Article

Prepaid Instruments – An analysis of master directions issued by RBI

By Manan Chhabra

The article in this issue of Corporate Amicus analyses the Master Direction on Prepaid Payment Instruments (PPI) issued by the Reserve Bank of India recently. The article notes that the latest directions have classified PPIs into two new categories, i.e. small PPIs and full-KYC PPIs, with an aim to simplify the regulatory procedure, as compared to the three categories provided in 2017 (Closed Systems PPI, Semi-Closed Systems PPI, and Open Systems PPI). The author notes that through the latest Master Directions, RBI aims to harmonise the process of issuance and usage of PPIs and ensure interoperability of wallet and card-based PPIs with identified payment systems. He notes that the new directions have also introduced significant security measures to ensure safety of PPI holders while PPI issuers will be required to submit a due diligence report, in addition to the satisfactory system audit report, and a net worth certificate, for the purpose of obtaining the Certificate of Authorisation...

Notifications and Circulars

• SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 notified
• Independent Directors – SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2021 notified
• SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2021 notified
• SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2021 notified
• SEBI (Infrastructure Investment Trusts) (Amendment) Regulations, 2021 notified
• SEBI (Alternative Investment Funds) (Third Amendment) Regulations, 2021 notified
• SEBI (Foreign Portfolio Investors) (Amendment) Regulations, 2021 notified
• Securities Contracts (Regulation) (Second Amendment) Rules, 2021 notified
• Foreign companies or those incorporated outside India – Specified companies exempted from compliance with Sections 387 to 392
• Electronic mode – Companies (Registration of Foreign Companies) Amendment Rules, 2021 and Companies (Specification of definitions details) Third Amendment Rules, 2021 notified
• Companies (Appointment and Qualification of Directors) Amendment Rules, 2021 notified
• Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2021 notified
• Position Limits for Currency Derivatives Contracts clarified
• Accredited Investors – Modalities for implementation of the framework issued
• Alignment of interest of Asset Management Companies (AMCs) with the Unit holders of the Mutual Fund Schemes
• RBI issues Master Direction on Financial Statements - Presentation and disclosures
• Disclosure of shareholding pattern of promoters and promoter group entities clarified
• Non-convertible debt instruments along with warrants – SEBI issues guidelines

Ratio decidendi

• Payment due on fulfilment of certain condition is not financial debt if condition not fulfilled – NCLT Mumbai
• Foreign Arbitral Award when enforceable against non-signatories to the Arbitral Agreement – Supreme Court of India
• No party can unilaterally appoint an Arbitrator as it defeats the purpose of unbiased adjudication – Delhi High Court

News Nuggets

• Withdrawals / modifications by successful Resolution Applicants not permissible during period after acceptance by CoC and before approval by NCLT
• Arbitration not restricted to a one-time measure – Res judicata when not applicable
• Limited Liability Partnership (Amendment) Bill, 2021 receives Presidential assent
• Deposit Insurance and Credit Corporation (Amendment) Act, 2021 receives Presidential assent
• General Insurance Business (Nationalisation) Amendment Act, 2021 receives Presidential assent
• RBI proposes to launch the pilot of its digital currency
• National Vehicle Scrappage Policy launched to phase out old vehicles and reduce pollution
• Vegan food – FSSAI issues draft regulations
• Yahoo India shuts down news sites following changes to FDI policy