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Date: 07-Aug-2024 Category: Extra Ordinary State: Union Government Country: India

In exercise of the powers conferred by clause a of sub section 2 of section 6 and section 47 of the Foreign Exchange Management Act

Issued by Reserve Bank of India · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • This gazette notification announces the Foreign Exchange Management (Debt Instruments) (Third Amendment) Regulations, 2024, issued by the Reserve Bank of India (RBI).
  • These regulations amend the Foreign Exchange Management (Debt Instruments) Regulations, 2019 (Principal Regulations), primarily to allow non-resident Indians (NRIs) to purchase and sell Indian Sovereign Green Bonds issued in the International Financial Services Centre (IFSC) in India.

Key Changes

  • The amendment introduces a new sub-paragraph (F) in paragraph 1 of Schedule 1 to the Principal Regulations. This allows NRIs holding securities accounts with a depository in the IFSC to buy or sell Sovereign Green Bonds.
  • A new clause (4B) is added to paragraph 2 of Schedule 1. This specifies that payments for purchasing Sovereign Green Bonds by NRIs must be made through inward remittances via banking channels or from funds held in a foreign currency account maintained as per RBI/IFSCA regulations.
  • A new clause (2B) is added to paragraph 4 of Schedule 1. This clarifies that sale/maturity proceeds of Sovereign Green Bonds held by NRIs can be remitted outside India (net of applicable taxes).

Impact Analysis

Impact on NRIs

  • Requires NRIs to adhere to specific remittance procedures outlined in the amended regulations.

Impact on the Indian Government

  • Potential increase in foreign exchange reserves.

Impact on RBI and IFSCA

  • Potential need for enhanced monitoring and enforcement mechanisms.

Suggested Action Items

  • RBI and IFSCA should establish a robust monitoring system to ensure compliance and address any challenges arising from the implementation of these amendments.

