Fema Notifications

Maintenance of Accounts in India by a Person Resident outside India

Fema / RBI - FEMA regulates, prohibits and restricts acceptance of deposits by Person Resident in India from a Person Resident outside India (PROI) and prescribes maintenance of accounts in India by PROI. This article provides an insight to the same....

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FAQS on Issuance of Rupee denominated bonds overseas

Fema / RBI - 1. Who can issue? Any corporate (entity registered as a company under the Companies Act, 1956/ 2013) or body corporate (entity specially created out of a specific act of the Parliament) is eligible to issue Rupee denominated bonds overseas. Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) coming under th...

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Consolidated FDI Policy of 2015 – Key changes & Comparative

Fema / RBI - The Ministry of Commerce & Industry released the consolidated Foreign Direct Investment policy of 2015 effective from May 12, 2015. We list below the key changes. Further, a detailed comparative of changes incorporated in FDI Policy 2015 juxtaposed with the consolidated FDI policy of 2014 is specified in Annexure A. ...

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Import of gold on consignment basis by both nominated agencies and banks shall now be permissible only to meet the needs of exporters of gold jewellery

Fema / RBI - It has further been decided that all Letters of Credit (LC) to be opened by Nominated Banks / Agencies for import of gold under all categories will be only on 100 per cent cash margin basis. Further, all imports of gold will necessarily have to be on Documents against Payment (DP) basis. Accordingly, gold imports on Documents against Acce...

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Recent Liberlisation and Simplification in Softex Procedure, Payment allowed to be recd. in advance beyond one year, Release of Foreign Exchange for Imports

Fema / RBI - Considering the spurt in volume of software exports from India in recent times, other complexities involved in execution of work contracts and time consumed in the certification of SOFTEX forms, a simplified procedure has since been finalised by the Reserve Bank. Under the revised procedure, a software exporter, whose annual turnover is a...

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Carrying of INR 10,000 by Non-residents and Residents : RBI Clarifies

Fema / RBI - In terms of instructions issued vide A.P. (Dir Series) circular No.45 dated September 16, 2013, the Reserve Bank of India had facilitated encashment of rupees into convertible currencies even beyond Immigration/Customs desk.  This instruction has been misreported in certain sections of the media as a new restriction imposed by the Reserv...

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Fema – Review of all-in-cost (AIC) on External Commercial Borrowings (ECB) and Trade Credit

Fema / RBI - On a review of the conditions in the global financial markets, it has been decided to continue with the enhanced all-in-cost ceiling for ECB and trade credit for a further period of six months as under:...

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RBI permission no longer required for cut in sanctioned ECB limit

Fema / RBI - As per the extant ECB procedures, requests for reduction in the amount of ECB, changes in the drawdown schedule and reduction in the all-in-cost of the ECB after obtaining the loan registration number (LRN) is required to be referred by the bank concerned to the RBI for necessary approval. Simplifying norms for overseas borrowers, the RBI...

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Govt to notify 100% FDI in single-brand retail soon

Fema / RBI - The government says it will soon notify 100 per cent foreign direct investment in single-brand retail. Secretary in the Department of Industrial Policy and Promotion (DIPP) P K Chaudhery said this in response of a question about issuance of notification of 100 per cent FDI in single-brand retail....

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Foreign individuals can invest directly in public issues

Fema / RBI - In a major policy decision, the Central Government has decided to allow Qualified Foreign Investors (QFIs) to directly invest in Indian equity market in order to widen the class of investors, attract more foreign funds, and reduce market volatility and to deepen the Indian capital market. QFIs have been already permitted to have direct ac...

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FEMA – Claim for interest in the nature of compensation for wrongful retention of money is not maintainable

Directorate Of Enforcement Vs. Subhash Muljimal Gandhi (Delhi High Court) - Directorate of Enforcement Vs. Subhash Muljimal Gandhi ( Delhi HC)- that interest at the rate of 6% per annum under Rule 8 could have been awarded to the respondent on the seized Indian currency only. The learned Single Judge has however applying the said Rule also awarded interest on the seized fo...

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SC asks Ketan Ketan Parikh and Co to Deposit deposit 50 percent of penalty imposed for Fema violations

Ketan V. Parekh Vs. Special Director, Directorate of Enforcement and another (Supreme Court of India) - Ketan V. Parekh Vs. Special Director, Directorate of Enforcement and another (Supreme Court)- Ketan Parikh, Kartik Parikh and M/s. Panther Fincap and Management Services Ltd, were imposed a penalty of Rs. 80 Crores, 12 Crores and 40 Crores respectively by the Special Director of Enforcement, Mumbai ...

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Section 45(1A) of the Prevention of Money Laundering Act, 2002 – Binod Kumar Versus State of Jharkhand & Others

Binod Kumar Vs State of Jharkhand & Others (Supreme Court of India) - Binod Kumar Versus State of Jharkhand & Others- In the impugned judgment, it is mentioned that the basic allegation is amassing of illicit wealth by various former Ministers, including a former Chief Minister of the State. The money alleged to have been so earned is of unprecedented amounts. However...

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Foreign exchange –Contravention of provisions of Act–Liable to prosecution as well as penalty by adjudicating officer

Radheshyam Kejriwal Vs. State of West Bengal & ANR. (Supreme Court of India) - Foreign exchange --Contravention of provisions of Act--Liable to prosecution as well as penalty by adjudicating officer--Proceeding before adjudicating officer for acts considered offence--Exoneration in adjudication proceedings--No case for criminal proceedings thereafter on same facts--Foreign Exc...

