Government of India Cash Management Bills will be treated as Government of India Treasury Bills and accordingly shall be treated as Statutory Liquidity Ratio (SLR) securities.

The Supreme Court has said that in order to assess the damage claim, the insurance companies cannot appoint surveyor after surveyor to get a tailor-made report. If the report of the damage surveyor is not acceptable, the insurance companies have to give valid reason(s) for rejecting such a report. The court said, scheme of section 64-UM of the Insurance Act, 1938 particularly its sub-sections (2), (3) and (4)
would show that the insurer cannot appoint a second surveyor just as a routine matter. If for any valid reason the report of the surveyor is not acceptable to the insuree, it must specify cogent reasons, without which it is not free to appoint second surveyor or surveyors till it gets a report which would satisfy its interest. Alternatively, it can be stated that there must be sufficient ground to disagree with the findings of surveyor/surveyors. There is no prohibition in the Insurance Act for appointment of second surveyor by the insurance company, but while doing so, they has to give satisfactory reasons for not accepting the report of the first surveyor and the need to appoint second surveyor.

The Insurance Regulatory and Development Authority  (IRDA) has extended the deadline to September 1, 2009 for collecting the Permanent Account Number (PAN) from people purchasing insurance policies in which annualized premiums exceed Rs. 1 lakh. 

Insurance Regulatory and Development Authority (IRDA) has issued the final guidelines on corporate governance for the insurance sector, focusing on key areas such as control functions, board of directors, governance structure and disclosures. According to IRDA guidelines on disclosure
requirements, insurers should provide quantitative and qualitative information on their financial and operating ratios, namely, incurred claim, commission and expenses ratios. The disclosure should have actual solvency margin vis-à-vis the required margin, policy lapse ratio by the life insurers and any other matters.

The Ministry of Corporate Affairs (MCA) has formed a core group to converge India's Accounting
Standards with the International Financial Reporting Standards (IFRS) to enhance comparability and
reporting transparency of India Inc's Financial Statements

In a development which surprised analysts, economists, central banks and their own Governments,
the economies of Germany and France moved out of recession with both reporting that their GDP grew up 0.3% quarter-on-quarter in April to June 2009, instead of a drop of about -2%.

The MSCI World Index has increased 12% in the past month and according to President Barrack
Obama, last week's unexpected drop in the US unemployment rate is an indication that the worst may
be over.

American fund houses have launched five more India-funds (ETFs) to tap the growth potential of
Asia's third-largest economy that defied the global recession to post an impressive growth rate of 6.7% last financial year.

Securities and Exchange Board of India (SEBI) has issued guidelines for trading in interest rate futures, as per which the 10-year Government securities can be traded on bourses, a development that will deepen the debt market. According to the guidelines, the contract size for the futures trading would be Rs. 2 lakh with a maximum maturity period of 12 months. The contracts cycle would consist of four fixed quarterly contracts expiring in March, June, September and December.
The notional coupon rate for such trade would be 7% to be compounded every six months.

Securities and Exchange Board of India (SEBI) has issued guidelines for trading in interest rate futures, as per which the 10-year Government securities can be traded on bourses, a development that will deepen the debt market. According to the guidelines, the contract size for the futures trading would be Rs. 2 lakh with a maximum maturity period of 12 months. The contracts cycle would consist of four fixed quarterly contracts expiring in March, June, September and December.
The notional coupon rate for such trade would be 7% to be compounded every six months.

Securities and Exchange Board of India (SEBI) has issued guidelines for trading in interest rate futures, as per which the 10-year Government securities can be traded on bourses, a development that will deepen the debt market. According to the guidelines, the contract size for the futures trading would be Rs. 2 lakh with a maximum maturity period of 12 months. The contracts cycle would consist of four fixed quarterly contracts expiring in March, June, September and December.
The notional coupon rate for such trade would be 7% to be compounded every six months.

Securities and Exchange Board of India (SEBI) has clarified that mutual funds should comply with charging the same exit load to all classes of unit holders.

The Securities and Exchange Board of India has directed mutual fund (MF) industry body, Association of Mutual Funds in India (AMFI), to ensure that MF investors wanting to switch distributors are not asked to get a No-Objection Certificate (NOC) from his existing distributor. The regulator feels such a requirement tantamount to restrictive trade practice.

Securities and Exchange Board of India (SEBI) has reduced the time period taken for finalization of basis of allotment in the rights issues to 15 days from the earlier period of 42 days from the date of closure of the issue. In view of this, it has been decided to amend clause 8.19 of the SEBI (DIP) Guidelines 2000 to provide that the issuer company can utilize the issue proceeds only after the basis of allotment is finalized.

