Reporting under Foreign Direct Investment (FDI) Scheme
RBI/2010-11/199
A.P. (DIR Series) Circular No. 13
September 14, 2010
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 beyond 180 days of receipt of the same without
the Reserve Banks 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
CAclubindia