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Appeal No.: Writ Petition Nos. 23110 & 23558 of 2009, dated: 26.03.2010

P. Giribabu Vs. Dy. Director of Enforcement (Madras High Court) - The relief sought for by the petitioner seeking permission to be accompanied by an advocate of his choice when he appears before the Enforcement Directorate in pursuance of the summons issued under section 37 of the Foreign Exchange Management Act, 1999 and recording of statement in the presence of ...

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No approval to open offices in India to foreign law firms/companies or foreign lawyers : RBI

Notification No. RBI/2020-21/69 A.P. (DIR Series) Circular No. 07 - (23/11/2020) - AD Category – I banks are directed by RBI to not to grant any approval to foreign law firms/companies or foreign lawyers to open any branch office, project office, liaison office or other place of business in India under FEMA for the purpose of practicing legal profession in India....

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Banks to Publish summary of FEMA Compounding Orders on their website instead of Orders

RBI/2020-21/67 A.P. (DIR Series) Circular No. 06 - (17/11/2020) - On a review and in partial modification of earlier instructions it has been decided that in respect of the Compounding Orders passed on or after March 01, 2020 a summary information, instead of the Compounding Orders, shall be published on the Bank’s website in the following format:...

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RBI discontinues 17 types of FEMA Returns/Reports

RBI decided to discontinue the 17 returns/reports as listed under under Foreign Exchange Management Act, 1999 which includes Report on Category-wise transaction where the amount exceeds USD 5000 per transaction...

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Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020

Notification No. FEMA. 399/RB-2020. - (23/10/2020) - i) These regulations may be called the Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020. ii) They shall come into force from the date of their publication in the Gazette of India....

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EDPMS Module for Caution/De-caution Listing of Exporters – Review

RBI/2020-2021/50 A.P. (DIR Series) Circular No.03 - (09/10/2020) - Under the revised procedure, an exporter would be caution-listed by the Reserve Bank based on the recommendations of the AD bank concerned, depending upon the exporters track record with the AD bank and investigative agencies....

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Recent Posts in "Fema Notifications"

No approval to open offices in India to foreign law firms/companies or foreign lawyers : RBI

Notification No. RBI/2020-21/69 A.P. (DIR Series) Circular No. 07 (23/11/2020)

AD Category – I banks are directed by RBI to not to grant any approval to foreign law firms/companies or foreign lawyers to open any branch office, project office, liaison office or other place of business in India under FEMA for the purpose of practicing legal profession in India....

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Banks to Publish summary of FEMA Compounding Orders on their website instead of Orders

RBI/2020-21/67 A.P. (DIR Series) Circular No. 06 (17/11/2020)

On a review and in partial modification of earlier instructions it has been decided that in respect of the Compounding Orders passed on or after March 01, 2020 a summary information, instead of the Compounding Orders, shall be published on the Bank’s website in the following format:...

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RBI discontinues 17 types of FEMA Returns/Reports

RBI decided to discontinue the 17 returns/reports as listed under under Foreign Exchange Management Act, 1999 which includes Report on Category-wise transaction where the amount exceeds USD 5000 per transaction...

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Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020

Notification No. FEMA. 399/RB-2020. (23/10/2020)

i) These regulations may be called the Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020. ii) They shall come into force from the date of their publication in the Gazette of India....

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EDPMS Module for Caution/De-caution Listing of Exporters – Review

RBI/2020-2021/50 A.P. (DIR Series) Circular No.03 (09/10/2020)

Under the revised procedure, an exporter would be caution-listed by the Reserve Bank based on the recommendations of the AD bank concerned, depending upon the exporters track record with the AD bank and investigative agencies....

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Foreign Exchange Management (Export and Import of Currency) (Amendment) Regulations, 2020

F. No. FEMA 6 (R)/ (2)/2020-RB (11/08/2020)

Reserve Bank’s power to permit export or import of currency: Notwithstanding anything contained in these regulations, the Reserve Bank may, on an application made to it and on being satisfied that it is necessary to do so, allow any person to take or send out of India to any country or bring into India from any country currency notes of...

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Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2020

Notification No. S.O. 2442 (E). (27/07/2020)

a) Air Transport Services shall include Domestic Scheduled Passenger Airlines, Non-Scheduled Air Transport Services, helicopter and seaplane services. (b) Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines, helicopter and seaplane services, as per the limits and entry routes mentioned abov...

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Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2020 

Notification No. FEMA. 395(1)/2020-RB (15/06/2020)

(i) These Regulations may be called the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2020. (ii) They shall come into force from the date of their publication in the Official Gazette....

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RBI extends time limits for Settlement of import payment

RBI/2019-20/242 A.P. (DIR Series) Circular No.33 (22/05/2020)

In view of the disruptions due to outbreak of COVID- 19 pandemic, it has been decided to extend the time period for completion of remittances against such normal imports (except in cases where amounts are withheld towards guarantee of performance etc.) from six months to twelve months from the date of shipment for such imports made on or ...

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VRR for FPIs investment in debt – relaxations

RBI/2019-20/239 A. P. (DIR Series) Circular No. 32 (22/05/2020)

Reserve Bank of India RBI/2019-20/239 A. P. (DIR Series) Circular No. 32 May 22, 2020 To All Authorised persons Madam / Sir, ‘Voluntary Retention Route’ (VRR) for Foreign Portfolio Investors (FPIs) investment in debt – relaxations Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the Foreign Exchange ...