The capital market regulator Securities and Exchange Board of India (SEBI) has barred Austral Coke and Projects Ltd. from raising further funds from the capital market till further orders. An investigation by the income tax department on the residential and business premises of Austral Group revealed that the company has shown bogus purchase and sales worth Rs. 553 crore and Rs. 495 crore, respectively, in the accounts books of the company.

The Bombay Stock Exchange (BSE) has launched an index that will track the value of newly listed companies for a period of up to two years after listing. To start with, it will comprise 45 companies that were listed in the past two years. The base date of the BSE IPO Index is May 3, 2004 and the base value 1,000 Points.

In a move to promote Application Supported by Blocked Amount (ASBA), Securities and Exchange Board of India (SEBI) has clarified that in a public issue, companies will pay a commission to the bank, in addition to the broker, for facilitating this process. ASBA is an arrangement for retail investors where the money does not leave the public issue applicant's bank account till the shares are allotted to that person.

The Bombay High Court (HC) has reserved its judgement in an appeal filed by the Income Tax (I-T)
Department against Bombay Stock Exchange (BSE) brokers who have claimed depreciation on their stock exchange membership cards while calculating tax liabilities. The I-T department's case was that the cards are not the property of the cardholders, but a privilege given to them. Also, it was not capable of diminishing in value due to wear and tear and cannot be depreciated. But brokers argued that it was a license for the firms to carry on their trading activities. It was a commercial right and the firms were entitled to claim depreciation for this intangible asset under the I-T Act.

The Bombay High Court (HC) has reserved its judgement in an appeal filed by the Income Tax (I-T)
Department against Bombay Stock Exchange (BSE) brokers who have claimed depreciation on their stock exchange membership cards while calculating tax liabilities. The I-T department's case was that the cards are not the property of the cardholders, but a privilege given to them. Also, it was not capable of diminishing in value due to wear and tear and cannot be depreciated. But brokers argued that it was a license for the firms to carry on their trading activities. It was a commercial right and the firms were entitled to claim depreciation for this intangible asset under the I-T Act.

The Central Board of direct Taxes (CBDT) has advised its field formations to scrutinize all cases in which companies have amortized foreign exchange losses under the one time discretion allowed by the Government through an amendment to Accounting Standard 11 (AS 11).

Educational institutes having multiple objectives, including imparting education, cannot be denied the
benefit of income tax exemption, the Delhi High Court has ruled. Under the relevant case, the Bench rejected the argument of the Income Tax Department that Jaypee Institute could not be registered under the Act as it was also providing extramural studies, extension programme and field outreach activities, besides imparting education.

A new clause 17A read as "Amount inadmissible under section 23 of the Micro, Small and Medium Enterprises Development Act, 2006" has been inserted by the Central Board of Direct Taxes in Form No.3CD in Appendix II of the Income-tax Rules, 1962 .Accordingly, the tax auditor is required to state the amount of interest inadmissible under section 23 of the Micro, Small and Medium Enterprises Development Act, 2006.

The Ministry of Corporate Affairs (MCA) wants other ministries, state governments and sectoral regulators to recognize Limited Liability Partnerships (LLPs) after over 100 entities registered under the LLP Act.

The Central Board of Excise and Customs has clarified that liability to interest would arise where CENVAT credit is wrongly taken but reversed by the taxpayer even before utilization. Rule 14 of the CENVAT Credit Rules, 2004 ('CENVAT Rules') provides for recovery of credit taken or utilized wrongly along with interest. In the case of CCE vs Maruti Udyog Limited [2007 (214) ELT 173 (P&H)], the High Court had held that the taxpayer is not liable to pay interest where credit was taken but not utilized. The Special Leave Petition ('SLP') against this order was dismissed by the Hon'ble Supreme Court.The Board observed that the High Court decision in Maruti Udyog Limited was delivered in the context of erstwhile Rule 57-I of the Central Excise Rules, 1944 ('Erstwhile Rules') and that the dismissal of the SLP by the Supreme Court was not a judgment. The Board clarified that interest shall be recoverable when credit has been wrongly taken, even if it has not been utilized, in terms of the wordings of Rule 14 of the CENVAT Rules.

In a judgement that stands to benefit contract manufacturers like fast moving consumer goods
(FMCG), pharmaceutical and cosmetic majors, the Bombay High Court has ruled that beverage major
Coca- Cola could avail of tax credit on the service tax it pays for advertising and promotions.

