Search
Close this search box.

By Shraddha Ray Menon and Aman Ahmed

Discontinuation of Returns/ Reports under the Foreign Exchange Management Act, 1999

The Foreign Exchange Management Act, 1999 (“FEMA”) is administered through Authorised Dealers (“ADs”). Declarations and averments made to ADs by persons undertaking the activities under FEMA, is a critical method of ensuring this administration. These render critical and essential supervisory control. The degree of forthcomingness and adherence to these compliance requirements, promote review and modification of policies overviewing and regulating foreign exchange transactions under FEMA.

To this end, in September, 2018 Reserve Bank of India (“RBI”) released a Single Master Form (“SMF”) merging nine FDI related reporting forms into a single one, capable of being filled online on reporting platform FIRMS by RBI. This, significantly improved India efforts in Ease of doing Business.

This November RBI relaxed, requirements of filing certain Forms and Reports through ADs prescribed under FEMA. A Master Direction circular dated November 13, 2020 – Reporting under FEMA Act, 1999[1] was released with a similar objective as the September 2018 Master Circular. The Master Direction, in exercise of powers conferred under Sections 10(4)[2] and Section11 (2)[3] of FEMA, is meant to

AD banks have been directed to notify their respective constituents of the change.

In Annexures I and II the details of these relaxations can be viewed.

These changes will aid Ease of Doing Business in India by reducing the frequency, number and depth of Forms and Reports to be filed with the ADs. Most changes will-

RBI has discontinued the following Forms and Reports. These relate to the categories listed in Annexure I:

Annexure II sets out the details of the Forms and frequencies.

ANNEXURE I

The Master Direction objectifies the following:

REMITTANCE FACILITIES

LIBERALISED REMITTANCE SCHEME

ESTABLISHMENT OF BO/LO/PO OR ANY OTHER PLACE OF BUSINESS BY FOREIGN NATIONALS

FOREIGN INVESTMENT

EXTERNAL COMMERCIAL BORROWINGS (ECB)

NON RESIDENT FOREIGN ACCOUNTS

IMMOVABLE PROPERTY

OVERSEAS DIRECT INVESTMENT

TRADE

GUARANTEES

COMPOUNDING

ANNEXURE II

List of Discontinued Reports

Name of ReportReporting EntityFrequency
Category-wise transaction where the amount exceeds USD 5000 per transaction  AD Category-IIMonthly
Category-wise, transaction-wise statement where the amount exceeds USD 25,000 per transactionAD Category- IIMonthly
Statement of Purchase transactions of USD 10,000 and above (including transactions of their franchisees)FFMCs and AD Category- IIMonthly
Extension of Liaison Offices (LOs)AD Category-I banksAs and when extension is granted
Extension of Project Offices (POs)AD Category-I banksAs and when extension is granted
FII/FPI daily: Daily inflow/outflow of foreign fund on account of investment by FPIsAD banksDaily
FII/FPI Return (Monthly): Data relating to actual inflow /outflow of remittances on account of investments by Foreign Institutional Investors (FIIs) in the Indian Capital marketAD Category-I banksMonthly
FVCI reporting: Inflows/outflows of remittances on account of investments by Foreign Venture Capital Investor (FVCIs) and Market value of Investments made by FVCIsAD Category-I banks/Custodian banksMonthly
Reporting of Inflow/Outflow details in respect of Mutual Fund by Asset Management CompaniesAsset Management CompaniesQuarterly
Market value of FII Investment in India on fortnightly basisAD Category-I banksFortnightly
Market value of FII Investment in India on Monthly basisAD Category-I banksMonthly
FII holdings as percentage of floating stockAD Category-I banksMonthly
Form DRR for Issue/transfer of sponsored/unsponsored Depository Receipts (DRs)-Hardcopy@CustodianAt the time of issue/transfer of depository receipts
ADR/GDR Movement Report- two-way fungibilityAD Category-I banksMonthly
Repatriation of Sales proceeds of underlying shares represented by FCCBs/GDRs/ ADRsCustodianMonthly  
GDR/ADR underlying shares issued, re deposited and released monthly reportingCustodianMonthly
Monitoring of disinvestments by Overseas Corporate BodiesAD banksMonthly

[1] https://rbidocs.rbi.org.in/rdocs/notification/PDFs/13MDRD77DCF42C4E64B6C9A83C24EF5D4E188.PDF

[2] An authorised person shall, in all his dealings in foreign exchange or foreign security, comply with such general or special directions or orders as the Reserve Bank may, from time to time, think fit to give, and, except with the previous permission of the Reserve Bank, an authorised person shall not engage in any transaction involving any foreign exchange or foreign security which is not in conformity with the terms of his authorisation under this section.

[3] The Reserve Bank may, for the purpose of ensuring the compliance with the provisions of this Act or of any rule, regulation, notification, direction or order made thereunder, direct any authorised person to furnish such information, in such manner, as it deems fit.

Leave a Reply

Your email address will not be published. Required fields are marked *

Acknowledgements & Disclaimers

  • This website with its’ contents, are not advertisement, personal communication, solicitation, invitation, or inducement to legal advice or legal advice from Tag & Bench Associates (the “Firm”) or its founder or other members of the Firm;
  • It does not create an attorney-client relationship;
  • The Firm owns intellectual property rights in the website and its’ contents made available for information, only and Firm does not assume any responsibility for the accuracy and completeness of the same. The Firm has full right to proceed against infringers;
  • User will be governed under applicable laws or regulations of India;
  • The Firm does not collect any personal data other than cookies captured when you visit the website;
  • The Firm cannot undertake any legal representation through this website. Users are discouraged from sending any confidential information.