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Hedging of Foreign Exchange Risk-Date of Implementation

RBI/2019-20/232 A.P.(DIR Series) Circular No. 31 (18/05/2020)

Based on the requests received from market participants and in the context of the difficulties arising from the outbreak of novel coronavirus disease (COVID-19), it has been decided that the Directions will now come into effect from September 1, 2020....

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Reporting Platform for OTC Derivatives- Transactions undertaken by IBUs

RBI/2019-20/233 FMRD.FMID.26/02.05.002/2019-20 (18/05/2020)

All foreign exchange non-deliverable derivative contracts (involving Rupee or otherwise) undertaken by banks in India through their IBUs or through their branches in India or through their foreign branches (in case of foreign banks operating in India, through any branch of the parent bank), shall be reported to CCIL’s reporting platform...

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Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2020

Notification No. S.O. 1374(E) (27/04/2020)

Acquisition after renunciation of rights.- A person resident outside India who has acquired a right  from a person resident in India who has renounced it may acquire equity instruments (other than share warrants) against the said rights as per pricing guidelines specified under rule 21 of these rules...

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Foreign Exchange Management (Non-debt Instruments) Amendment Rules, 2020

[F. No. 01/05/EM/2019-Part (1)] [S.O. 1278 (E)] (22/04/2020)

Provided that an entity of a country, which shares land border with India or the beneficial owner of an investment into India who is situated in or is a citizen of any such country, shall invest only with the Government approval:...

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No change in FPI investment Limit for G-secs & SDLs for FY 2020-21

RBI/2019-20/214 A.P. (DIR Series) Circular No. 30 (15/04/2020)

The limits for FPI investment in Government securities (G-secs) and State Development Loans (SDLs) shall remain unchanged at 6% and 2%, respectively, of outstanding stocks of securities for FY 2020-21....

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Risk Management and Inter-bank Dealings – Hedging of foreign exchange risk

RBI/2019-20/210 A.P.(DIR Series) Circular No. 29 (07/04/2020)

i. Domestic non-retail corporates having an INR liability may, at their discretion, convert it into a foreign currency liability through a currency swap. ii. For derivative contracts involving INR, Authorised Dealers shall allow a user to book derivative contracts up to USD 10 million equivalent of notional value (outstanding at any point...

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Rupee Drawing Arrangement – Remittance to PM-CARES Fund

RBI/2019-20/208 A. P. (DIR Series) Circular No. 28 (03/04/2020)

RBI permitted receipt of foreign inward remittances from non-residents through non-resident exchange houses in favour of the ‘Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM-CARES) Fund’,subject to the condition that AD Cat-I banks shall directly credit the remittances to the Fund and maintain the full det...

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All about FAR for Investment by Non-residents in Govt Securities 

RBI/2019-20/200 A.P. (DIR Series) Circular No. 25 (30/03/2020)

Reserve Bank of India RBI/2019-20/200 A.P. (DIR Series) Circular No. 25 Dated: March 30, 2020 To All Authorized Persons Madam / Sir ‘Fully Accessible Route’ for Investment by Non-residents in Government Securities Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the following regulations / directions, as a...

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FAR for Non-residents Investment in specified Govt Securities

RBI/2019-20/201 FMRD.FMSD.No.25/14.01.006/2019-20 (30/03/2020)

The Reserve Bank shall notify the Government securities that shall be eligible for investment under the FAR (hereinafter, ‘specified securities’). These securities will continue to be eligible for investment by residents. ‘Specified securities’, once so designated, shall remain eligible for investment under the FAR until maturity....

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Investment by Foreign Portfolio Investors (FPI): Investment limits

RBI/2019-20/199 A.P. (DIR Series) Circular No. 24 (30/03/2020)

The limit for FPI investment in corporate bonds is increased to 15% of outstanding stock for FY 2020-21. The revised limits for FPI investment in Central Government securities (G-secs) and State Development Loans (SDLs) for FY 2020-21 will be advised separately. Till such time, the current limits (as in Table - 2), shall continue to be a...

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Transaction in Non-deliverable derivative contracts

RBI/2019-20/193 A.P. (DIR Series) Circular No.23 (27/03/2020)

Non-deliverable derivative contract (NDDC) means a foreign exchange derivative contract involving the Rupee, entered into with a person not resident in India and which is settled without involving delivery of Rupee....

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Foreign Exchange Management (Manner of Receipt and Payment) (Second Amendment) Regulations, 2020

Notification No. FEMA 14(R)/(2)/2020-RB (04/03/2020)

i. These Regulations may be called the Foreign Exchange Management (Manner of Receipt and Payment) (Second Amendment) Regulations, 2020. ii. They shall come into force from the date of their publication in the official Gazette....

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Foreign Exchange Management (Foreign Exchange Derivative Contracts) (First Amendment) Regulations, 2020

Notification No. FEMA.398/RB-2020 (18/02/2020)

i. These Regulations may be called the Foreign Exchange Management (Foreign Exchange Derivative Contracts) (First Amendment) Regulations, 2020. ii. These regulations shall come into force from the date of their publication in the Official Gazette....

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VRR for Foreign Portfolio Investors investment in debt

Notification No. RBI/2019-20/151 A.P. (DIR Series) Circular No.19 (23/01/2020)

Following changes are made to the Directions governing investment through the Voluntary Retention Route (VRR). a) The investment cap is increased to 1,50,000 crores from Rs. 75,000 crores. b) FPIs that have been allotted investment limits under VRR may, at their discretion, transfer their investments made under the General Investment Limi...

