---
title: "Edition No. 15 | 2 September 2026 | BNPS and Associates LLP"
url: "https://bnpsca.com/insight/edition-no-15-2-september-2026"
description: "KEY HIGHLIGHTS: • RBI notifies Fraud Risk Management Directions, 2026 for commercial banks (RBI/DoS/2026-27/412, 31 Jul 2026) — Board-level Special Committee..."
---

# Edition No. 15 \| 2 September 2026

Topic: **Board Members**

 ![Edition No. 15  |  2 September 2026](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:1200:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/6a97b55e937c0-480-F-221360694-QJQH.jpg)02-09-2026

KEY HIGHLIGHTS:

 • RBI notifies Fraud Risk Management Directions, 2026 for commercial banks (RBI/DoS/2026-27/412, 31 Jul 2026) — Board-level Special Committee, 180-day fraud-classification clock, and a mandatory 21-day show-cause notice before any account is tagged fraudulent.

 • Centre notifies the bonus calculation ceiling under Section 26, Code on Wages, 2019 (25 Aug 2026) — Rs. 7,000 pm or minimum wage, whichever higher — with retrospective effect from 21 November 2025, reopening FY25-26 computations already made.

 • MCA extends the Companies Compliance Facilitation Scheme, 2026 a second time, to 15 September 2026 (Circular 04/2026, 31 Aug 2026) — use the window now for pending ROC filings.

  **—** **CHINTAN'S PERSPECTIVE**

| ![](https://bnpsca.com/public/assets/upload/images/original/6872083e8d605-11.png)  **Chintan N. Patel**  Partner – Financial Reporting & Advisory  *B N P S And Associates LLP* | *This edition's four developments share one thread: compliance dates are moving faster than internal calendars track them, and not always forward. MCA has extended its filing-relief scheme for the second time in eight weeks. RBI has attached a 180-day clock and a show-cause requirement to bank fraud classification that did not exist a month ago. The Code on Wages bonus notification reaches back to November 2025, reopening computations already closed. And the FAQs on foreign companies close a classification gap that has quietly generated avoidable RBI-MCA mismatches. The discipline this edition asks for is retrospective, not prospective: re-check what was already filed, computed or classified before assuming the current rule is the one that applied at the time.* |
|---|---|

**—** **TOP DEVELOPMENTS**

**01** **CORPORATE COMPLIANCE**

**MCA Extends Companies Compliance Facilitation Scheme, 2026 for a Second Time — Window Now Runs to 15 September 2026**

**WHY IT MATTERS** *A fee-relief window for pending ROC filings has been extended twice in eight weeks, the second extension announced the day the first deadline lapsed — a signal of continuing filing backlogs across the ROC system.*

By General Circular No. 04/2026 dated 31 August 2026, MCA extended the Companies Compliance Facilitation Scheme, 2026 (CCFS-2026) to 15 September 2026. The scheme was originally due to close on 15 July 2026, was first extended to 31 August 2026 by General Circular No. 03/2026 dated 8 July 2026, and has now been extended a second time following stakeholder representations seeking further continuation. CCFS-2026 permits companies to complete pending statutory filings at concessional additional-fee terms rather than the standard late-filing penalty.

| **PRACTICAL IMPLICATION** Companies with pending filings should use the window now rather than assume a further extension — MCA has not indicated 15 September is final. Firms managing ROC compliance across group entities should reconcile each entity's filing status against the scheme before the window closes. |
|---|

**02** **BANKING REGULATION & FRAUD RISK**

**RBI Notifies Fraud Risk Management Directions, 2026 for Commercial Banks — New Board Oversight and a 180-Day Classification Clock**

**WHY IT MATTERS** *For the first time, banks must complete the fraud red-flagging-to-classification cycle within a defined 180-day window and give the account holder a show-cause opportunity before classification — a due-process step absent from the earlier framework.*

By circular RBI/DoS/2026-27/412 (DoS.CO.FMG.6/23.04.001/2026-27) dated 31 July 2026, RBI issued the Fraud Risk Management Directions, 2026, applicable to all commercial banks other than Small Finance Banks, Payments Banks and Local Area Banks. Banks must maintain a Board-approved Fraud Risk Management Policy overseen by a Special Committee of the Board of at least three members, including independent directors. The red-flagging-to-classification cycle must ordinarily complete within 180 days of first reporting on the CRILC platform; overruns require Special Committee review and are subject to RBI supervisory examination. Classified cases must be reported within 14 days via Fraud Monitoring Returns; accounts red-flagged with exposure of ₹3 crore or more must be reported within seven days. Before classifying an account as fraudulent, banks must issue a show-cause notice with a minimum 21-day response period and record a reasoned order.

