relation to the additional wage increase that they are prepared to offer on the basis of the charter of demands submitted by the UFBU.

After having waited for nearly an year, and since IBA’s offer was not forthcoming, we gave the call for Strike on 18th December, 2013 and duly served the Notice on them.

Discussions on 14-12-2013: In this background, the IBA called UFBU for discussions on 14-12-2013. During the discussions, the IBA stated that the profitability of the Banks are under stress due to high provisions towards pension cost and higher provisions towards bad loans and hence there were constraints in offering wage increase.

Inadequate offer: After much persuasion from our side, they made an offer of 5% increase over the cost of total payslip components in the wage bill as on 31-3-2012. Since offer was considered by us as too low and did not form any basis for further negotiations, we urged upon the IBA to improve their offer so as to continue the negotiations further.

Unfortunately IBA did not improve their offer.

Conciliation meeting on 16-12-2013:
Based on the strike notice, you had held conciliation meeting at your office on 16-12-2013. In this meeting also, our representatives submitted that the IBA’s offer nowhere matches with our expectations considering the wages paid in other comparable sectors and the need for IBA to improve their offer. 

Despite your best efforts to ensure continuation of talks to work out an acceptable position to both sides so that the strike call can be reconsidered, the IBA could not do so.

Strike became inevitable to express our resentment: Hence the strike on 18-12-2013 was forced on us and became inevitable in the absence of any improved offer from IBA. Even after the successful strike by which the entire workforce in the banks has expressed their resentment over the inadequate offer of the IBA, nothing was heard from the IBA about holding further meetings or improving their offer.

Further strike call: In this background, the UFBU had to meet and decide further programmes of protest actions and strike on 20th and 21st January, 2014.

IBA’s stand unacceptable: IBA’s stand that the profits of the Banks are under stress due to provisions for bad loans and increase in cost of pension, and hence the Banks cannot afford to give higher wage revision is not acceptable. 

Everyone knows that employees are not responsible for bad loans in the Banks. It is all created at the higher level. Nobody is preventing the Banks to take stringent measures to recover the bad loans. But citing it as a reason to refuse reasonable wage revision is not acceptable to us. 

Similarly, pension cost is bound to go up, when the DA on pension is going up due to price rise. Can employees be blamed for the unabated price rise ? Hence this argument is also unfair. 

Profits of the Banks are on the rise only: Despite the unfavourable economic scenario, Banks have been earning good profits over the years.
( Rs. In Crores )

Year	Gross Operative Profits	Net profits
2006-07	42,268	20,152
2007-08	50,307	26,591
2008-09	66,972	34,392
2009-10	76,871	39,257
2010-11	99,981	44,901
2011-12	1,16,335	49,514
2012-13	1,21,943	50,583

Bad Loans are increasing BUT not because of employees:
(Rs. In Crores )

YEAR	BAD LOANS/NPA
31.03.2008	39,030 crores
31.03.2009	44,954 crores
31.03.2010	59,927 crores
31.03.2011	74,664 crores
31-03-2012	117,000 crores
31-3-2013	1,64,461 crores

31-3-2013 PSBs + Private/Foreign Banks 1,94,000 crores
Profits diverted to provide for bad loans – Can employees be
penalised ?
(Rs. In Crores – fig. of PSBs)
Year Provisions made for bad loans from the profits earned by the Banks

2008-09	11,121 crores
2009-10	18,036 crores
2010-11	29,830 crores
2011-12	38,177 crores
2012-13	43,102 crores
In 5 years	1,40,266 crores

Bad loans written off by Banks: (Rs. In Crores)

YEAR	PSBs	OLD PVT	NEW PVT	FOREIGN	ALL BANKS
2007	9189	610	1232	590	11621
2008	8019	724	1577	1334	11654
2009	6966	616	5063	3350	15995
2010	11185	884	6712	6238	25019
2011	17794	682	2336	3083	23895
2012	15551	671	3024	1646	20892
2013	27013	863	3487	855	32218
TOTAL	95,717	5,050	23,431	17,096	1,41,294

There is profit to write off bad loans but no profit to increase wages ?

The total wage bill for the entire 8 lacs employees of the public sector banks for the year ended 31-3-2012 was Rs. 56,000 crores. Now IBA’s offer is 5% increase over the payslip wage components i.e. Rs. 1575 crores

But Rs. 38,000 crores were provided from profits towards bad loans for the year ended 31-3-2012, Rs. 27,000 crores was additionally written off towards bad loans. (Total Rs. 65,000 crores). 

But when it comes to dealing with wage increase, the argument is that Banks cannot afford. This is not acceptable to the UFBU.