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Investment by Foreign Portfolio Investors (FPI) in Debt

Notification No. RBI/2019-20/150 A.P. (DIR Series) Circular No.18 (23/01/2020)

In terms of paragraph 4(b) (i) of the Directions, short-term investments by an FPI shall not exceed 20% of the total investment of that FPI in either Central Government Securities (including Treasury Bills) or State Development Loans. This short-term investment limit is hereby increased from 20% to 30%....

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Merchanting Trade Transactions (MTT) – Revised Guidelines

Circular No. RBI/2019-20/152 A.P. (DIR Series) Circular No. 20 (23/01/2020)

Reserve Bank of India RBI/2019-20/152 A.P. (DIR Series) Circular No. 20 January 23, 2020 To All Category – I Authorised Dealer Banks Madam / Sir Merchanting Trade Transactions (MTT) – Revised Guidelines Attention of Authorised Dealer Category-I banks (AD banks) is invited to A.P. (DIR Series) Circular No.115 dated March 28, 2014 con...

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Setting up of IFSC Banking Units – Permissible Activities amended

RBI/2019-20/122 DOR.IBD.BC.26/23.13.004/2019-20 (23/12/2019)

IBUs are not allowed to open savings accounts. They can open foreign currency current accounts of units operating in IFSC and of non-resident institutional investors to facilitate their investment transactions. They can also open foreign currency current accounts (including escrow accounts) of their corporate borrowers subject to the prov...

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Foreign Exchange Management (Non-debt Instruments) (Amendment) Rules, 2019

Notification No. S.O. 4355(E) (05/12/2019)

(1) These rules may be called the Foreign Exchange Management (Non-debt Instruments) (Amendment) Rules, 2019. (2) These rules shall be deemed to have come into force on the 17th October, 2019, except items (i), (ii), (iii), (iv), (v) and (vii) of rule 6 which shall come into force on the date of their publication in the Official Gazette....

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Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2019

Notification No. FEMA 23(R)/(2)/2019-RB. (03/12/2019)

i. These Regulations may be called the Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2019. ii. They shall come into force from the date of their publication in the official Gazette....

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RBI relaxes provisions for operation/Opening of SNRR Account

RBI/2019-20/102 A.P. (DIR Series) Circular No. 09 (22/11/2019)

With a view to promote the usage of INR products by persons resident outside India, it has been decided, in consultation with the Government of India, to expand the scope of SNRR Account by permitting person resident outside India to open such account for:...

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Re-export of unsold rough diamonds from Special Notified Zone of Customs without Export Declaration Form (EDF) formality

RBI/2019-20/103 A.P. (DIR Series) Circular No. 10 (22/11/2019)

For the lot/ lots cleared at the center/s which are duly notified under Customs Act, 1962 / specified by the Central Board of Indirect Taxes & Customs, Department of Revenue, Ministry of Finance, Government of India for the above purpose, Bill of Entry shall be filed by the buyer. AD bank may permit such import payments after being satisf...

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Foreign Exchange Management (Non-debt Instruments) Rules, 2019

Notification No. S.O. 3732(E). (17/10/2019)

(1) These rules may be called the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. (2) Save as otherwise provided in these rules, they shall come into force from the date of their publication in the Official Gazette....

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Foreign Exchange Management (Debt Instruments) Regulations, 2019

Notification No. FEMA 396/2019-RB/G.S.R . 796(E) (17/10/2019)

(1) These Regulations may be called the Foreign Exchange Management (Debt Instruments) Regulations, 2019. They shall come into force from the date of their publication in the Official Gazette....

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Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019

Notification No. FEMA. 395/2019-RB / G.S.R . 795(E) (17/10/2019)

a) These regulations may be called the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019. b) They shall come into force from the date of their publication in the Official Gazette....

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Debt and non-debt instruments notified under FEMA 1999

Notification No. S.O. 3722(E) (16/10/2019)

Central Government notifies instruments which can be considered as debt and non-debt instruments under Foreign Exchange Management Act, 1999....

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Depository Receipts (Amendment) Scheme, 2019

Notification No. F. No. 9/1/2013-ECB(Pt-2) (07/10/2019)

This Scheme may be called the Depository Receipts (Amendment) Scheme, 2019.- 5. International Financial Services Centre in India set up under section 18 of the Special Economic Zones Act, 2005 (No. 28 OF 2005)...

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Commercial Papers not comes within the purview of deposits

RBI/2019-20/44 A.P. (DIR Series) Circular No. 06 (16/08/2019)

We advise that Sub-regulation (3) of Regulation 6 of the above Regulations, in terms of which a Company may accept deposits through issue of Commercial Paper (CP), has been reviewed vis-à-vis other Statutes/Regulations – notably Section 45 U(b) of RBI Act, 1934 describing CP as one of the Money Market Instruments and Section 2(c) of Co...

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ECB Policy – Rationalisation of End-use Provisions

RBI/2019-20/20 A.P. (DIR Series) Circular No. 04 (30/07/2019)

It has been decided, in consultation with the Government of India, to relax the end-use restrictions. Accordingly, eligible borrowers will now be permitted to raise ECBs for the following purposes from recognised lenders, except foreign branches/ overseas subsidiaries of Indian banks, subject to paragraph 2.2 of the direction ibid:...

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Foreign Exchange Management (Deposit) (Amendment) Regulations, 2019

Notification No. FEMA 5 (R) 2/2019-RB / G.S.R. 498 (E) (16/07/2019)

(i) These Regulations may be called the Foreign Exchange Management (Deposit) (Amendment) Regulations, 2019. (ii) They shall come into force with effect from the date of their publication in the Official Gazette....

