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Date: 06-May-2024 Category: Extra Ordinary State: Union Government Country: India

In exercise of the powers conferred by sub section 2 of section 47 of the Foreign Exchange Management Act

Issued by Reserve Bank of India · Foreign Exchange Department

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Executive Summary & Key Takeaways

What it means

  • The notification introduces the Foreign Exchange Management (Deposit) (Fourth Amendment) Regulations, 2024, which amends the Foreign Exchange Management (Deposit) Regulations, 2016.
  • The amendment allows authorized dealers in India to permit persons resident outside India (PROI) to open, hold, and maintain interest-bearing accounts in Indian Rupees and/or foreign currency.
  • The purpose of these accounts is for posting and collecting margin in India for permitted derivative contracts entered into by the PROI.

Key Changes

  • A new sub-regulation (6) is added to Regulation 7 of the Foreign Exchange Management (Deposit) Regulations, 2016.
  • This new sub-regulation permits authorized dealers to allow non-residents to open and maintain interest-bearing INR or foreign currency accounts for margin purposes related to derivative contracts.
  • The permission is subject to compliance with the Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020, dated October 23, 2020, as amended, and any directions issued by the Reserve Bank of India.

Impact Analysis

Impact on Authorized Dealers

  • Authorized dealers will need to develop systems for monitoring these accounts to ensure they are used solely for the permitted purpose of margin posting and collection for derivative contracts.

Impact on Persons Resident Outside India (PROI)

  • PROIs will need to coordinate with authorized dealers in India to open and manage these accounts, ensuring compliance with all applicable regulations.

Impact on Reserve Bank of India (RBI)

  • RBI will likely oversee the authorized dealers to ensure compliance and prevent misuse of these accounts.

Suggested Action Items

  • RBI: Monitor implementation and issue further guidance as necessary.