In a clear anti-inflationary move, the finance ministry has rolled back the proposal to impose a 10.3% service tax on goods transported by the railways.

• The maximum quantum of housing loan that can be granted to an individual borrower by a State / Central Cooperative Bank stands revised to Rs. 20 lakh. However, in case of a bank having a net worth of Rs. 100 crore and above [as per the assessment made in NABARD's latest inspection report], the limit will be Rs. 30 lakh.
• The aggregate of housing loans outstanding on any day against individuals, institutions, and societies should not exceed 10 % of total loans and advances of the bank as on March 31 of the preceding year. However, this limit can be exceeded to the extent of funds obtained for the purpose from the higher financing agency and refinance from the National Housing Bank.
• It is clarified that housing loans would not include finance to commercial real estate sector as it has already been advised vide RBI circular No. RPCD.CO.RF.BC No.109/07.38.01/2008-09 dated May 25, 2009.
• For repairs, additions, alterations etc. to the existing houses, the maximum amount of loan per individual borrower stands revised to Rs. 1 lakh.

• The maximum quantum of housing loan that can be granted to an individual borrower by a State / Central Cooperative Bank stands revised to Rs. 20 lakh. However, in case of a bank having a net worth of Rs. 100 crore and above [as per the assessment made in NABARD's latest inspection report], the limit will be Rs. 30 lakh.
• It is clarified that housing loans would not include finance to commercial real estate sector as it has already been advised vide RBI circular No. RPCD.CO.RF.BC No.109/07.38.01/2008-09 dated May 25, 2009.
• The aggregate of housing loans outstanding on any day against individuals, institutions, and societies should not exceed 10 % of total loans and advances of the bank as on March 31 of the preceding year. However, this limit can be exceeded to the extent of funds obtained for the purpose from the higher financing agency and refinance from the National Housing Bank.
• For repairs, additions, alterations etc. to the existing houses, the maximum amount of loan per individual borrower stands revised to Rs. 1 lakh.

• The maximum quantum of housing loan that can be granted to an individual borrower by a State / Central Cooperative Bank stands revised to Rs. 20 lakh. However, in case of a bank having a net worth of Rs. 100 crore and above [as per the assessment made in NABARD's latest inspection report], the limit will be Rs. 30 lakh.
• It is clarified that housing loans would not include finance to commercial real estate sector as it has already been advised vide RBI circular No. RPCD.CO.RF.BC No.109/07.38.01/2008-09 dated May 25, 2009.
• For repairs, additions, alterations etc. to the existing houses, the maximum amount of loan per individual borrower stands revised to Rs. 1 lakh.

• The maximum quantum of housing loan that can be granted to an individual borrower by a State / Central Cooperative Bank stands revised to Rs. 20 lakh. However, in case of a bank having a net worth of Rs. 100 crore and above [as per the assessment made in NABARD's latest inspection report], the limit will be Rs. 30 lakh.
• It is clarified that housing loans would not include finance to commercial real estate sector as it has already been advised vide RBI circular No. RPCD.CO.RF.BC No.109/07.38.01/2008-09 dated May 25, 2009.
• For repairs, additions, alterations etc. to the existing houses, the maximum amount of loan per individual borrower stands revised to Rs. 1 lakh.

• The maximum quantum of housing loan that can be granted to an individual borrower by a State / Central Cooperative Bank stands revised to Rs. 20 lakh. However, in case of a bank having a net worth of Rs. 100 crore and above [as per the assessment made in NABARD's latest inspection report], the limit will be Rs. 30 lakh.
• It is clarified that housing loans would not include finance to commercial real estate sector as it has already been advised vide RBI circular No. RPCD.CO.RF.BC No.109/07.38.01/2008-09 dated May 25, 2009.
• For repairs, additions, alterations etc. to the existing houses, the maximum amount of loan per individual borrower stands revised to Rs. 1 lakh.

• The maximum quantum of housing loan that can be granted to an individual borrower by a State / Central Cooperative Bank stands revised to Rs. 20 lakh. However, in case of a bank having a net worth of Rs. 100 crore and above [as per the assessment made in NABARD's latest inspection report], the limit will be Rs. 30 lakh.
• It is clarified that housing loans would not include finance to commercial real estate sector as it has already been advised vide RBI circular No. RPCD.CO.RF.BC No.109/07.38.01/2008-09 dated May 25, 2009.
• For repairs, additions, alterations etc. to the existing houses, the maximum amount of loan per individual borrower stands revised to Rs. 1 lakh.