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FLA return to be submitted Online: RBI

RBI/2018-19/226 A.P. (DIR Series) Circular No. 37 (28/06/2019)

With the objective to enhance the security-level in data submission and further improve the data quality, the present email-based reporting system for submission of the FLA return will be replaced by the web-based system online reporting portal....

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RBI permits Foreign Portfolio Investors to invest in municipal bonds

RBI/2018-19/176A.P. (DIR Series) Circular No. 33 (25/04/2019)

As a measure to broaden access of non–resident investors to debt instruments in India, Foreign Portfolio Investors (FPI) are now permitted to invest in municipal bonds.. FPI investment in municipal bonds shall be reckoned within the limits set for FPI investment in State Development Loans (SDLs)....

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Opening of Foreign Currency a/c by Re-insurance & Composite Insurance brokers

RBI/2018-19/167A.P. (DIR Series) Circular No.29 (11/04/2019)

Re-insurance and composite insurance brokers registered with IRDA may open and maintain non-interest bearing foreign currency accounts with an AD bank in India for the purpose of undertaking transactions in the ordinary course of their business....

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Reg. Opening of NRO Accounts by Long Term Visa (LTV) holders

RBI/2018-19/155A.P.(DIR Series) Circular No.28 (28/03/2019)

Foreign Exchange Management (Deposit) Regulations, 2016 - Opening of NRO Accounts by Long Term Visa (LTV) holders, changes related to Special Non-Resident Rupee (SNRR) Account and Escrow Account...

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Establishment of BO/ LO / PO or any other place of business in India by foreign entities

RBI/2018-19/154A.P. (DIR Series) Circular No. 27 (28/03/2019)

For opening of a Branch Office (BO) / Liaison Office (LO) / Project Office (PO) or any other place of business in India, where the principal business of the applicant falls in the Defence, Telecom, Private Security and Information and Broadcasting sector, have since been reviewed in consultation with the Government of India and the amendm...

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Compilation of R-Returns: Reporting under FETERS

RBI/2018-2019/145A.P. (DIR Series) Circular No. 25 (20/03/2019)

In order to facilitate compilation of estimates of bilateral trade in services, it has been decided to incorporate an additional field for capturing the country code of ultimate exporter/importer in the BoP file-format under FETERS. In case of export of services, bank may use the transaction information available with them to report count...

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Export and Import of Indian Currency

RBI/2018-19/144A.P. (DIR Series) Circular No. 24 (20/03/2019)

Attention of Authorised Persons is invited to Regulation 8 of Foreign Exchange Management (Export and import of currency) Regulations, 2015, in terms of which a person may take or send out of India to Nepal or Bhutan and bring into India from Nepal or Bhutan, currency notes of Government of India and Reserve Bank of India for any amount i...

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RBI- Trade Credit Policy – Revised framework

RBI/2018-2019/140A.P. (DIR Series) Circular No. 23 (13/03/2019)

Trade Credits can be raised under the automatic route up to the amount specified in the Annexto this circular and in compliance with the other applicable norms. The designated AD Category I bank while considering the Trade Credit proposal is expected to ensure compliance with applicable Trade Credit guidelines by their constituents. Any c...

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Foreign Exchange Management (Permissible Capital Account Transaction) (First Amendment) Regulations, 2019

Notification No. FEMA 1/2019-RB (07/03/2019)

(i) These Regulations may be called the Foreign Exchange Management (Permissible Capital Account Transactions) (First Amendment) Regulations, 2019.(ii) They shall come into force from the date of their publication in the Official Gazette....

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Operational guidelines on Hedging of exchange rate risk by FPIs under VRR

RBI/2018-19/136A .P. (DIR Series) Circular No. 22 (01/03/2019)

A reference is also invited to A.P. (DIR Series) Circular No. 21 dated March 01, 2019 on Voluntary Retention Route (VRR) for Foreign Portfolio Investors (FPIs) investment in debt. The operational guidelines, terms and conditions for hedging the exposure to exchange rate risk on account of investments made under this route are provided i...

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Features of ‘Voluntary Retention Route’ for FPIs investment in debt

RBI/2018-19/135 A.P. (DIR Series) Circular No. 21 (01/03/2019)

A reference is also invited to the discussion paper on ‘Voluntary Retention Route’ (VRR) for investments by Foreign Portfolio Investors (FPIs) released by the Reserve Bank on October 05, 2018. The VRR scheme has been finalized after taking into consideration the comments and views received, and attached as Annex....

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FEMA (Foreign Currency Accounts by a person resident in India) (Amendment) Regulations 2019

Notification No. G.S.R. 160(E) (27/02/2019)

(i) These regulations may be called the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Amendment) Regulations 2019.(ii) They shall come into force from the date of their publication in the Official Gazette....

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RBI amends deceleration to be given in Form ‘FNC’

RBI/2018-19/132 A.P. (DIR Series) Circular No. 20 (27/02/2019)

Accordingly, the Form FNC has also been suitably modified and the following phrase added under the heading ‘Declaration’ in Part II clause (ii), at the end of the existing sentence....

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Restriction on Currency Note sending or Taking from Nepal or Bhutan

Notification No. G.S.R. 151(E) (26/02/2019)

(1) take or send out of India to Nepal or Bhutan, currency notes of Government of India and Reserve Bank of India notes (other than notes of denominations of above Rs.100 in either case), provided that an individual travelling from India to Nepal or Bhutan can carry Reserve Bank of India notes of Mahatma Gandhi (new) Series of denominatio...

