RBI

Foreign Exchange Management (Mode of Payment & Reporting of Non-Debt Instruments) (Amendment) Regulations

Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2020

RESERVE BANK OF INDIA
(Foreign Exchange Department)
(CENTRAL OFFICE)

NOTIFICATION

Mumbai, the 15th June,2020

Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2020

No. FEMA. 395(1)/2020-RB.—In exercise of the powers conferred by Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments to the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 [Notification No. FEMA.395/2019-RB dated October 17, 2019] (hereinafter referred to as ‘the Principal Regulations) namely:-

1. Short Title & Commencement

(i) These Regulations may be called the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2020.

(ii) They shall come into force from the date of their publication in the Official Gazette.

2. Amendment to Regulation 3.1 of the Principal Regulations

In Regulation 3.1 of the Principal Regulations-

(i) The existing provision at Sl. No. II shall be substituted by the following, namely

I. Schedule II (Investments by Foreign Portfolio Investors)

A. Mode of payment
(1) The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in a foreign currency account and/ or a Special Non-Resident Rupee (SNRR) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016.
(2) Unless otherwise specified in these regulations or the relevant Schedules, the foreign currency account and SNRR account shall be used only and exclusively for transactions under this Schedule.

B. Remittance of sale proceeds
The sale proceeds (net of taxes) of equity instruments and units of REITs, InViTs and domestic mutual fundmay be remitted outside India or credited to the foreign currency account or aSNRR account of the FPI

(ii) The existing provision at para A (2) of Sl. No. VII shall be substituted by the following, namely:“Unless otherwise specified in these regulations or the relevant Schedules, the foreign currency account and SNRR account shall be used only and exclusively for transactions under this Schedule.”

(iii) The existing provision at Sl. No. VIII shall be substituted by the following, namely:

VIII. Schedule VIII (Investment by a person resident outside India in an Investment Vehicle)

A. Mode of payment:
The amount of consideration shall be paid as inward remittance from abroad through banking channels or by way of swap of shares of a Special Purpose Vehicle or out of funds held in NRE or FCNR(B) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. Further, for an FPI or FVCI, amount of consideration may be paid out of their SNRR account for trading in units of Investment Vehicle listed or to be listed (primary issuance) on the stock exchanges in India.

B. Remittance of sale/ maturity proceeds:
The sale/ maturity proceeds (net of taxes) of the units may be remitted outside India or may be credited to the NRE or FCNR(B) or SNRR account, as applicable of the person concerned

AJAY KUMAR, Regional Director, New Delhi
[ADVT.-III/4/Exty./72/2020-21]

Foot Note:
The Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019, (Notification No. FEMA 395/2019-RB dated October 17, 2019) was published in the Official Gazette vide G.S.R.No.795(E) dated 17.10.2019

Share
Leave a Comment

Recent Posts

  • Income Tax

PCIT has revisionary jurisdiction u/s 263 over the cases passed by the NFAC or the JAO

PCIT has revisionary jurisdiction u/s 263 over the cases irrespective of the fact that the relevant assessment was completed physical…

8 hours ago
  • Insurance

Appellate court interfering with MACT finding must undertake reappreciation of evidence

Appellate court interfering with Motor Accidents Claims Tribunal findings on assessment of disability and loss of earning capacity must undertake…

22 hours ago
  • Income Tax

When delay is not huge & involves huge monetary liability, lenient approach to be taken

When period of delay is not very huge and involve huge monetary liability on the assessee, a lenient approach should…

24 hours ago
  • SEBI

EoGM of company can not ratify diversion of fund raised by preferential issue – SC

Ratification by EoGM of the company can not give legality of the diversion of the fund raised by preferential issue.…

2 days ago
  • Excise/Custom

Return of export cargo from Hormuz Strait where vessel do not lands at original port

CBIC prescribes procedures for return of export cargo from international waters due to closure of the Strait of Hormuz where…

2 days ago
  • Income Tax

Disallowance u/s 13(1)(c) can’t be made primarily that specified concerns earned higher profits.

Mere higher profit margins would not make payments made by Trust as diversion of funds for the benefit of the…

3 days ago