Refund of Share Application Moeny Received through FDI

Originally posted by : Vikas Wadhawan
	Hi Ours is a Pvt. Ltd. Company and we have received share application money from our foriegn investors 2 months back. Due to some reasons we are not able to go ahead with the allotment process and now therefore need to refund this money. Can we refund this money to the foriegn investors without issuing any shares out of this? Are there any special guidelines / rules which we need to keep in mind while remiting this money back to our foriegn investors? Also please advise what all filing would be required for refund of this share application money? Thanks in advance for your advise

I hope that you must have informed RBI through AD within 30 days of receipt of said money.You can freely remit the share application money so received within 180 days. There are no special guidelines / rules which we need to keep in mind while remiting this money back to our foriegn investors.

Kindly also inform the concerned RBI towards refunding such FDI proceeds which you have received through the respective AD(banker).Obtain the due acknwoeldegement from the RBI.

Get back in case for any afurther clarification.

Kind regards,

RK

Kindly also inform the concerned RBI towards refunding such FDI proceeds which you have received through the respective AD(banker).Obtain the due acknwoeldegement from the RBI.

Get back in case for any afurther clarification.

Kind regards,

RK

Hi Vikas,

The share application money received from out of India needs to be used for allotment with in 180 days of its receipt or it may be refunded back to the investor before the expiry of 180 days provided no interest is paid on the amount to the investor.

While remitting the moeny back the AD will take TT cum A2 application for along with the declaration for the RBI that the maount does not include any interest component. When the amount is refunded the AD himself provides the details to RBI there is no specific requirement to inform RBI. Please note that after refund please get the endorsement of the refund at the back side of original FIRC recieved at the time of inward remittance.

If any query comes from RBI you can show the amended FIRC as proff of refund within 180 days.

Regards,

Rashi Goyal