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Investment by Foreign Portfolio Investors (FPI) in Debt

RBI/2018-19/123 A.P. (DIR Series) Circular No. 19 (15/02/2019)

As announced in paragraph 10 of the Statement on Developmental and Regulatory Policies of the Sixth Bi-monthly Monetary Policy Statement for 2018-19 dated February 07, 2019, in order to encourage a wider spectrum of investors to access the Indian corporate debt market, it has been decided to withdraw this provision with immediate effect....

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ECB for Resolution Applicants under Corporate Insolvency Resolution Process

RBI/2018-19/121 A.P. (DIR Series) Circular No. 18 (07/02/2019)

RBI to relax the end-use restrictions for resolution applicants under the Corporate Insolvency Resolution Process (CIRP) and allow them to raise ECBs from the recognised lenders, except the branches/ overseas subsidiaries of Indian banks, for repayment of Rupee term loans of the target company under the approval route....

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Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Amendment) Regulations, 2019

Notification No. FEMA. 20(R) (6)/2019-RB (31/01/2019)

These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fifth Amendment) Regulations, 2019....

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Fema: Reg. opening of project office relating to defence sector in India

Notification No. FEMA 22 (R)/(2)/2019-RB (21/01/2019)

In the case of proposal for opening a project office relating to defence sector, no separate reference or approval of Government of India shall be required if the said non-resident applicant has been awarded a contract by/entered into an agreement with the Ministry of Defence or Service Headquarters or Defence Public Sector Undertakings....

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ECB Policy – Salient features of new ECB framework

RBI/2018-19/109  A.P. (DIR Series) Circular No. 17, Press Release: 2018-2019/1673 (16/01/2019)

Eligible Borrowers: This has been expanded to include all entities eligible to receive FDI. Additionally, Port Trusts, Units in SEZ, SIDBI, EXIM Bank, registered entities engaged in micro-finance activities, viz., registered not for profit companies, registered societies/trusts/cooperatives and non-government organisations can also borrow...

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Foreign Exchange Management (Borrowing and Lending) Regulations, 2018

Notification No. FEMA 3(R)/2018-RB / G.S.R. 1213(E) (17/12/2018)

1) These Regulations may be called the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018. ii) They shall come into force from the date of their publication in the Official Gazette....

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Mandatory hedge coverage reduced to 70% for Track I ECBs

RBI/2018-19/79 A.P. (DIR Series) Circular No.15 (26/11/2018)

It has been decided, in consultation with the Government of India, to reduce the mandatory hedge coverage from 100 per cent to 70 per cent for ECBs raised under Track I of the ECB framework by eligible borrowers...

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Electronic Trading Platforms (Reserve Bank) Directions, 2018

RBI/2018-2019/55 FMRD.FMID.07/14.03.027/2018-19 (05/10/2018)

RBI hereby issues Electronic Trading Platforms (Reserve Bank) Directions, 2018 to the entities operating Electronic Trading Platforms (ETPs) to transact trade in eligible instruments....

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Maintenance of Accounts in India by a Person Resident outside India

FEMA regulates, prohibits and restricts acceptance of deposits by Person Resident in India from a Person Resident outside India (PROI) and prescribes maintenance of accounts in India by PROI. This article provides an insight to the same....

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Posted Under: Fema / RBI |

RBI liberalises ECB policy on Rupee denominated bonds

RBI/2018-19/48 A.P. (DIR Series) Circular No.9 (19/09/2018)

It has been decided, in consultation with the Government of India, to liberalise some aspects of the ECB policy including policy on Rupee denominated bonds as indicated below:...

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Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) (Amendment) Regulations, 2018

Notification No. FEMA 22(R) (1)/2018-RB (31/08/2018)

(i) These regulations may be called the Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) (Amendment) Regulations, 2018. (ii) These regulations shall come into force from the date of their publication in the Official Gazette....

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Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2018

Notification No. No. FEMA.20(R) (3)/2018-RB (30/08/2018)

(i) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2018. (ii) They shall come into force with effect from the 1st day of September, 2018....

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PAN Mandatory for all remittances under Liberalised Remittance Scheme

RBI/2017-18/204 A.P. (DIR Series) Circular No. 32 (19/06/2018)

It has been decided that furnishing of Permanent Account Number (PAN), which hitherto was not to be insisted upon while putting through permissible current account transactions of up to USD 25,000, shall now be mandatory for making all remittances under Liberalised Remittance Scheme (LRS)....

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Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2018

Notificatio No. FEMA. 20(R)(2)/2018-RB (01/06/2018)

Reserve Bank of India hereby notifies that proviso (ii) to sub-regulation (1) of regulation 10 and proviso (ii) to sub-regulation (2) of regulation 10 of the Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations, 2017, shall come into force with effect from June 02, 2018....

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PML (Maintenance of Records) Amendment Rules, 2018

Notification No. G.S.R. 456(E) (16/05/2018)

1. (1) These rules may be called the Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2018. (2) They shall come into force on the date of their publication in the Official Gazette....

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Investment by Foreign Portfolio Investors (FPI) in Debt – Review

RBI/2017-18/170 A.P. (DIR Series) Circular No. 26 (01/05/2018)

While the FPIs are only permitted to invest in corporate bonds with minimum residual maturity of above one year, in order to bring consistency across debt categories, it is stipulated that investments by an FPI in corporate bonds with residual maturity below one year shall not exceed, at any point in time, 20% of the total investment of t...

