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Reserve bank of India (RBI)

  1. Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Third Amendment) Regulations, 2016

    Vide notification no. FEMA.363/2016-RB dated April 28, 2016, RBI has made the following amendments in the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (Notification No.FEMA 20/2000-RB dated 3rd May 2000) namely:

    • Following definitions have been added (i) Category I Alternative Investment Fund (Cat-I AIF) and (ii) start-up
    • Schedule 6 with respect to investment by a registered foreign venture capital investor has been amended
  2. Overseas Direct Investment (ODI) – Rationalization and reporting of ODI Forms
    1. RBI has vide notification no. RBI//2015-16/374 dated April 13, 2016 rationalized and amended the Form ODI. Thus the Form ODI will have five sections instead of six.
    2. The rationalised and revised Form ODI (Annex I) will now comprise the following parts:
      • Part I – Application for allotment of Unique Identification Number (UIN) and reporting of Remittances / Transactions:
        • Section A – Details of the IP / RI.
        • Section B – Capital Structure and other details of JV/ WOS/ SDS.
        • Section C - Details of Transaction/ Remittance/ Financial Commitment of IP/ RI.
        • Section D – Declaration by the IP/ RI.
        • Section E – Certificate by the statutory auditors of the IP/ self-certification by RI.
      • Part II - Annual Performance Report (APR)
      • Part III – Report on Disinvestment by way of:
        • Closure / Voluntary Liquidation / Winding up/ Merger/ Amalgamation of overseas JV / WOS;
        • Sale/ Transfer of the shares of the overseas JV/ WOS to another eligible resident or non-resident;
        • Closure / Voluntary Liquidation / Winding up/ Merger/ Amalgamation of IP; and
        • Buy back of shares by the overseas JV/ WOS of the IP / RI.
    3. New reporting format has also been introduced for Venture Capital Fund (VCF) / Alternate Investment Fund (AIF), Portfolio Investment and overseas investment by Mutual Funds
    4. Any post investment changes subsequent to the allotment of the UIN are required to be reported as indicated in the operational instructions on submission of Form ODI Part I
    5. In case of RI undertaking ODI, certification of Form ODI Part I by statutory auditor or chartered accountant need not be insisted upon. Self-certification by the RI concerned may be accepted
    6. Online OID application has been revamped to further reduce the traditional paper based filing system
  3. Overseas Direct Investment - Submission of Annual Performance Report

    In order to provide AD banks greater capability to track submission of APRs and also improve compliance level in the matter of submission of APRs by the IPs / RIs, RBI has now advised as under:

    1. The online OID application has been suitably modified to enable the nodal office of the AD bank to view the outstanding position of all the APRs pertaining to an applicant including for those JV / WOS for which it is not the designated AD bank.
    2. Certification of APRs by the Statutory Auditor or Chartered Accountant need not be insisted upon in the case of Resident Individuals. Self-certification may be accepted;
    3. In case multiple IPs / RIs have invested in the same overseas JV / WOS, the obligation to submit APR shall lie with the IP / RI having maximum stake in the JV / WOS. Alternatively, the IPs / RIs holding stake in the overseas JV / WOS may mutually agree to assign the responsibility for APR submission to a designated entity which may acknowledge its obligation to submit the APR in terms of Regulation 15 (iii) of Notification, ibid, by furnishing an appropriate undertaking to the AD bank;
    4. An IP / RI, which has set up / acquired a JV / WOS overseas in terms of the Regulations of the Notification, ibid, shall submit, to the AD bank every year, an APR in Form ODI Part II in respect of each JV / WOS outside India and other reports or documents by 31st of December each year or as may be specified by the Reserve Bank from time to time. The APR, so required to be submitted, shall be based on the latest audited annual accounts of the JV / WOS unless specifically exempted by the Reserve Bank.
  4. Acceptance of deposits by Indian companies from a person resident outside India for nomination as Director

    Vide notification no. RBI/2015-16/371 A.P. (DIR Series) Circular No.59, RBI has clarified that keeping deposits with an Indian company by persons resident outside India, in accordance with section 160 of the Companies Act, 2013, is a current account (payment) transaction and, as such, does not require any approval from Reserve Bank. All refunds of such deposits, arising in the event of selection of the person as director or getting more than twenty-five percent votes, shall be treated similarly.

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