Key Entities Referenced

Reserve Bank of India (RBI): The central bank of India, responsible for regulating foreign exchange and banking activities. Authorized Dealers: Banks and other financial institutions authorized by the RBI to deal in foreign exchange. Persons Resident Outside India (PROI): Individuals or entities residing outside of India as defined under FEMA. Foreign Exchange Management Act, 1999: The primary legislation governing foreign exchange transactions in India. Foreign Exchange Management (Deposit) Regulations, 2016: Regulations pertaining to deposits in India under FEMA. Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020: Regulations specifically governing margin requirements for derivative contracts.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-एम.एच.-अ.-06052024-254058 xxxGIDHxxx CG-MH-E-06052024-254058 xxxGIDExxx असाधारण EXTRAORDINARY भाग III—खण् ड 4 PART III—Section 4 प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 316] नई ददल्ली, सोमर्ार, मई 6, 2024/र्िै ाख 16, 1946 No. 316] NEW DELHI, MONDAY, MAY 6, 2024/VAISAKHA 16, 1946 भारतीय ररज़र् वबकैं (जर्देिी मद्रु ा जर्भाग) अजधसचू ना मुंबई, 6 मई, 2024 जर्देिी मद्रु ा प्रबधं (िमा) (चौथा सिं ोधन), जर्जनयमार्ली, 2024 फा. स.ं फेमा 5(आर)/(4)/2024-आरबी.—जर्देिी मुद्रा प्रबंध अजधजनयम,1999 (1999 का 42) की धारा 47 की उप-धारा (2) द्वारा प्रदत्त िजियों का प्रयोग करत े हुए भारतीय ररज़र्व बैंक एतद्द्वारा जर्देिी मुद्रा प्रबंध (िमा) जर्जनयमार्ली, 2016 (ददनाकं 01 अप्रलै 2016 की अजधसूचना सं.फेमा.5(आर)/2016-आरबी) (जिसे इसके पश्चात “मलू जर्जनयमार्ली” कहा गया ह)ै म ेंजनम्नानुसार संिोधन करता है, यथा:- 1. सजं िप्त नाम और प्रारंभ: (i) यह जर्जनयमार्ली जर्देिी मुद्रा प्रबंध (िमा) (चौथा संिोधन) जर्जनयमार्ली, 2024 कहलाएगी। (ii) यह जर्जनयमार्ली सरकारी रािपत्र म ेंइसके प्रकािन की तारीख से लागू होगी। 2. मलू जर्जनयमार्ली के जर्जनयम 7 म ेंसिं ोधन: मूल जर्जनयमार्ली म,ें जर्जनयम 7 म,ें उप-जर्जनयम 5 के बाद, जनम्नजलजखत नया उप-जर्जनयम िोड़ा िाएगा, यथा; 2916 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] “6. भारत म ें जस्ट्थत प्राजधकृत व्यापारी 23 अक्टूबर 2020 की जर्देिी मुद्रा प्रबंध (जडररर्ेरटर् संजर्दाओं हते ु मार्िवन) जर्जनयमार्ली, 2020, समय-समय पर यथासंिोजधत, के अनुसार भारत के बाहर जनर्ासी व्यजि को यह अनुमजत दे सकता ह ै दक र्ह अपन े द्वारा दकए गए दकसी अनुमजत-प्राप्त जडररर्ेरटर् संजर्दा के जलए भारत में मार्िवन राजि भेिने और उसे प्राप्त करन े के उद्देश्य से भारतीय रुपय े में और/ या जर्देिी मुद्रा म ें ब्याि-अिवक खाता खोल सके, धारण कर सके और बनाए रख सके बित ेर्ह इस संबंध म ेंररज़र्व बैंक द्वारा िारी जनदिे ों का पालन करता हो।“ लता राधाकृष्णन, महाप्रबधं क (प्रभारी अजधकारी) [जर्ज्ञापन-III/4/असा./084/2024-25] फुट नोट: मूल जर्जनयमार्ली को िीएसआर सं.389 (ई), ददनांक 1 अप्रैल 2016 द्वारा सरकारी रािपत्र के भाग II खण्ड 3, उप-खण्ड (i) म ेंप्रकाजित दकया गया था और इसे बाद म ेंजनम्नजलजखत के माध्यम से संिोजधत दकया गया 09.11.2018 की िीएसआर स.ं 1093 (ई) 16.07.2019 की िीएसआर स.ं 498 (ई) सं.फेमा 5(आर)/(3)/2019-आरबी, ददनांक 13 नर्म्बर 2019 RESERVE BANK OF INDIA (Foreign Exchange Department) NOTIFICATION Mumbai, the 6th May, 2024 Foreign Exchange Management (Deposit) (Fourth Amendment) Regulations, 2024 F. No. FEMA 5(R)/(4)/2024-RB.—In exercise of the powers conferred by sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following amendment in the Foreign Exchange Management (Deposit) Regulations, 2016 (Notification No. FEMA 5 (R)/2016- RB dated April 01, 2016) (hereinafter referred to as 'the Principal Regulations'), namely:- 1. SHORT TITLE AND COMMENCEMENT: (i) These regulations shall be called the Foreign Exchange Management (Deposit) (Fourth Amendment) Regulations, 2024. (ii) They shall come into force with effect from the date of their publication in the Official Gazette. 2. Amendment to Regulation 7 of the Principal Regulations: In the Principal Regulations, in Regulation 7, after sub-regulation 5, the following new sub-regulation shall be inserted, namely:- “6) An authorised dealer in India may allow a person resident outside India to open, hold and maintain an interest-bearing account in Indian Rupees and / or foreign currency for the purpose of posting and collecting margin in India, for a permitted derivative contract entered into by such person in terms of Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020, dated October 23, 2020, as amended from time to time, subject to directions issued by the Reserve Bank in this regard.” LATHA RADHAKRISHNAN, General Manager (Officer-in-Charge) [ADVT.-III/4/Exty./084/2024-25] Foot Note: The Principal Regulations were published in the Official Gazette vide No. G.S.R. 389(E) dated April 01, 2016 in Part II, Section 3, sub-section (i) and subsequently amended vide G.S.R.1093 (E) dated 09.11.2018 G.S.R. 498 (E) dated 16.07.2019 No. FEMA 5(R)/(3)/2019-RB dated November 13, 2019 5Uploaded 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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