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Changes affecting operational aspects of FPI investments in debt

RBI/2017-18/168 A.P. (DIR Series) Circular No. 24 (27/04/2018)

In terms of AP (DIR Series) Circular No. 22 dated April 6, 2018, the revised framework for Foreign Portfolio Investors (FPI) in debt was announced. It was further stated that a separate notification would be issued announcing other changes affecting operational aspects of FPI investments in debt, in consultation with SEBI....

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Rationalisation of all-in-cost for ECB under all tracks and RDBs

RBI/2017-18/169 A.P. (DIR Series) Circular No.25 (27/04/2018)

Rationalisation of all-in-cost for ECB under all tracks and Rupee denominated bonds (RDBs) : With a view to harmonising the extant provisions of Foreign Currency and Rupee ECBs and RDBs, it has been decided to stipulate a uniform all-in-cost ceiling of 450 basis points over the benchmark rate....

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LRS for Resident Individuals – daily reporting of transactions

RBI/2017-18/161 A.P. (DIR Series) Circular No. 23 (12/04/2018)

In order to improve monitoring and also to ensure compliance with the LRS limits, it has been decided to put in place a daily reporting system by AD banks of transactions undertaken by individuals under LRS, which will be accessible to all the other ADs....

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Revision in Limit for FPI Investment in Govt Securities WEF 01.04.2018

RBI/2017-18/150 A.P. (DIR Series) Circular No. 22 (06/04/2018)

(a) The limit for FPI investment in Central Government securities (G-secs) would be increased by 0.5% each year to 5.5% of outstanding stock of securities in 2018- 19 and 6% of outstanding stock of securities in 2019-20....

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Monitoring of Foreign Investment limits in listed Indian companies

IMD/FPIC/CIR/P/2018/61 (05/04/2018)

As per FEMA, the onus of compliance with the various foreign investment limits rests on the Indian company. In order to facilitate the listed Indian companies to ensure compliance with the various foreign investment limits, SEBI in consultation with RBI has decided to put in place a new system for monitoring the foreign investment limits....

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Hedging of Commodity Price Risk and Freight Risk in Overseas Markets (Reserve Bank) Directions

RBI/2017-18/138 A.P. (DIR Series) Circular No. 19 (12/03/2018)

RBI had earlier constituted a Working Group to review the guidelines for Hedging of Commodity Price Risk by Residents in overseas markets (Chairman: Shri Chandan Sinha). Based on the report of the working group and comments received on the report, draft directions for hedging of commodity price risk and freight risk were released for comm...

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Risk Management and Inter-bank Dealings: Revised guidelines

RBI/2017-18/134 A. P. (DIR Series) Circular No. 18 (26/02/2018)

Risk Management and Inter-bank Dealings: Revised guidelines relating to participation of a person resident in India and Foreign Portfolio Investor (FPI) in the Exchange Traded Currency Derivatives (ETCD) Market...

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RBI permits overseas branches/subsidiaries of Indian banks to refinance ECBs

RBI/2017-18/116 A.P. (DIR Series) Circular No.15 (04/01/2017)

RBI permits the overseas branches/subsidiaries of Indian banks to refinance ECBs of highly rated (AAA) corporates as well as Navratna and Maharatna PSUs, provided the outstanding maturity of the original borrowing is not reduced and all-in-cost of fresh ECB is lower than the existing ECB. Partial refinance of existing ECBs will also be pe...

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Limits for FPI investment in Govt Securities revised from January 01, 2018

RBI/2017-18/108 A.P. (DIR Series) Circular No. 14 (12/12/2017)

The limits for investment by FPIs for the quarter January – March 2018 is increased by INR 64 billion in Central Government Securities (Central G-Secs) and INR 58 billion in State Development Loans (SDLs). ...

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OTC Government Securities Transaction by FPIs – Settlement Period

RBI/2017-18/97 FMRD.DIRD.05/14.03.007/2017-18 (16/11/2017)

As announced in paragraph 13 of the Statement on Developmental and Regulatory Policies, of the fourth Bi-monthly Monetary Policy Statement for 2017- 18 dated October 04, 2017, it has now been decided to permit FPIs to settle OTC secondary market transactions in Government Securities either on T+1 or on T+2 basis. It may be ensured that al...

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Simplified Hedging Facility Guidelines for Resident and non-resident entities

RBI/2017-18/88 A.P. (DIR Series) Circular No. 11 (09/11/2017)

ii. If hedging requirement of the user exceeds the limit in course of time, the designated bank may re-assess and, at its discretion, extend the limit up to 150% of the stipulated cap. iii. Hedge contracts in OTC market can be booked with any AD Cat-I bank, provided the underlying cash flow takes place with the same bank....

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Latest Law on Transfer or Issue of Security by a Person Resident Outside India

Notification No. FEMA 20(R)/2017-RB (07/11/2017)

These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017....

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Permission to resident / non-resident entities to hedge transactions with simple Procedures

Notification No. FEMA. 388/2017-RB (24/10/2017)

Notwithstanding anything contained in paras 4, 5, 5A and 5B, resident entities with foreign currency exposures and non- resident entities with rupee exposures, other than individuals, may hedge underlying exchange rate risk arising out of transactions permitted under Foreign Exchange Management Act, 1999...

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PML (Maintenance of Records) Sixth Amendment Rules, 2017

Notification No. G.S.R. 1318(E) (23/10/2017)

Provided also that in case the officially valid document presented by a foreign national does not contain the details of address, in such case the documents issued by the Government departments of foreign jurisdictions and letter issued by the Foreign Embassy or Mission in India shall be accepted as proof of address....