Key Entities Referenced

Reserve Bank of India (RBI): The issuer of the notification and the regulatory body responsible for overseeing foreign exchange management in India. International Financial Services Centre (IFSC) Authority (IFSCA): The regulatory body overseeing the IFSC in India, involved in regulating transactions within the IFSC. Foreign Exchange Management Act, 1999 (FEMA): The Act under which the RBI has the power to issue these regulations. Foreign Exchange Management (Debt Instruments) Regulations, 2019: The principal regulations that have been amended by this notification. Sovereign Green Bonds: Government-issued bonds aimed at financing green projects, now accessible to NRIs under the amended regulations.
Official Source Record View Original Source →
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-एम.एच.-अ.-10082024-256254 xxxGIDHxxx CG-MH-E-10082024-256254 xxxGIDExxx असाधारण EXTRAORDINARY भाग III—खण् ड 4 PART III—Section 4 प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 603] िई ददल्ली, ब धर्ार, अगस्ट्त 7, 2024/ श्रार्ण 16, 1946 No. 603] NEW DELHI, WEDNESDAY, AUGUST 7, 2024/ SHRAVANA 16, 1946 भारतीय ररज़र् वबकैं (जर्त्तीय बािार जर्जियमि जर्भाग) (केन्द्रीय कायालव य) अजधसचू िा म ंबई, 2 अगस्ट्त , 2024 जर्देिी मर ा प्रबधं ि (ऋण जलखत) (तीसरा सिं ोधि) जर्जियमार्ली, 2024 स.ंफेमा.396(3)/2024-आरबी. — जर्देिी म रा प्रबंधि अजधजियम, 1999 (1999 का 42) की धारा 6 की उप-धारा (2) के खंड (ए) और धारा 47 द्वारा प्रदत्त िजियों का प्रयोग करते हुए, भारतीय ररज़र्व बैंक जर्देिी म रा प्रबंधि (ऋण जलखत) जर्जियमार्ली, 2019 (अजधसूचिा सं फेमा.396/2019-आरबी ददिांक 17 अक्टूबर, 2019) (इसके पश्चात इसे 'मलू जर्जियमार्ली' कहा गया ह)ै म ेंजिम्नाि सार संिोधि करता है, अर्ावत:् – 1. लघ िीर्कव और प्रर्तिव (i) य ेजर्जियमि जर्देिी म रा प्रबंधि (ऋण जलखत) (तीसरा संिोधि) जर्जियमार्ली, 2024 कह ेिाएंगे। (ii) ये जर्जियमि िासकीय रािपत्र में प्रकािि की तारीख से प्रभार्ी होंगे। 4978 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] 2. मलू जर्जियमार्ली की अिस चू ी 1 म ेंसिं ोधि (i) मलू जर्जियमार्ली की अि सूची 1 में पैराग्राफ 1 में, उप पैराग्राफ ‘ई’ के बाद, जिम्नजलजखत िया उप-पैराग्राफ अन्द्तःस्ट्र्ाजपत दकया िाएगा:- “एफ. भारत म ेंअतंरराष्ट्रीय जर्त्तीय सर्ेाएँ केंर (आईएफएससी) म ेंराजष्ट्रक हररत बॉण्ड खरीदि ेके जलए भारत के बाहर के जिर्ासी व्यजियों को अिम जत (1) भारत के बाहर के जिर्ासी व्यजि िो भारत में आईएफएससी में जडपोजिटरी में प्रजतभूजत खाता रखते हैं, ररज़र्व बैंक द्वारा जिर्दष्टव जियमों और ितों के अि सार राजष्ट्रक हररत बॉण्ड की खरीद या जबक्री कर सकते ह।ैं" (ii) मूल जर्जियमार्ली की अि सूची 1 के पैराग्राफ 2 में, खडं (4ए) के बाद जिम्नजलजखत िया खंड अंतःस्ट्र्ाजपत दकया िाएगा:- “(4बी) इस अि सूची के परैाग्राफ 1 के उप-पैराग्राफ (एफ) के अि सार भारत के बाहर के जिर्ासी व्यजियों द्वारा भारत सरकार द्वारा िारी राजष्ट्रक हररत बॉण्ड की खरीद के जलए प्रजतफल की राजि का भ गताि बैंककंग चैिलों के माध्यम स ेजर्देि से आर्क जर्प्रेर्ण म ेंस ेया ररज़र् वबैंक और/या अंतरराष्ट्रीय जर्त्तीय सेर्ाएँ केंर प्राजधकार द्वारा िारी जर्जियमिों के अि सार अि रजित जर्देिी म रा खात ेमें धाररत जिजधयों म ेंसे दकया िाएगा। (iii) मूल जर्जियमार्ली की अि सूची 1 के पैराग्राफ 4 म,ें खडं (2ए) के बाद जिम्नजलजखत िया खंड अतं ःस्ट्र्ाजपत दकया िाएगा:- “(2बी) इस अि सूची के परैाग्राफ 1 के उप-पैराग्राफ (एफ) के अि सार भारत के बाहर के जिर्ासी व्यजियों द्वारा धाररत जलखतों की जबक्री/पररपक्वता लाभ (जिर्ल कर, यर्ा लाग ूहो) को भारत स ेबाहर जर्प्रेजर्त दकया िाएगा।” जडम्पल भांजडया, म ख्य महाप्रबधं क [जर्ज्ञापि-III/4/असा./372/2024-25] फ टिोट:- मलू जर्जियमार्ली िासकीय रािपत्र में ददिांक 17 अक्टूबर, 2019 को िी.एस.आर. सं.796 (ई) के तहत भाग II, धारा 3, उप-धारा (i) म ेंप्रकाजित दकया गया र्ा और जिम्नाि सार संिोजधत दकया गया र्ा: 1. अजधसूचिा सं. फेमा 396 (1)/2021-आरबी [जर्देिी म रा प्रबंधि (ऋण जलखत) (प्रर्म संिोधि) जर्जियमार्ली, 2021] ददिांक 13 अक्टूबर, 2021 को भारत के रािपत्र [असाधारण, भाग III-धारा 4] म,ें रािपत्र आईडी सीिी-एमएच-ई-21102021-230591 ददिाकं 21.10.2021 के माध्यम से प्रकाजित। 