RBI/2010-11/199
A.P. (DIR Series) Circular No. 13
September 14, 2010
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Reporting under Foreign Direct Investment (FDI) Scheme
Attention of Authorised Dealer Category-I (AD Category - I) banks is invited to
para 9 of Schedule 1 to the Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident Outside India) Regulations, 2000 notified vide
Notification No. FEMA 20/2000-RB dated May 3, 2000 (the Notification), as
amended from time to time, and A.P. (DIR Series) Circular No. 44 dated May 30,
2008.
- In terms of para 9 of Schedule 1 to the Notification, Indian companies are
required to report, the details of the amount of consideration received for
issue of FDI instruments, viz. equity shares, fully and mandatorily convertible
preference shares and debentures under the FDI scheme, in the Advance Reporting
Format along with the KYC report on the non-resident investor, to the Regional
Office of the Reserve Bank in whose jurisdiction the Registered Office of the
company operates, within 30 days of receipt of the amount of consideration.
Further, the Indian company is required to issue the FDI instruments to the
non-resident investor within 180 days of the receipt of the inward remittance
and report the same in Form FC-GPR, to the Regional Office concerned of the
Reserve Bank, within 30 days from the date of issue of shares.
- FDI is an important component of the Balance of Payments (BoP) statistics,
which is being compiled and published on a quarterly basis. Any delay in
submission of the FDI data results in under-reporting of FDI in the BoP
statistics. Further, delay in reporting of the FDI transactions (receipt of
advance consideration and issue of FDI compliant instruments) and issuance of
shares/ refund of advance consideration beyond 180 days of receipt of the same
without the Reserve Bank’s approval are considered as violations under the
provisions of the Foreign Exchange Management Act, 1999 (FEMA). Therefore, AD
Category - I banks are advised to sensitise and impress upon their clients the
importance of strict adherence to the FDI reporting requirements including the
KYC report. In this regard, AD Category-I banks may make suitable internal
arrangements to monitor / track the inward remittances reported through Advance
Reporting Format and the subsequent issue of shares or refund of share
application money by the companies.
- AD Category - I banks may bring the contents of this circular to the notice
of their constituents and customers concerned.
- 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 is
without prejudice to permissions / approvals, if any, required under any other
law.
Yours faithfully,
(Salim Gangadharan)
Chief General Manager-in- Charge