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Facilities for Hedging Trade Exposures invoiced in Indian Rupees

RBI/2017-18/75 A.P. (DIR Series) Circular No. 08 (12/10/2017)

To hedge the currency risk arising out of genuine trade transactions involving exports from and imports to India, invoiced in Indian Rupees, with AD Category I banks in India....

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Investment by FPI in Government Securities Medium Term Framework

RBI/2017-18/68 A.P.(DIR Series) Circular No. 7 (28/09/2017)

The limits for investment by FPIs for the quarter October-December 2017 is increased by INR 80 billion in Central Government Securities and INR 62 billion in State Development Loans. The revised limits are allocated as per the modified framework prescribed in the RBI/2017-18/12 A.P.(Dir Series) Circular No.1 dated July 3, 2017, and given ...

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Harmonisation of norms for Masala Bonds issuance with ECB guidelines

RBI/2017-18/ 64 A.P. (DIR Series) Circular No. 05 (22/09/2017)

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Schedule 5 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA.20/2000-RB dated May 3, 2000, as amended from time to time....

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Relaxation in reporting requirement in respect of RDB transactions

RBI/2017-18/65- A.P. (DIR Series) Circular No. 06 (22/09/2017)

Consequently, reporting requirement in terms of paragraph 8 (additional email reporting of RDB transactions for onward reporting to depositories) of A.P. (DIR Series) Circular No. 60 dated April 13, 2016 has been dispensed with. However, it should be noted that the reporting of RDBs will continue as per the extant ECB norms....

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PML (Maintenance of Records) Third Amendment Rules, 2017

Notification No. 3/2017 (21/08/2017)

1. (1) These rules may be called the Prevention of Money-laundering (Maintenance of Records) Third Amendment Rules, 2017. (2) They shall come into force on the date of their publication in the Official Gazette....

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Foreign Trade (Exemption from application of Rules in certain cases) Amendment Order, 2017

Order No. S.O. 2322(E) (25/07/2017)

S.O. 2322(E).—In exercise of the powers conferred by section 3, read with section 4, of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), as amended by the Foreign Trade (Development and Regulation) Amended Act, 2010...

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RBI tightens norms for issuance of Masala Bonds

RBI/2016-17/316 A. P. (DIR Series) Circular No. 47 (07/06/2017)

RBI has today tightened the norms for issuance of masala bonds by Indian corporates – raising of such INR denominated debt would now be subject to RBI approval, will have to adhere to all-in-cost ceilings (earlier permitted at arm’s length) and cannot be issued to related parties. ...

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Aadhaar mandatory for opening bank account- Govt notifies rules

Notification No. G.S.R. 538(E) (01/06/2017)

(1) These rules may be called the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017. (2) They shall come into force on the date of their publication in the Official Gazette....

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Draft guidelines of Simplified Hedging Facility for Residents & Non-Residents

Press Release : 2016-2017/2759 (12/04/2017)

RBI today released draft guidelines of Simplified Hedging Facility for Residents and Non-Residents which permits dynamic hedging of currency risk and simplifies the procedure involved in booking hedge contracts....

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Increase in limits for investment by FPIs in CG Securities and SDLs

RBI/2016-17/265 A.P.(DIR Series) Circular No. 43 (31/03/2017)

The limits for investment by FPIs in Central Government Securities and State Development Loans (SDLs) for the quarter April-June 2017 are proposed to be increased by Rs. 110 billion and Rs. 60 billion respectively....

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Purchase of foreign exchange from foreign citizens and others

RBI/2016-17/263 A.P. (DIR Series) Circular No. 42 (30/03/2017)

Attention of Authorized Persons is invited to the A.P. (DIR Series) Circulars No. 20, 22 and 24 dated November 25, 2016, December 16, 2016 and January 3, 2017 respectively, permitting foreign citizens (i.e. foreign passport holders) to exchange foreign exchange for Indian currency notes up to a limit of Rs. 5000/- per week till January 31...

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Operational flexibility for Indian subsidiaries of Non-resident Companies

RBI/2016-17/254 A.P. (DIR Series) Circular No. 41 (21/03/2017)

To provide operational flexibility for booking derivative contracts to hedge the currency risk arising out of current account transactions of Indian subsidiaries of Multi-National Companies (MNCs)....

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Non Resident can enter foreign exchange derivative contract

Notification No. FEMA. 384/RB-2017 / G.S.R. 260(E) (17/03/2017)

A non-resident may enter into a foreign exchange derivative contract with an Authorised Dealer bank in India to hedge an exposure to exchange risk of and on behalf of its Indian subsidiary in respect of the said subsidiary's transactions subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time....

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100% FDI in e-commerce sites via automatic route allowed

Notification No. No. FEMA.387/2017-RB (09/03/2017)

These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fourth Amendment) Regulations, 2017. They shall come into force from the date of their publication in the Official Gazette....

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FEM(Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2017

Notification No. FEMA. 385/ 2017-RB (03/03/2017)

G.S.R. 188 (E).—In exercise of the powers conferred by clause (b) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) ...

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Foreign Exchange (Compounding Proceedings) Amendment Rules, 2017

Notification No. G.S.R. 151(E) (20/02/2017)

Central Government hereby makes the following rules further to amend the Foreign Exchange (Compounding Proceedings) Rules, 2000, namely: Provided that with respect to any proceeding initiated under rule 4, if the Enforcement Directorate is of the view that the said proceeding relates to a serious contravention suspected of money launderin...

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