Skip to main navigation

Regulatory activities in India - EY - India

The Fraud Watch: January 2011

Regulatory developments

  • Share

According to the RBI’s new guidelines, in addition to an employer’s authority certificate, banks should insist on at least one officially valid document from employees.

In this section, find out the recent regulatory developments in the Banking industry and a landmark judgment by the Supreme Court.

Banking

The RBI has issued a notification regarding the dispute resolution mechanism under the PSS Act 2007.

This Act provides legal backing for putting in place a formal dispute resolution framework. A dispute resolution mechanism has accordingly been drawn up with which the system providers and system participants of all payment systems authorized to operate in the country need to comply.


The RBI has issued a notification on money rules and operation of bank accounts to prevent banks from being used by criminals for terrorist-financing activities or money laundering. 

The RBI has issued guidelines on its Know Your Customer (KYC) norms, Anti-Money Laundering (AML) standards and Combating of Financing of Terrorism (CFT), which are consolidated in its Master Circular DBOD.AML.BC.No.2/14.01.001/ 2010-11 dated 1 July 2010.


The RBI has issued another notification on opening of bank accounts for salaried employees to safeguard AML standards and CFT. 

Previously, some banks relied on a certificates or letters issued by employers as the only KYC requirement for certification of identity and address proof to open the bank accounts of salaried employees. Such a practice is open to misuse and is fraught with risk.

According to the RBI’s new guidelines, in addition to an employer’s authority certificate, banks should insist on at least one officially valid document, as required in the Prevention of Money Laundering Rules (e.g., passport, driving license, PAN card or voter's identity card or utility bills) to open the bank accounts of salaried employees working in corporate organizations and other entities.


A hallmark judgment under Indian Competition Act 2002

The Supreme Court of India delivered its first judgment under the Indian Competition Act 2002 on the Competition Commission of India’s (CCI)’s appeal against an order of the Competition Appellate Tribunal of India. 

The judgment addressed the following five principal questions of law:

  • Only CCI’s decisions under Section 53 of the Competition Act 2002 are appealable to the tribunal.
  • Neither the parties under investigation nor third parties have the right to be heard during the initial stages (while the CCI is formulating its opinion).
  • The CCI should be a “necessary party” in tribunal cases in which the proceedings relate to a CCI decision or in other appropriate cases.
  • The CCI has the power to grant interim relief, but these powers are to be used sparingly.
  • The Supreme Court has mandated that the CCI should rationalize its decisions, regardless of whether a decision can be appealed against.

More regulatory activities

*Refer to the attached PDF for source information.

Back to top