Regulatory Updates: Ministry of Corporate Affairs, Labour Laws, Reserve Bank of India

Notification of provisions relating to Cross Border Merger
Clarifications Regarding Maternity Benefit (Amendment) Act, 2017
Master Directions on Issuance and Operation of Pre-Paid Payment Instruments (PPI)

Ministry of Corporate Affairs

Notification of provisions relating to Cross Border Merger

The Ministry of Corporate Affairs (“MCA”) on 13 April 2017 has notified the provisions of Section 234 of the Companies Act 2013 (“the Act”) and respective rules, allowing for the cross-border merger of an Indian Company with a Foreign Company and vice-versa. The said provisions and Rules are effective from 13 April 2017. The said cross border merger is subject to the prior approval of Reserve Bank of India. Hence, the Company shall obtain the approval of RBI before making an application to National Company Law Tribunal under section 234 of the Act.

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Labour Laws

Clarifications Regarding Maternity Benefit (Amendment) Act, 2017

The Ministry of Labour and Employment on 12 April 2017 has issued clarifications in response to certain questions posed by the public with respect to the provision of the Maternity Benefit Act, 2017. The important clarifications were as follows:

  1. The Act is applicable not only to women employees, but also to contractual employees/consultants;
  2. The enhanced benefit period under the Act will be applicable to women who were already under maternity leave prior to amendment/notification of the Act. However, this will not apply to women who have already completed the prior period of 12 weeks, even if the revised period of 26 weeks is not completed;
  3. Employers are not allowed to dismiss/discharge any woman employee during the time of pregnancy
  4. The Act is also applicable to women who work in mines, plantation, shops and establishments, and factories, in the unorganized sector.

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Reserve Bank of India

Master Directions on Issuance and Operation of Pre-Paid Payment Instruments (PPI)

The Reserve Bank of India (the RBI) has issued the draft guidelines on Master Directions on Issuance and Operation of PPIs. The major changes being made in the Master Directions relate to change in entry point norms, KYC requirements, rationalisation of types of PPIs, consolidation of various categories of PPIs, customer service and protection related aspects such as safety and security of the transactions, forfeiture of unutilised balances, fraud monitoring and reporting requirements, etc.

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