Reserve Bank Of India
A.P. (DIR Series) Circular No. 104
May 17, 2013
To
All Category-I Authorised Dealer Banks
Madam / Sir,
Foreign Direct Investment (FDI) in India - Issue of equity shares under the FDI
scheme allowed under the Government route against
pre-operative/pre-incorporation expenses
Attention of Authorised Dealers Category – I banks is invited to Para 3 (II) of
A.P. (DIR Series) Circular No. 74 dated June 30, 2011 read with
A.P. (DIR
Series) Circular No. 55 dated December 9, 2011, allowing thereby issue of equity
shares/ preference shares under the Government route by conversion of import of
capital goods, etc., subject to terms and conditions stated therein.
- On review of the policy, it has now been decided to amend condition at (c) in
the aforesaid para. The amended condition is given in the Annex.
- All the other conditions contained in the A.P. (DIR Series) Circulars No. 74
dated June 20, 2011 and No. 55 dated December 9, 2011, shall remain unchanged.
- AD Category - I banks may bring the contents of the circular to the notice of
their customers/constituents concerned.
- Necessary amendments to Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident outside India) Regulations, 2000 (Notification No.
FEMA 20/2000-RB dated May 3, 2000) have been notified vide Notification No.
FEMA.229/2012-RB dated April 23, 2012.
- The directions contained in this circular have been issued under Sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager-in-Charge
RBI/2012-13/502
Annex
[A. P. (DIR Series) Circular No. 104
dated May 17 , 2013]
| c.f. A.P.(DIR Series) Circular No. 74 dated June 30, 2011
|
Earlier Condition |
Revised condition |
| Para 3(II)(c) |
Payments should be made directly by the foreign investor to the company.
Payments made through third parties citing the absence of a bank account or
similar such reasons will not be eligible for issuance of shares towards FDI;
and |
Payments should be made by the foreign investor to the company directly or
through the bank account opened by the foreign investor as provided under FEMA
Regulations; and |