- Foreign Exchange Management (Deposit) Regulations, 2016
The Reserve Bank has made the Foreign Exchange Management (Deposit) Regulations, 2016 relating to deposits between a person resident in India and a person resident outside India. By issuing the said regulations, RBI has repealed and superseded regulations under the Foreign Exchange Management (Deposit) Regulations, 2000. It covers the following heads:
- Restrictions on deposits between a person resident in India and a person resident outside India
- Acceptance of deposits by an authorised dealer/ authorised bank from persons resident outside India
- Acceptance of deposits by persons other than authorised dealer/ authorised bank
- Other deposits made or held by authorised dealer
- Non-Resident (External) Rupee Account Scheme - NRE Account
- FOREIGN CURRENCY (NON-RESIDENT) ACCOUNT (BANKS) SCHEME - FCNR (B) Account
- NON-RESIDENT ORDINARY RUPEE ACCOUNT SCHEME - NRO Account
- Special Non-Resident Rupee Account - SNRR account
- Terms and conditions for opening of Escrow Account
- Acceptance of deposits by a company incorporated in India
- Acceptance of deposits by Indian proprietorship concern/firm or company
- Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Thirteenth Amendment) Regulations, 2016
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) Regulations, 2000 (Notification No. FEMA. 20/2000-RB dated 3rd May 2000) namely:-
- 100% foreign investment allowed under the automatic route in 'Other Financial Services' - i.e. services which are regulated by any financial sector regulators viz. RBI, SEBI, IRDA, PRDA, NHB or any other financial sector regulator as may be notified by the GOI.
- Such foreign investment shall be subject to conditionality's, including minimum capitalisation norms, as specified by the concerned Regulator/ Government Agency
- Financial services activities which are not regulated or partly regulated by any financial sector regulator or where there is lack of clarity regarding regulatory oversight, foreign investment will be allowed up to 100% under the Government approval route.
- Foreign investment in an activity which is specifically regulated by an Act, will be restricted to foreign investment levels/limits, if any, specified under that Act.
- Downstream investment by any entity engaged in 'Other Financial Services" will be subject to extant sectoral regulations and provisions of Principal Regulations.
October 21, 2016