RBI/2011-12/259
A.P. (DIR Series) Circular No. 45
November 16, 2011
To,
All Category – I Authorised Dealer banks
Madam / Sir,
Foreign Direct Investment – Reporting of issue / transfer of
‘participating interest/right’ in oil fields to a non resident as an
Foreign Direct Investment transaction
Attention of Authorized Dealers Category –I (AD Category-I) banks is invited to
Regulations 9 and 10 and para 9 of Schedule I to the Foreign Exchange Management
(Transfer of 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. Attention is also invited to
A.P. (DIR Series)
Circular No.63 dated April 22, 2009. In terms of the said regulations, transfer
of equity shares / fully and mandatorily convertible debentures/ fully and
mandatorily convertible preference shares (hereinafter referred to as ‘shares’)
of an Indian company, from a person resident outside India (non-resident) to a
person resident in India (resident) or vice versa, has to be reported to an
Authorized Dealer bank within 60 days of transactions. Further, the receipt of
consideration for issue of shares as well as the issue of shares of an Indian
company, to a non-resident has to be reported to the Reserve Bank of India
through an Authorized Dealer bank within 30 days of the transaction (receipt of
consideration for issue of shares to a non resident or issue of shares to the
non-resident).
- It has now been decided, in consultation with the Government, to treat the
issue / transfer of ‘participating interest/ rights’ in oil fields to a non-
resident as Foreign Direct Investment (FDI) transaction under the extant FDI
policy and the FEMA regulations. Accordingly, these transactions have to be
reported as FDI transactions in terms of the provisions of Regulations 9 and 10
of the Foreign Exchange Management (Transfer of 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 read with A.P. (DIR
Series) Circular No.63 dated April 22, 2009 as well as paragraph 9 of Schedule I
to the Foreign Exchange Management (Transfer of 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. Accordingly,
transfer of ‘participating interest/ rights’ will be reported as ‘other’
category under Para 7 of revised Form FC-TRS as given in the
Annex and issuance
of ‘participating interest/ rights’ will be reported as ‘other’ category of
instruments under Para 4 of Form FC-GPR.
- Necessary amendments to the Foreign Exchange Management (Transfer of Issue of
Security by a Person Resident outside India) Regulations, 2000 notified vide
Notification No. FEMA 20/2000-RB dated May 3, 2000 are being notified
separately.
- AD Category – I banks may bring the contents of the circular to the notice of
their constituents.
- 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,
(Meena Hemchandra)
Chief General Manager-in-Charge