Executive Summary:
This circular from the Reserve Bank of India announces the discontinuation of 17 reports under the Foreign Exchange Management Act, 1999, with immediate effect. This decision aims to improve ease of doing business and reduce compliance costs. The Master Direction Reporting under FEMA, 1999, will be updated to reflect these changes.
Key Points / Main Content:
Discontinuation of Reports:
* The RBI has discontinued 17 reports/returns under FEMA, 1999.
* A list of the discontinued reports is provided in the Annexure of the circular.
Master Direction Update:
* The Master Direction Reporting under Foreign Exchange Management Act, 1999, dated January 01, 2016, will be updated to reflect these changes.
Important Note on Form DRR:
* Only the hardcopy filing of Form DRR is discontinued.
* The domestic custodian should continue to report Form DRR on the FIRMS application as per Regulation 4(5) of FEM (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019.
Legal Basis:
* The directions are issued under Sections 10(4) and 11(2) of the Foreign Exchange Management Act, 1999.
Impact Analysis:
Authorised Persons (AD Category I & II banks, FFMCs):
* Impact: Reduced compliance burden due to the elimination of 17 reporting requirements.
* Action Required: Note the discontinued reports listed in the annexure. Bring the contents of the circular to the notice of their constituents.
Domestic Custodians:
* Impact: Discontinuation of hardcopy filing of Form DRR.
* Action Required: Continue reporting Form DRR on the FIRMS application.
Foreign Portfolio Investors (FPIs), Foreign Institutional Investors (FIIs), Foreign Venture Capital Investors (FVCIs), Asset Management Companies:
* Impact: Indirectly affected through changes in reporting requirements for AD banks and custodians.
* Action Required: Be aware of the changes in reporting and compliance requirements for AD banks.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the Indian financial system.
Foreign Exchange Management Act, 1999: An Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Master Direction Reporting under Foreign Exchange Management Act, 1999: A set of comprehensive guidelines issued by the Reserve Bank of India regarding reporting requirements under FEMA, 1999.
Authorised Persons: Entities authorized by the Reserve Bank of India to deal in foreign exchange.
AD Category I banks: Authorized Dealer Category I banks, authorized by the Reserve Bank of India to handle a wide range of foreign exchange transactions.
AD Category II: Authorized Dealer Category II, authorised to undertake all current account transactions, all permissible capital account transactions.
Foreign Institutional Investors (FIIs): An investor or investment fund investing in a country outside of the one in which it is registered or headquartered.
Foreign Portfolio Investors (FPIs): A class of investors permitted to invest in Indian financial markets.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2020-21/66
A.P. (DIR Series) Circular No. 05 November 13, 2020
To
All Authorised Persons
Madam/Sir
Discontinuation of Returns/Reports under Foreign Exchange Management Act, 1999
The attention of Authorised Persons is invited to the Master Direction - Reporting under
Foreign Exchange Management Act, 1999 dated January 01, 2016, as amended from time to
time, and other reporting related instructions issued by the Reserve Bank of India.
2. With a view to improve the ease of doing business and reduce the cost of compliance, the
existing forms and reports prescribed under FEMA, 1999, were reviewed by the Reserve
Bank. Accordingly, it has been decided to discontinue the 17 returns/reports as listed in the
Annexure with immediate effect.
3. The Master Direction - Reporting under Foreign Exchange Management Act, 1999 dated
January 01, 2016, shall accordingly be updated to reflect the above changes. AD banks may
bring the contents of this circular to the notice of their constituents.
4. The directions contained in this circular have been issued under Section 10(4) and 11(2) of
the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions/approvals, if any, required under any other law.
Yours faithfully,
(Ravinder Singh Amar)
Chief General ManagerAnnexure
List of Discontinued Reports
Sl No. Name of Report Reporting Entity Frequency
1 Category-wise transaction where the amount exceeds AD Category-II Monthly
USD 5000 per transaction
2 Category-wise, transaction-wise statement where the AD Category- II Monthly
amount exceeds USD 25,000 per transaction
3 Statement of Purchase transactions of USD 10,000 FFMCs and AD Monthly
and above (including transactions of their Category- II
franchisees)
4 Extension of Liaison Offices (LOs) AD Category-I As and when
banks extension is
granted
5 Extension of Project Offices (POs) AD Category-I As and when
banks extension is
granted
6 FII/FPI daily: Daily inflow/outflow of foreign fund AD banks Daily
on account of investment by FPIs
7 FII/FPI Return (Monthly): Data relating to actual AD Category-I Monthly
inflow /outflow of remittances on account of banks
investments by Foreign Institutional Investors (FIIs)
in the Indian Capital market
8 FVCI reporting: Inflows/outflows of remittances on AD Category-I Monthly
account of investments by Foreign Venture Capital banks/Custodian
Investor (FVCIs) and Market value of Investments banks
made by FVCIs
9 Reporting of Inflow/Outflow details in respect of Asset Management Quarterly
Mutual Fund by Asset Management Companies Companies
10 Market value of FII Investment in India on AD Category-I Fortnightly
fortnightly basis banks
11 Market value of FII Investment in India on Monthly AD Category-I Monthly
basis banks
12 FII holdings as percentage of floating stock AD Category-I Monthly
banks
13 Form DRR for Issue/transfer of Custodian At the time of
sponsored/unsponsored Depository Receipts (DRs)- issue/transfer
Hardcopy@ of depository
receipts
14 ADR/GDR Movement Report- two way fungibility AD Category-I Monthly
banks
15 Repatriation of Sales proceeds of underlying shares Custodian Monthly
represented by FCCBs/GDRs/ ADRs
16 GDR/ADR underlying shares issued, re deposited Custodian Monthly
and released monthly reporting
17 Monitoring of disinvestments by Overseas Corporate AD banks Monthly
Bodies
@ Please note that it is only the hardcopy filing of form DRR that has been discontinued. The domestic
custodian may continue to report the form DRR on FIRMS application in terms of Regulation 4 (5) of
FEM (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019.