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RBI imposes monetary penalty on Tamilnad Mercantile Bank Limited
March 20th, 2024
Posted By: Team-MMTaxClub

The Reserve Bank of India (RBI) has, by an order dated March 13, 2024 imposed a monetary penalty of ₹1,31,80,000/- (Rupees One crore thirty one lakh eighty thousand only) on Tamilnad Mercantile Bank Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Interest Rate on Advances’ and ‘Central Repository of Information on Large Credits (CRILC) - Revision in Reporting’. This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949.

The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2022 (ISE 2022). Based on supervisory findings of non-compliance with RBI directions/statutory provisions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the directions. After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI found inter alia that the following charges against the bank were sustained warranting imposition of monetary penalty. The bank (i) failed to benchmark the interest rate on certain floating rate loans to MSMEs to an external benchmark lending rate; (ii) adopted multiple benchmarks within the same loan category; (iii) failed to price certain floating rate loans with reference to actual benchmark rate applicable to those loans and (iv) wrongly reported external rating of certain borrowers to CRILC.

The action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank

 Source

RBI imposes monetary penalty on DCB Bank Ltd
March 20th, 2024
Posted By: Team-MMTaxClub

The Reserve Bank of India (RBI) has, by an order dated March 13, 2024 imposed a monetary penalty of ₹63,60,000/- (Rupees Sixty three lakh sixty thousand only) on DCB Bank Ltd. (the bank) for non-compliance with certain directions issued by RBI on ‘Interest Rate on Advances’. This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) of the Banking Regulation Act, 1949.

The Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by RBI with reference to its financial position as on March 31, 2022. Based on supervisory findings of non-compliance with RBI directions / statutory provisions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the directions. After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI found inter alia that the following charges against the bank were sustained warranting imposition of monetary penalty. The bank (i) failed to reset the interest rates at the prescribed periodicity in certain MCLR linked floating rate advances and (ii) failed to benchmark the interest rate of certain floating rate retail loans and floating rate loans to MSMEs to an external benchmark lending rate.

The action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

Source

Directions under Section 35 A read with section 56 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) – Colour Merchants Co-operative Bank Ltd., Ahmedabad - Extension of period
March 20th, 2024
Posted By: Team-MMTaxClub

The Reserve Bank of India issued All Inclusive Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Colour Merchants Co-operative Bank Ltd., Ahmedabad vide Directive AMD.DOS.SSM.No.S1053/11-03-039/2023-2024 dated September 25, 2023, for a period of six months up to close of business on March 25, 2024. The Reserve Bank of India is satisfied that in the public interest, it is necessary to further extend the period of operation of the Directive beyond close of business on March 25, 2024.

2. Accordingly, the Reserve Bank of India, in exercise of the powers vested in it under sub-section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949, hereby extends the Directive for a further period of three months from close of business on March 25, 2024 to close of business on June 25, 2024 subject to review.

3. All other terms and conditions of the Directive under reference shall remain unchanged.

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CBIC notifies Agreement or Arrangement on Cooperation and Mutual Administrative Assistance (CMAA) in Customs Matter of India and with other Countries
March 20th, 2024
Posted By: Team-MMTaxClub

- In exercise of the powers conferred by sub-section (2) of section 151B of the Customs Act, 1962 (52 of 1962), the Central Government hereby makes the following further amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue) No. 58/2021-Customs (N.T.), dated the 1st July, 2021, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 467(E), dated the 1st July, 2021, namely:

In the said notification, in the TABLE, after S. No. 16 and the entries relating thereto, the following S. No. and entries shall be inserted, namely

S.No.

Name of contracting State

Agreement or Arrangement on Cooperation and Mutual Administrative Assistance (CMAA) in Customs matters

1)

(2)

(3)

"16A

Republic of Armenia

Agreement between the Government of the Republic of  India  and  the  Government  of  the  Republic  of Armenia  on  co-operation  and  mutual  assistance  in Customs matters

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CBDT Notified in exercise of the powers conferred by section 90 of the Income tax Act 1961
March 20th, 2024
Posted By: Team-MMTaxClub

Whereas, the Convention between the Government of the Republic of India and the Kingdom of Spain for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital came into force on the 12th January, 1995, after the notification by both the Contracting States to each other of the completion of the procedures required under their laws for bringing into force the said Convention;

And whereas, the Central Government in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), had directed that all the provisions of the said Convention annexed to the notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 356 (E), dated the 21st April, 1995, shall be given effect to in the Union of India;

And whereas, paragraph 7 of the Protocol dated the 8 th February,1993, to the aforesaid Convention provides that if under any Convention or Agreement between India and a third State which is a Member of the Organisation for Economic Cooperation and Development , which enters into force after the 1st January, 1990, India limits its taxation at source on royalties or fees for technical services to a rate lower than the rate provided for in this Convention on the said items of income, the same rate as provided for in that Convention or Agreement on the said items of income shall also apply under this Convention;

And whereas, in the Convention between India and Germany, which entered into force on the 26th October, 1996, and Germany was a member of the Organisation for Economic Co-operation and Development at the time of entering into the Convention with India, the Government of India has limited the taxation at source on royalties and fees for technical services to a rate lower than that provided in the Convention between India and Spain on the said items of income;

Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that the following modification shall be made in the Convention notified vide said notification number G.S.R. 356 (E), dated the 21st April, 1995, which are necessary for implementing the said Convention between India and Spain, namely:---

In the said notification, in the Convention annexed therewith between the Republic of India and Kingdom of Spain, in Article 13 relating to Royalties and Fees for Technical Services, for paragraph 2, the following paragraph shall be substituted, namely:---

“2. However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the law of that State, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed ten per cent of the gross amount of royalties or fees for technical services.”

2. The paragraph 2 of Article 13 of the said Convention, as amended by this notification, shall be applicable with effect from the assessment year 2024-25

Source