Tuesday, 6 November 2018

Payment Banks and Small Finance Banks

RBI has clarified that Payment Banks and Small Finance Banks are now allowed to access the call money market both as borrowers and lenders. This is allowed even while the process to get themselves included in the second schedule of the RBI Act, 1934. Second schedule are basically scheduled banks and includes commercials banks and co-operative banks.

The payment banks and small finance banks have to adhere to the prudential limits and other guidelines on call money market. They have to follow the master directions on money market instruments which can be found here.   Call money market includes the call/ notice/ term money market.

The RBI notification can be accessed here

Northern Wilderness

In Northern Wilderness, Ray Mears transcends the modest ambitions of travel writing and offers instead a grand meditation on exploration, endurance, and the astonishing elasticity of the human spirit when confronted with immensity. This is no mere manual of survival; it is a reverential chronicle of those men — and the civilisations — who first ventured into the austere sublimity of Canada’s northern expanses, where the boreal forest yields, almost imperceptibly, to the Arctic’s white infinity.

Mears opens amidst the hushed majesty of the boreal wilderness, a realm at once forbidding and beautiful, where silence is not absence but presence. From these shadowed forests the narrative advances, with the inevitability of a great river, into the epoch of the fur trade — that unlikely alchemy by which remote desolation was transmuted into a theatre of imperial ambition. The rise of the Hudson's Bay Company emerges as a pivotal moment in this drama, when commerce, cartography, and destiny entwined to redraw both maps and minds in the Canadian North.

Yet trade is but the overture. The symphony swells in the centuries-long obsession with the Northwest Passage — that tantalising maritime corridor imagined to unite the Atlantic and Pacific through the labyrinthine Arctic archipelago. In chronicling this relentless quest, Mears summons a procession of explorers whose names have been immortalised in the very geography they sought to decipher.

There is Samuel Hearne, whose arduous overland journey carried him to the Arctic coast; Alexander Mackenzie, whose epic river voyage secured his claim to posterity; and David Thompson, that indefatigable cartographer who inscribed vast swathes of western Canada with astonishing exactitude. The maritime exploits of James Cook and George Vancouver enlarge the geographical canvas, while the captivity narrative of John R. Jewitt affords a rare aperture into the complexities of frontier encounter. Most arresting of all is John Rae, whose willingness to embrace Indigenous survival techniques stands as a quiet yet devastating rebuke to the hauteur of empire.

What distinguishes Mears’ treatment of these figures is his refusal of facile heroics. He neither canonises nor condemns; he reconsiders. The explorers who endured were not invariably the most audacious, but the most adaptable. They survived the Arctic’s pitiless winters not through obstinate defiance, but through humility — by apprenticing themselves to Indigenous knowledge, adopting local clothing and hunting methods, mastering native travel techniques, and cultivating a profound respect for the land’s austere rhythms. In this recognition lies the book’s subtle yet powerful thesis: the Arctic does not yield to conquest; it yields to comprehension.

Thus Northern Wilderness evolves into something richer than an adventure chronicle. It becomes a meditation on humility before nature, and an affirmation that wisdom — especially Indigenous wisdom — is the truest compass in unfamiliar terrain. Through its elegant interweaving of history, geography, and bushcraft philosophy, the work stands as both tribute and testament: to those who mapped the unknown, and to the enduring lessons whispered by the North’s vast and unvanquished silence. Goodreads 4/5


Eligibility criteria for sponsors - ARCs

RBI has released guidelines on the fit and proper criteria for the sponsors of the asset reconstruction companies.

Determinants of fit and proper status of sponsors of ARCs
In determining whether the sponsor is fit and proper, the Bank shall take into account all relevant factors, as appropriate, including, but not limited to, the following:
(i) The sponsor’s integrity, reputation, track record and compliance with applicable laws and regulations;
(ii) The sponsor’s track record and reputation for operating business in a manner that is consistent with the standards of good corporate governance, integrity, in addition to the similar assessment of individuals and other entities associated with the sponsor;
(iii) The business record and experience of the sponsor;
(iv) Sources and stability of funds for acquisition and the ability to access financial markets;
(v) Shareholding agreements and their impact on control and management of the ARC.

Continuous monitoring arrangements for due diligence in case of existing sponsors
(i) For the purpose of ensuring that all its sponsors are fit and proper, every ARC shall
(a) obtain within one month of the close of financial year a declaration from all its sponsors in Form I as specified in the schedule to these Directions;
(b) furnish a certificate in Form III, by the end of May every year, to the Reserve Bank on the changes in the status of the sponsor.
(ii) Every ARC shall examine any information on the sponsors which may come to its notice that may render such persons not fit and proper to hold such shares and shall immediately furnish a report on the same to the Bank.

Bank notification can be found here

Badhai Ho

Badhaai Ho (2018), directed with admirable restraint by Amit Ravindernath Sharma and penned by Akshat Ghildial and Shantanu Srivastava, is that rare Hindi film which manages to be both uproariously funny and quietly subversive. Featuring a sterling ensemble—Ayushmann Khurrana, Neena Gupta, Gajraj Rao, Surekha Sikri, and Sanya Malhotra among others—it transforms what might have been a gimmicky premise into a tender meditation on family, propriety, and the tyranny of social embarrassment.