2. अजधसूचिा सं. फेमा 396 (2)/2023-आरबी [जर्देिी मर ा प्रबंधि (ऋण जलखत) (जद्वतीय संिोधि) जर्जियमार्ली, 2023] ददिांक 16 अक्टूबर, 2023 को भारत के रािपत्र [असाधारण, भाग III-धारा 4] म,ें रािपत्र आईडी सीिी-डीएल-ई-21102023-249619 ददिांक 20.10.2023 के माध्यम स ेप्रकाजित। RESERVE BANK OF INDIA (Financial Markets Regulation Department) (CENTRAL OFFICE) NOTIFICATION Mumbai, the 2nd August, 2024 Foreign Exchange Management (Debt Instruments) (Third Amendment) Regulations, 2024 No. FEMA.396(3)/2024-RB. — In exercise of the powers conferred by clause (a) of sub-section (2) of section 6 and section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendment to the Foreign Exchange Management (Debt Instruments) Regulations, 2019[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3 (Notification No. FEMA.396/2019-RB dated October 17, 2019) (hereinafter referred to as 'the Principal Regulation'), namely:- 1. Short title and commencement (i) These Regulations shall be called the Foreign Exchange Management (Debt Instruments) (Third Amendment) Regulations, 2024. (ii) They shall come into force with effect from the date of their publication in the Official Gazette. 2. Amendment to Schedule 1 to the Principal Regulation (i) In paragraph 1 of Schedule 1 to the Principal Regulation, after sub-paragraph ‘E’, the following new sub-paragraph shall be inserted:- “F. Permission to persons resident outside India for purchase of Sovereign Green Bonds in the International Financial Services Centre (IFSC) in India (1) “Persons resident outside India that maintain a securities account with a depository in IFSC in India may purchase or sell Sovereign Green Bonds issued by the Government of India, as per terms and conditions specified by the Reserve Bank.” (ii) In paragraph 2 of Schedule 1 to the Principal Regulation, after clause (4A) the following new clause shall be inserted:- “(4B) The amount of consideration for purchase of Sovereign Green Bonds issued by the Government of India by persons resident outside India in terms of sub-paragraph (F) of paragraph 1 of this Schedule shall be paid out of inward remittance from abroad through banking channels or out of funds held in a foreign currency account maintained in accordance with the regulations issued by the Reserve Bank and/or the International Financial Services Centre Authority.” (iii) In paragraph 4 of Schedule 1 to the Principal Regulation, after clause (2A) the following new clause shall be inserted:- “(2B) The sale/ maturity proceeds (net of taxes, as applicable) of instruments held by persons resident outside India in terms of sub-paragraph (F) of paragraph 1 of this Schedule may be remitted outside India.” DIMPLE BHANDIA, Chief General Manager [ADVT.-III/4/Exty./372/2024-25] Foot Note:- The Principal Regulation was published in the Official Gazette vide G.S.R.No.796(E) dated October 17, 2019 in Part II, Section 3, sub-Section (i), and amended vide: 1. Notification no. FEMA 396(1)/2021-RB [Foreign Exchange Management (Debt Instruments) (First Amendment) Regulations, 2021] dated October 13, 2021 published in the Gazette of India [Extraordinary, Part III–Section 4], vide Gazette ID CG-MH-E-21102021-230591 dated 21.10.2021. 2. Notification no. FEMA 396(2)/2023-RB [Foreign Exchange Management (Debt Instruments) (Second Amendment) Regulations, 2023] dated October 16, 2023 published in the Gazette of India [Extraordinary, Part III–Section 4], vide Gazette ID CG-DL-E-21102023-249619 dated 20.10.2023. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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