Our demands are reasonable:
Our demands are reasonable and also negotiable. UFBU would like to settle the demands through mutual discussions. But if the Banks do not adopt a fair approach, the employees’ resentment would have
to be ventilated through strikes only. We hope that IBA would understand our demands and come forward to settle the demands through amicable negotiations and finalise the settlement at the earliest.

Better wages would result in better profits:
If employees are paid better wages commensurate with the price rise and their workload, it will be a great motivation and incentive to improve productivity and this would lead to more efficiency and better profits for the Banks. 

Hence wage increase should be seen with a positive outlook.
Wage increase will not destroy the Banks;
No Bank in India had so far collapsed or gone into loss due to increase in wages but many Banks have collapsed due to mismanagement and bad loans.

Hence our demand for wage increase should be settled at the earliest.

Review Banking Sector Reforms:
Similarly, the Government is also pursuing policies of banking reforms which are not good for our country.
Government wants to hand over the Banks to private hands, give more licenses to industrial houses and corporates to start their own Banks, allow foreign banks to take over our Banks, giving concessions to defaulting borrowers and write off of huge bad loans of corporates, etc.
These are retrograde steps and hence should be abandoned forthwith.

Strengthen and expand our public sector banking:
Banks should be expanded to reach and serve the common people more effectively. Bank employees are always ready to work more and more for the progress and growth of the Banks so that it will benefit the people at large.

We are ready to resolve the issues by discussions:
UFBU is always open to resolve the demands by discussions and negotiations but IBA and the Government should also be forthcoming.

The present 5% offer of IBA is very very inadequate. IBA should give their revised and better offer to form the basis for further negotiations.

IBA should also come forward to work out a time-bound framework to complete the negotiations early and sign the Settlement expeditiously.

Onus is on IBA and the Government: Peaceful negotiations and expedited settlement or more and more industrial unrest in the vital banking sector depends on the approach of the IBA and the Government. 

What bank employees and officers are expecting and demanding is a fair wage revision comparable to other equally placed sectors. Our demands are legitimate and reasonable.

Delaying and denying the same is unfair.
We seek the intervention of your good offices to prevail upon the IBA and the Government to see reason and come forward with a better offer and positive approach so that bilaterally issues can be resolved through meaningful discussions to reach an expedited settlement.

Sd..
M V Murali
Convener

One more option of pension – Employees who were dismissed/removed but subsequently reinstated

ALL INDIA BANK EMPLOYEES' ASSOCIATION

CIRCULAR NO. 27/47/2013/3 10TH January, 2014

TO ALL UNITS & MEMBERS

Dear Comrades,

• One more option to join Pension scheme in terms of Bipartite Settlement dated 27.4.2010 for those employees who were dismissed/removed from service during period of option but subsequently reinstated due to the decisions of the Court / Appellate Authority.

Units are aware that as per our Bipartite Settlement dated 27-4-2010, employees were given the option again to join the Pension scheme by submitting their option letters within the prescribed time period. However, there were few employees who could not submit the options since they were under punishment of dismissal from service during the relevant option period. However, on appeal to the Appellate Authority or thorough Court decisions, etc. they have been reinstated and now they are still in service/retired on superannuation. Such employees were denied the pension option on the ground that they were not service during the option period. We had brought this to the attention of the IBA and Government and now the Government has cleared the issue and IBA has accordingly advised the Banks that such employees can be allowed to opt for pension on the terms and conditions provided in our Settlement dt. 27-4-2010.

Our unions are requested to take note of the above and inform such eligible employees to submit their option letters to the management and be covered by the pension scheme.

With greetings,

Yours Comradely,

C.H. VENKATACHALAM
GENERAL SECRETARY
Encl: IBA’s Circular dt. 6-1-2014

Indian Banks’ Association

HR & INDUSTRIAL RELATIONS

No. CIR/HR&IR/G2/2013-14/8618

January 6, 2014

Chief Executives of all Public Sector Banks

Dear Sirs/Madam,

One more option of pension in terms of Settlement dated 27.4.2010 –
Employees who were dismissed/removed but subsequently reinstated
due to the decisions of the Court/Appellate Authority.

We would like to bring to your notice that the Ministry of Finance, Government of India vide its letter F.No.4/8/22/2001-IR dated 19.2.2002 (copy enclosed) advised banks to take an appropriate decision with the approval of Bank’s Board only in those cases where the officer/employee could not exercise option because he/she stood either dismissed or compulsorily retied as on 29.9.95 but later on got reinstated either due to decision of the court or appellate authority. In case the incumbent has got full wages for the period of absence due to dismissal etc., such period will be counted as qualifying service for pension. In case the incumbent has not got the benefit of full wages, the period of absence will not be considered as qualifying service for pension. All other requests received by the Bank for different reasons should not be accepted under any circumstances.