Set within the comforting clutter of a middle-class Delhi household, the narrative is catalysed by a development as biologically natural as it is socially inconvenient: Jitender (Gajraj Rao) and Priyamvada Kaushik (Neena Gupta), parents to two grown sons, discover they are expecting a child. What ought to be a private matter of conjugal joy becomes, instead, a public spectacle—eliciting mortification from their adult children and moralistic murmurs from a society that prefers its middle-aged couples desexualised and decorous.

Unlike the bombast that often characterises mainstream Bollywood, Badhaai Ho approaches its ostensibly “taboo” subject—late-in-life pregnancy and middle-aged intimacy—with a maturity that is both refreshing and quietly radical. The film dissects, with gentle irony, the hypocrisies surrounding sex, ageing, and respectability. It lays bare the generational dissonance that arises when adult children confront the inconvenient truth that their parents possess lives—and desires—independent of parenthood. Yet, at its heart, the film is not accusatory but empathetic, charting a journey from shock and embarrassment to acceptance and solidarity. The humour springs not from slapstick exaggeration but from recognisable human reactions, rendering the comedy organic and disarmingly relatable.

The film’s emotional ballast rests securely upon its ensemble. Neena Gupta is luminous as Priyamvada, imbuing her character with a poignant blend of vulnerability and quiet fortitude. Gajraj Rao’s portrayal of the well-meaning, slightly diffident husband is a masterclass in understated performance. Ayushmann Khurrana, as the eldest son Nakul, captures with commendable nuance the oscillation between filial discomfort and reluctant maturity, even as he navigates his own romantic entanglements. Surekha Sikri, formidable as ever, lends the grandmother both gravitas and wry humour, while Sanya Malhotra and Sheeba Chaddha enrich the narrative tapestry with finely etched supporting turns.

Amit Sharma’s direction deserves particular commendation for its tonal equilibrium. He resists the temptation of melodrama, allowing sentiment and satire to coexist without either overwhelming the other. The screenplay is crisp, the dialogues situationally witty, and the emotional crescendos earned rather than engineered. In eschewing caricature, the film achieves something far more enduring: authenticity.

Ultimately, Badhaai Ho is more than a comedy of manners; it is a celebration of familial resilience and emotional evolution. By daring to normalise what society awkwardly stigmatises, it affirms that love and intimacy are not the exclusive preserve of youth. In doing so, it secures its place as a delightful yet discerning family drama—one that balances humour with heart, and social commentary with grace.

12.03 kms in Aarey Forest

A 12.03 kms run in Aarey Forest on 28th October (posting late). Going to Aarey after a long time, so it was quite tough, but weather was very pleasant. No plan on any distances, but felt good so kept on running all the flat surfaces in Aarey (did not want to do too many hills). Aarey Forest is beautiful, a heaven in a mega city. Pity that the Chief Minister wants to destroy this beautiful forest for his stupid metro car shed project.

change in financial year

The Companies Act, 2013 when it was introduced had mandated that all companies will have a uniform accounting year i.e. April to March each year. But the Act had given exemptions to those companies who were holding or subsidiary or associate company of a company incorporated outside India and which were required to have a different financial year than from April to March, then such companies can make an application to the Tribunal for change in their financial year accordingly.

Many companies fell under that ambit and one of my client companies also was a subsidiary of a foreign holding company. Accordingly the application was made to the CLB (when it existed) and even the CLB officials were unaware at that time that such matters are required to come to them. The application and hearing was a farce and the request was granted automatically and mechanically. So much for ease of doing business. The companies act, 2013 when it got notified was replete with such draconian provisions.

Now vide the Companies Act, ordinance, 2018 that application process had been taken away and given to the Regional Director. Of course with the CLB having been extinguished, all such applications would have been going to the NCLT, which is a sheer waste of their time and resources.

In my view, it should be no approval and all that stuff. Company should just inform that it is changing its financial year because of the reasons specified. So much for ease of doing business. 

Friday, 2 November 2018

certificate of commencement of business

MCA has vide its Companies (Amendment) Ordinance 2018 inserted a new section 10A after the existing section 10 wherein companies incorporated after this Ordinance has come into force i.e. from 2nd November, 2018 are required to file a certificate of commencement of business before it commences business or exercises borrowing powers. Which means that unless this certificate of commencement of business is filed with the ROC, it cannot start issuing invoices and receiving moneys.

The declaration has to be filed by a Director of the company within a period of 180 days from the date of incorporation to the effect that the subscribers to the memorandum have paid in their subscription monies. The declaration will also include a verification about the registered office of the company. I guess the form of verification of the registered office i.e. form INC-22 will be modified to that extent.

Which means that the company can open a bank account and the bank account can be used only for accepting the subscription monies from the subscribers to the memorandum, but no other receipts can be made into that account unless the certificate of commencement of business has been filed. This is an onerous requirement which ensures that only genuine people start companies with an intention of doing business. We have seen many shell companies being incorporated with no business in it for years and years.

This requirement of certificate of commencement of business was there when the Companies Act, 2013 was promulgated in 2013 but subsequently removed by the MCA under the banner of "ease of doing business". Wonder what prompted the Ministry to bring this draconian requirement back into the statute books.

The penalty for non compliance with this section is huge. Rs.50,000 for the company and Rs.1000 per day for every officer in default. Max amount of penalty Rs.100,000/-

Where no declaration has been filed the ROC has now powers to strike off the name of the company from its records.

A Better India, A Better World

N. R. Narayana Murthy’s A Better India, A Better World is an unusual book in that it is neither quite an autobiography nor an economic trea...