Date: |
11-02-2016
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Notification No: |
RBI/2015-16/318 A.P. (DIR Series) Circular No. 51
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Issuing Authority: |
RBI
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Type: |
A.P.D.(Series) Circulars
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File No: |
RBI/2015-16/318 |
Subject: |
Regulatory relaxations for start-ups- Clarifications relating to acceptance of payments
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RBI/2015-16/318
A.P. (DIR Series) Circular No. 51
February 11, 2016
To,
All Authorised Dealer Category – I Banks
Madam/Sir,
Regulatory relaxations for start-ups- Clarifications relating to
acceptance of payments
Attention of Authorised Dealer Category - I (AD Category-I) banks is invited
to the Foreign Exchange Management (Foreign currency accounts by a person
resident in India) Regulations, 2000, notified by the Reserve Bank vide
Notification No. FEMA. 10 (R) /2015-RB dated January 21, 2016, as amended from
time to time.
- Pursuant to paragraph 14 of the Sixth Bi-Monthly Monetary Policy
Statement for 2015-16, Reserve Bank of India vide Press Release dated
February 2, 2016, had announced that in case of start-ups, to facilitate
ease of doing business, certain permissible transactions under the existing
regime shall be clarified. One of the issues relate to the start-ups
accepting payment on behalf of overseas subsidiaries.
- In this connection, it is clarified as under:
A start-up in India with an overseas subsidiary is permitted to open foreign
currency account abroad to pool the foreign exchange earnings out of the
exports/sales made by the concerned start-up;
The overseas subsidiary of the start-up is also permitted to pool its
receivables arising from the transactions with the residents in India as
well as the transactions with the non-residents abroad into the said foreign
currency account opened abroad in the name of the start-up;
The balances in the said foreign currency account as due to the Indian
start-up should be repatriated to India within a period as applicable to
realisation of export proceeds (currently nine months);
A start-up is also permitted to avail of the facility for realising the
receivables of its overseas subsidiary or making the above repatriation
through Online Payment Gateway Service Providers (OPGSPs) for value not
exceeding USD 10,000 (US Dollar ten thousand) or up to such limit as may be
permitted by the Reserve Bank of India from time to time under this
facility; and
To facilitate the above arrangement, an appropriate contractual arrangement
between the start-up, its overseas subsidiary and the customers concerned
should be in place.
- Authorised Dealer banks may bring the contents of this circular to the
notice of their constituents and customers concerned and advise them to
refer to the above notifications for further details.
- 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,
(B. P. Kanungo)
Principal Chief General Manager
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