Corporate Updates – 01-06-2016


Reserve Bank of India (RBI) has issued Master Direction on Reserve Bank of India (Financial Services provided by Banks) Directions, 2016. As per the Direction, a Bank is not allowed to contribute more than 10% of its Paid up capital and reserves as per last audited balance sheet in factoring subsidiaries and factoring companies. Further it is not allowed to contribute more than 49% in the equity of a Debt funded NBFC. The master Direction does not allow a bank to undertake Mutual fund or Insurance business with risk participation except through a subsidiary set up for the same purpose. An AD Category I Scheduled Bank can become a trading or clearing member if its net worth is more than 500 crores and its NPA does not exceed 3%. The Master Direction came into force from 28th May, 2016.


Securities and Exchange Board of India (SEBI) has notified Disclosure of the Impact of Audit Qualifications by the Listed Entities. The circular requires a Listed Entity to disseminate the cumulative impact of all the audit qualifications in a separate format, while submitting the annual audited financial results to the stock exchanges to ensure that the investment decisions can be taken wisely by investors. This will ensure that the information is available to the investors, without delay, enabling them to take well informed investment decisions. It will further dispense with the existing requirement of filing Form A or Form B for audit report with unmodified or modified opinion respectively and requirement of making adjustment in the books of accounts of the subsequent year. The management of the Companies shall have the option to explain its vies on the audit qualifications. The Circular shall be applicable to all the Listed Companies submitting their Financial Year ended 31st March, 2016.

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