After signing the Settlement/Joint Note dated 27.4.2010, for another option of pension, member banks have referred such cases to IBA and enquired as to whether such employees’ pension options can be considered in terms of the Settlement dated 27.4.2010. We had referred the matter to Ministry of Finance and have since received an affirmative reply from the Government. Copy of the letter No. F.4/8/6/2013-IR dated 17.12.2013 is enclosed.

Member Banks may kindly take note of the above guidelines and implement the same.

Yours faithfully,
Sd/-
(Prabir Moulik)
Senior Advisor-HR&IR

IBA to hold wage-revision talks with unions on Jan 17

On the outcome will depend the all-India strike plan on Jan 20-21
Kochi, Jan. 13:  
The Indian Banks’ Association (IBA), which represents the managements of nationalised, private and foreign banks in the country, has invited the United Forum of Bank Unions for wage negotiations on January 17, ahead of the two-day all-India bank strike beginning on January 20.
This follows the suggestion by the Central Chief Labour Commissioner, B.S. Bansariya, who held conciliation talks with the UFBU, a collective of nine bank trade unions, and the IBA. The talks were held at the Labour Ministry’s office in New Delhi on Monday.
The first round of negotiations between the IBA and UFBU will be held at the office of the IBA in Mumbai.
Sources said that at Monday’s talks, Bansariya suggested the two sides hold bilateral negotiations for a wage-revision agreement. The IBA had earlier called the unions for talks on January 29, but the unions had wanted the talks to be held before the strike.
Bansariya pointed out that the two-day strike called by UFBU would inconvenience bank customers and hurt the economy.
He urged the IBA to hold bilateral negotiations before the strike. The IBA agreed and proposed January 17 as the day for talks which the UFBU agreed to, sources said. The unions want the wage negotiation process be held in a time-bound manner, and the two sides have agreed to wrap up the process by June.
STRIKE PLAN

Asked if UFBU would call off the strike in view of Monday’s agreement on negotiations, C.H. Venkatachalam, General-Secretary, All-India Bank Employees Association, said it would not. “We will take a call on the strike based on the outcome of the January 17 talks,” he told Business Line. “If the IBA makes a satisfactory improvement on its initial offer of wage hike, we will revisit the strike call. But if the IBA disappoints us, we will certainly go ahead with the strike.”
The IBA had earlier offered a 5 per cent increase in the ‘payslip component’ which the unions had rejected outright. Since the wage-revision agreement would be in force for five years, the increase should factor in the current and future price rises as well as the increasing workload on the staff, the unions said. The wage accord will impact close to a million banking personnel.

 

http://www.thehindubusinessline.com/industry-and-economy/banking/iba-to-hold-wagerevision-talks-with-unions-on-jan-17/article5574318.ece

Resident Bank account maintained by residents in India – Joint holder – liberalization

RBI/2013-2014/437
A.P. (DIR Series) Circular No. 87

January 9, 2014

To

All Banks Authorised to deal in Foreign Exchange

Madam/Sir,

Resident Bank account maintained by residents in India –
Joint holder – liberalization

Attention of Authorised Dealer (AD) banks is invited to A.P.(DIR Series) Circular No.12 dated September 15, 2011 in terms of which individuals resident in India were permitted to include non-resident close relative(s) (relatives as defined in Section 6 of the Companies Act, 1956) as a joint holder(s) in their resident savings bank accounts on “former or survivor” basis. Such non-resident Indian close relatives are however not eligible to operate the account during the life time of the resident account holder in terms of said instructions.

2. Reserve Bank has received representations that for operational convenience the Non-Resident Indians (NRIs), as defined in Regulation 2(vi) of FEMA Notification No.5 dated May 3, 2000, may be permitted to operate such accounts on “Either or Survivor” basis. Accordingly, on a review, it has been decided that AD banks may include an NRI close relative (relatives as defined in Section 6 of the Companies Act, 1956) in existing / new resident bank accounts as joint holder with the resident account holder on “Either or Survivor” basis subject to the following conditions:

1. Such account will be treated as resident bank account for all purposes and all regulations applicable to a resident bank account shall be applicable.
2. Cheques, instruments, remittances, cash, card or any other proceeds belonging to the NRI close relative shall not be eligible for credit to this account.
3. The NRI close relative shall operate such account only for and on behalf of the resident for domestic payment and not for creating any beneficial interest for himself.
4. Where the NRI close relative becomes a joint holder with more than one resident in such account, such NRI close relative should be the close relative of all the resident bank account holders.
5. Where due to any eventuality, the non-resident account holder becomes the survivor of such an account, it shall be categorized as Non-Resident Ordinary Rupee (NRO) account as per the extant regulations.
6. Onus will be on the non-resident account holder to keep AD bank informed to get the account categorized as NRO account and all such regulations as applicable to NRO account shall be applicable.
7. The above joint account holder facility may be extended to all types of resident accounts including savings bank account.

