(1)
Foreign Exchange Management (Remittance of Assets)
Regulations, 2016
RBI Notification:
Notification
No. FEMA 13 (R)/2016-RB dated April 1, 2016
Applicability:
All
Authorised Persons
Crux of the Notification:
The RBI in supersession of its Notification No. FEMA 13/2000-RB dated May 3, 2000 makes regulations with regard to remittance outside India by a person whether resident in India or not, of assets in India.
The notification broadly contains regulations related to:
- Prohibition on remittance outside India of assets held in India. However in certain cases the RBI permits any person to make remittances of assets held in India.
- Requirement of permission:
o for remittance of assets in certain cases:
§ by certain citizens of foreign state, not being a Person of Indian origin (PIO) or a citizen of Nepal or Bhutan
§ by Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) remitting an amount exceeding USD 1,000,000 (US Dollar One million only) per financial year through an authorised dealer.
§ In the event of liquidation of a company under the Companies Act 2013.
o for an Indian entity to remit funds in certain cases such as contribution towards, PF, superannuation fund, pension fund and so on.
o for remittance of assets on closure or remittance of winding up proceeds of branch office/ liaison office (other than project office)
- Applicability of tax laws on any transactions.
Source:
(2)
Foreign Exchange Management (Deposit) Regulations,
2016
RBI Notification:
Notification No. FEMA 5(R)/2016-RB
Applicability:
All
Authorised Persons
Crux of the Notification:
The RBI in supersession of its Notification No. FEMA 5/2000-RB dated May 3, 2000 makes regulations relating to deposits made or accepted between a person resident in India and a person resident outside India.
The notification broadly contains regulations relating to the following:
- RBI generally restricts deposits between a person resident in India and a person resident outside India.
However, on making an application, the RBI may, if it feels necessary, permit the person resident in India to accept or make deposit from or with a person resident outside India
- The RBI has provided exemptions to certain deposits.
- Acceptance of deposits:
o by an authorised dealer/ authorised bank from persons resident outside India
o by persons other than authorised dealer/ authorised bank
- Other deposits made or held by authorised dealer
- Nomination facility provided by authorised dealers in respect of the deposits/ accounts in these regulations maintained by individual account holders.
Source:
(3)
Overseas Direct Investment (ODI) – Rationalization and
reporting of ODI Forms
RBI Notification:
Notification no: RBI//2015-16/374 A.P. (DIR Series) Circular No.62 dated April 13, 2016
Applicability:
Authorised
Dealer Banks
Crux of the Notification:
For the purpose of capturing all the data pertaining to IP undertaking ODI as well as the related transaction, the RBI has decided to subsume Form ODI Part II within Form ODI Part I. Therefore the Form ODI shall henceforth contain five sections instead of six.
Source:
(4)
Applicability
of Concentration of Credit/ Investment Norms
RBI Circular:
Ref no: RBI/2015-16/363 DNBR (PD) CC.No.077/03.10.001/2015-16 dated April 7, 2016
Applicability:
Non-Banking Financial
Companies (NBFC-NDSI)
Crux of the Circular:
Earlier it was required for a Non Deposit
accepting NBFC to make an application to the RBI for an appropriate
dispensation from the concentration of credit/ investment norms.
In this regard RBI has currently
decided to exempt Non Deposit accepting Systemically Important NBFCs from the concentration
of credit/ investment norms.
Source:
(5) Non-Banking Financial Company-Micro Finance
Institutions (Reserve Bank) Directions, 2011 – Acting as Channelizing Agents
for Schemes operated by Central/State Government Agencies
RBI Circular:
Ref no: RBI/2015-16/370 DNBR.CC.PD.No.078/03.10.038/2015-16 dated April 13, 2016
Applicability:
All
NBFC-MFIs
Crux of the Circular:
- The loans provided by the NBFC-MFIs acting as channelizing agents for schemes operated by Central/ State government agencies shall be treated as qualifying assets and the interest rate for such loans shall not exceed 4%.
- The above loans managed by NBFC-MFIs shall be considered as separate business segment.
- These loans should not be considered while calculating the minimum qualifying asset criteria. (Currently 85%)
- The NBFC-MFIs are permitted to act as channelizing agent subject to the following conditions:
o The fund received or receivable by the NBFC-MFIs shall be maintained by them separately.
o The loans given by them shall be subject to applicable asset classification, income recognition, provisioning norms as well as other prudential norms.
o In order to prevent multiple borrowings and to obtain complete picture of indebtedness of a borrower the NBFC-MFIs shall report details of all loans to Credit Information Companies (CICs).
Source:
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