| **PRACTICAL IMPLICATION** Banking and NBFC clients should map current fraud-monitoring workflows against the 180-day clock and the show-cause requirement now — the natural-justice step changes both the timeline and the documentation banks must hold before a classification that also triggers law-enforcement reporting (₹1 crore threshold for private banks, ₹6 crore for public sector banks). |
|---|

**03** **LABOUR LAW & PAYROLL COMPLIANCE**

**Centre Notifies Bonus Calculation Ceiling Under Section 26, Code on Wages, 2019 — With Retrospective Effect from 21 November 2025**

**WHY IT MATTERS** *The wage ceiling used to compute statutory bonus is now fixed by notification — and it reaches back to when the four Labour Codes came into force, not from the notification date.*

The Ministry of Labour and Employment notified, on 25 August 2026, the calculation basis for bonus under Section 26 of the Code on Wages, 2019: for an employee eligible for bonus (wages up to ₹21,000 per month) whose wage exceeds ₹7,000 per month, the bonus is computed as if the wage were ₹7,000 per month, or the minimum wage fixed by the appropriate government, whichever is higher. Both notifications take effect from 21 November 2025, the date the four Labour Codes came into operation, not from the notification date.

| **PRACTICAL IMPLICATION** Confirm which figure is higher in each state — the ₹7,000 floor or the applicable minimum wage — since the comparison is wage-band and location specific; see This Matters More for the retrospective exposure this creates. |
|---|

**04** **CORPORATE LAW & CROSS-BORDER STRUCTURES**

**FAQs Clarify Registration and Classification of Foreign Companies and Indian Subsidiaries of Foreign Body Corporates**

**WHY IT MATTERS** *A recurring point of confusion — whether a 100% foreign-owned Indian company is itself a 'foreign company' — is settled: ownership does not change its classification, but the compliance chain around it is more layered than commonly assumed.*

Published 27 August 2026, the FAQs address the Form FC-1 to FC-4 filing chain under Section 380 of the Companies Act, 2013 (FC-1 within 30 days of establishing a place of business; FC-2 for subsequent projects; FC-3 and FC-4 for annual accounts and returns), the permitted activities for liaison, branch and project offices, and the two-step name-reservation test under Rule 8 (database check, then resemblance evaluation — adding 'India' to a name is not by itself sufficient, and trademark ownership does not override the distinguishability requirement). They confirm that an Indian company that is a 100% subsidiary of a foreign body corporate remains an Indian company and is not itself classified as a foreign company, and that RBI and MCA filings do not automatically cross-reference each other.

| **PRACTICAL IMPLICATION** Groups with liaison, branch or project offices should confirm FC-2 filings are current where RBI approval has been extended or activity has changed, and should not assume CSR exemption for an Indian subsidiary of a foreign parent without checking applicability separately — the FAQs flag this as a common misconception. |
|---|

| **— THIS MATTERS MORE THAN IT APPEARS**  *The Code on Wages bonus notification reads as a routine wage-ceiling clarification. It is not. Both notifications operate from 21 November 2025 — the commencement date of the four Labour Codes — not from the 25 August 2026 notification date. Every bonus computed and paid for FY 2025-26 in the nine months in between, on whatever basis a payroll team assumed applied, is now measured against a rule that did not exist in writing until last week. For employers who paid bonus above the ₹7,000-or-minimum-wage floor believing the higher figure was compliant, the exposure is not prospective — it sits in wages already disbursed and a return already filed.* |
|---|

**—** **AI WATCH**

| FSB Chair Andrew Bailey, in a letter to G20 finance ministers and central bank governors ahead of their 31 August-1 September 2026 meeting, named AI-accelerated cyber risk the 'most immediate concern' for global financial stability. The letter flags that frontier AI could speed vulnerability detection and exploitation faster than institutions can respond, that many jurisdictions lack protocols for managing cutting-edge AI systems, and that reliance on a small number of AI and technology providers creates concentration risk capable of disrupting several firms at once. Recommended action: strengthen vulnerability management and recovery capability, confirm third-party providers' resilience, and plan for simultaneous disruption across firms rather than one. |
|---|

**—** **QUOTE OF THE DAY**

| *“It takes twenty years to build a reputation and five minutes to ruin it.”*  — WARREN BUFFETT |
|---|

**ABOUT BNPS**

B N P S And Associates LLP is a firm of Chartered Accountants having offices at Ahmedabad, Bengaluru, Raichur, Rajkot. The firm provides professional services in the areas of audit, assurance, financial reporting, taxation, risk advisory, due diligence and related professional services. For details refer, [www.bnpsca.com](http://www.bnpsca.com).

**Disclaimer:** This publication is intended solely for informational purposes and should not be construed as professional advice. Readers should seek professional guidance before acting on any information contained herein.

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