4. While extending this facility the AD bank should satisfy itself about the actual need for such a facility and also obtain the following declaration duly signed by the non-resident account holder:

“I am the joint account holder of SB/FD/RD/Current Account bearing No ……. which stands in my name and in the name of Shri/Smt. ……….. who is my ………. (state relationship). I hereby undertake that I shall not use the proceeds lying in the above account for any transaction in contravention of the provisions of the Foreign Exchange Management Act (FEMA) 1999, Rules/Regulations made thereunder and the related circulars/instructions issued by the Reserve Bank from time to time. I further undertake that if any such transaction is put through the said account in contravention of the FEMA, 1999 or Rules/Regulations made thereunder, I shall be held responsible for the same. I shall intimate my bank in the event of any change in my Non-resident / Resident status.”

5. Authorised Dealer Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

6. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the FEMA, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully,

(Rudra Narayan Kar)
Chief General Manager In-Charge

Resident Bank account maintained by residents in India – Joint holder – liberalization

RBI/2013-2014/437
A.P. (DIR Series) Circular No. 87

January 9, 2014

To

All Banks Authorised to deal in Foreign Exchange

Madam/Sir,

Resident Bank account maintained by residents in India –
Joint holder – liberalization

Attention of Authorised Dealer (AD) banks is invited to A.P.(DIR Series) Circular No.12 dated September 15, 2011 in terms of which individuals resident in India were permitted to include non-resident close relative(s) (relatives as defined in Section 6 of the Companies Act, 1956) as a joint holder(s) in their resident savings bank accounts on “former or survivor” basis. Such non-resident Indian close relatives are however not eligible to operate the account during the life time of the resident account holder in terms of said instructions.

2. Reserve Bank has received representations that for operational convenience the Non-Resident Indians (NRIs), as defined in Regulation 2(vi) of FEMA Notification No.5 dated May 3, 2000, may be permitted to operate such accounts on “Either or Survivor” basis. Accordingly, on a review, it has been decided that AD banks may include an NRI close relative (relatives as defined in Section 6 of the Companies Act, 1956) in existing / new resident bank accounts as joint holder with the resident account holder on “Either or Survivor” basis subject to the following conditions:

1. Such account will be treated as resident bank account for all purposes and all regulations applicable to a resident bank account shall be applicable.
2. Cheques, instruments, remittances, cash, card or any other proceeds belonging to the NRI close relative shall not be eligible for credit to this account.
3. The NRI close relative shall operate such account only for and on behalf of the resident for domestic payment and not for creating any beneficial interest for himself.
4. Where the NRI close relative becomes a joint holder with more than one resident in such account, such NRI close relative should be the close relative of all the resident bank account holders.
5. Where due to any eventuality, the non-resident account holder becomes the survivor of such an account, it shall be categorized as Non-Resident Ordinary Rupee (NRO) account as per the extant regulations.
6. Onus will be on the non-resident account holder to keep AD bank informed to get the account categorized as NRO account and all such regulations as applicable to NRO account shall be applicable.
7. The above joint account holder facility may be extended to all types of resident accounts including savings bank account.

4. While extending this facility the AD bank should satisfy itself about the actual need for such a facility and also obtain the following declaration duly signed by the non-resident account holder:

“I am the joint account holder of SB/FD/RD/Current Account bearing No ……. which stands in my name and in the name of Shri/Smt. ……….. who is my ………. (state relationship). I hereby undertake that I shall not use the proceeds lying in the above account for any transaction in contravention of the provisions of the Foreign Exchange Management Act (FEMA) 1999, Rules/Regulations made thereunder and the related circulars/instructions issued by the Reserve Bank from time to time. I further undertake that if any such transaction is put through the said account in contravention of the FEMA, 1999 or Rules/Regulations made thereunder, I shall be held responsible for the same. I shall intimate my bank in the event of any change in my Non-resident / Resident status.”

5. Authorised Dealer Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

6. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the FEMA, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully,

(Rudra Narayan Kar)
Chief General Manager In-Charge