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Reserve Bank of India : From 'One-size-fit-All' to Differentiated Guidances

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  After withdrawing Master Direction on AML/CFT by end 2025, Reserve bank of India has come up with individual Master Direction for each segment it manages. 1. Asset Reconstruction Companies (ARCs) ·          Definition: Specialized financial institutions licensed by the Reserve Bank of India (RBI) under Section 3 of the SARFAESI Act, 2002 to acquire Non-Performing Assets (NPAs) or bad loans from banks and financial institutions. ·          Core Functions: o    Purchase stressed assets at a mutually agreed negotiable price to clean bank balance sheets. o    Issue Security Receipts (SRs) to Qualified Buyers (QBs). o    Undertake recovery and resolution strategies such as debt restructuring, change in management, property sales, or insolvency resolutions. ·          Key Regulations: Governed by RBI directions requiring...
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Foreign Exchange Companies and AML/CFT

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  The legal framework for administration of foreign exchange transactions in India is provided by the Foreign Exchange Management Act, 1999. Under the Foreign Exchange Management Act, 1999 (FEMA), which came into force with effect from June 1, 2000, all transactions involving foreign exchange have been classified either as capital or current account transactions. All transactions undertaken by a resident that do not alter his / her assets or liabilities, including contingent liabilities, outside India are current account transactions. In terms of Section 5 of the FEMA, persons resident in India 1  are free to buy or sell foreign exchange for any current account transaction except for those transactions for which drawal of foreign exchange has been prohibited by Central Government, such as remittance out of lottery winnings; remittance of income from racing/riding, etc. or any other hobby; remittance for purchase of lottery tickets, banned / proscribed magazines, football pools...
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