RBI amends Foreign Investment guidelines for reporting in SMF on FIRMS

The Reserve Bank of India (RBI)vide Notification no. RBI/2022-23/160 A.P. (DIR Series) Circular No. 22, dated04.01.2023has amended the guidelines for reporting in SMF on FIRMSand issued a circular on Foreign Investment in India - Rationalisation of reportingin Single Master Form (SMF) on FIRMS Portal in exercise of power conferred under sections 10(4) and11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are withoutprejudice to permissions/approvals, if any, required under any other law.

RBI has introduced a Single Master Form ("SMF") to integrate the reporting structure of various types of Foreign Investment in India. SMF would provide a facility for reporting total foreign investment in an Indian entity {as defined in Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations 2017, dated November 7, 2017}, as also investment by persons resident outside India in an Investment Vehicle.

Applicability

The Framework is applicable with immediate effect.

It is advised to the Authorised Dealer Category-I banks (AD banks) that the following changes are being implemented with respect to the reporting of foreign investment in SMF on FIRMS portal:

1. The forms submitted on the portal will be auto-acknowledged. The AD banks shall verify the same within five working days based on the uploaded documents, as specified.

2. In cases of delayed reporting, the AD banks shall either advise the Late Submission Fee (LSF) to the applicants, which will be computed by the system or advise for compounding of contravention, as the case may be.

SALIENT FEATURES OF THE CHANGES MADE IN THE SYSTEM ARE

Auto-acknowledgement of SMF in FIRMS and online calculation of LSF

1) The forms submitted within prescribed timelines, will be verified by the AD banks based on the uploaded mandatory documents and ensure that the same are in compliance with the extant guidelines.

2) The system would identify the delay in reporting, if any.

3) For forms filed with a delay less than or equal to three years, the AD banks will approve the same, subject to payment of LSF.

4) The LSF will be computed by the system and an e-mail will be sent to the applicant and the concerned Regional Office (RO) of RBI specifying the amount and the timeline within which it is to be paid to the concerned RO of RBI.

5) Once the LSF amount is realised, the concerned RO will update the status in the FIRMS portal and the updated status will be communicated to the applicant through a system-generated e-mail, which can also be viewed in the FIRMS portal.

6) The AD bank will approve the forms filed with a delay greater than three years, subject to compounding of contravention. The applicant may thereafter approach RBI with their application for compounding.

7) The remarks of the AD Bank for rejection of forms, if any, will be communicated to the applicant through a system-generated e-mail and the same can also be viewed in the FIRMS portal.

Source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12433&Mode=0#AN

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