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FDI Reporting Guidelines for Banks

The Reserve Bank of India (RBI) has issued a circular to all authorized dealer banks regarding reporting requirements under the Foreign Direct Investment (FDI) scheme. The circular reminds banks that Indian companies must report details of consideration received for FDI instruments within 30 days of receipt, and issue shares within 180 days, to the relevant RBI regional office. Any delays in reporting or issuing shares beyond 180 days without approval are violations of foreign exchange laws. Banks are advised to make clients aware of FDI reporting requirements and monitor inward remittances and subsequent share issues to ensure compliance.

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96 views2 pages

FDI Reporting Guidelines for Banks

The Reserve Bank of India (RBI) has issued a circular to all authorized dealer banks regarding reporting requirements under the Foreign Direct Investment (FDI) scheme. The circular reminds banks that Indian companies must report details of consideration received for FDI instruments within 30 days of receipt, and issue shares within 180 days, to the relevant RBI regional office. Any delays in reporting or issuing shares beyond 180 days without approval are violations of foreign exchange laws. Banks are advised to make clients aware of FDI reporting requirements and monitor inward remittances and subsequent share issues to ensure compliance.

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ekta bahl
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© Attribution Non-Commercial (BY-NC)
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RESERVE BANK OF INDIA

Foreign Exchange Department


Central Office
Mumbai - 400 001

RBI/2010-11/ 199 September 14, 2010


A.P. (DIR Series) Circular No. 13

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.

2. 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.

3. 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
2

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.

4. AD Category - I banks may bring the contents of this circular to the notice of
their constituents and customers concerned.

5. 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

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