RBI has with immediate effect prohibited Miscellaneous Non-Banking Companies (MNBCs) from accepting deposits from public except from the shareholders, subject to the directions issued by the RBI. Any deposit accepted and held by the MNBCs other than from its shareholders as on date shall be repaid on maturity and shall not be eligible for renewal.

RBI has with immediate effect prohibited Miscellaneous Non-Banking Companies (MNBCs) from accepting deposits from public except from the shareholders, subject to the directions issued by the RBI. Any deposit accepted and held by the MNBCs other than from its shareholders as on date shall be repaid on maturity and shall not be eligible for renewal.

Reserve Bank of India (RBI) has decided to increase the minimum Net Owned Funds (NOFs) for stand- alone Primary Dealers (PDs) from Rs. 50 crore to Rs. 150 crore. The revised NOF requirement for the stand- alone PDs, which intend to undertake other permissible activities, is enhanced to Rs.250 crore from the existing level of Rs. 100 crore.

While granting finance to specific housing/ development projects, banks are advised to stipulate as a part of the terms and conditions that:

• the builder / developer / company would disclose in the Pamphlets / Brochures etc., the name(s) of the bank(s) to which the property is mortgaged.
• the builder / developer / company would append the information relating to mortgage while publishing advertisement of a particular scheme in newspapers / magazines etc.
• the builder / developer / company would indicate in their pamphlets / brochures, that they would provide No Objection Certificate (NOC)/ permission of the mortgagee bank for sale of flats/ property, if required.

Export Import Bank of India (Exim Bank) has opened a special funding window for Micro, Small and Medium Enterprises (MSMEs) planning to export their products. The development bank has also mobilized the Grassroots Business Fund, a US-based not-for-profit organization, to offer seed capital to MSMEs for building export units. The special funding window has been created recently to support export marketing initiative taken up by MSMEs. Exim Bank will reimburse 50% of the project cost. The corpus of the new facility has not been specified yet. The bank will offer export marketing finance to MSMEs as a grant. The facility would boost the sector, which has been the Government's focus for quite some time.

Reserve Bank of India (RBI) master circular requires banks to pass on the benefit of 2 % / 4 % interest subvention completely to the eligible exporters upfront and submit the claims to RBI for reimbursement, duly certified by the independent auditor. As per RBI, banks are advised to ensure strict adherence to the extant instructions and initiate corrective measures to ensure strict compliance to the guidelines.

The Supreme Court has ruled that the Government has to mandatory issue a "declaration" for acquiring public land within a year after the "preliminary notification" had been issued, as otherwise, the acquisition proceedings would become illegal. Under Section 4 of the Land Acquisition Act, 1894, the Government has to first issue a "preliminary notification" informing the public about its proposal to acquire the public land in question. Thereafter, under Section 6 of the Act, it has to issue a separate "declaration" about its intent to acquire the land. But under Section 6, it is clearly stated that such a declaration must be mandatory made within a year of the issuance of preliminary notification.

Reserve Bank of India (RBI) had issued a circular RPCD.SME&NFS. BC No. 84A /06.02.31(P) /2008- 09 dated January 20, 2009 regarding extending collateral free loans up to Rs. 5 lakh sanctioned to the units of Micro and Small Enterprises (MSEs) sector (both manufacturing and service enterprises), as defined under MSMED Act, 2006. RBI has received inquiries as to whether these guidelines are advisory or mandatory in nature. In view thereof, RBI has clarified that these
guidelines are mandatory and banks must not obtain collateral security in the case of loans upto Rs. 5 lakh extended to all units of the MSE sector.

The economic growth in India is bringing new challenges and opportunities for the profession of Chartered Accountants. The regulations and laws governing Indian corporates and businesses are changing dramatically and significantly to achieve global standards including:

• Introduction of Direct Tax Code Bill to replace the Income Tax Act and Wealth Tax Act.
• Replacement of Excise laws, Service Tax and VAT by the new Goods and Services Tax (GST) law, hopefully by 1st April, 2010.
• Presentation of The Companies Bill 2009 before the Parliament
• Convergence of Accounting Standards with IFRS by 1st April 2011
• A new accounting standard for SME's on the lines of IFRS-SME standard being considered.
• Existing Auditing and Assurance Standards are being fully replaced by new "Standards on Auditing (SA)" on the lines of International Standards.