1. Attention of Authorised Dealer (AD) Category - I banks is invited to the Foreign Exchange Management (Nondebt Instruments) Rules, 2019, (hereinafter referred to as ‘Rules’) notified by the Central Government on October 17, 2019.
2. We draw your attention to Schedule II to the Rules which prescribes that investment made by foreign portfolio investor along with its investor group (hereinafter referred to as ‘FPI’) shall be less than 10 percent of the total paid-up equity capital on a fully diluted basis. Further, FPI investing in breach of the prescribed limit shall have the option of divesting their holdings or reclassifying such holdings as FDI. In this regard, an operational framework for such reclassification of foreign portfolio investment by FPI to FDI is provided in the Annex. The AD Category-I banks may accordingly facilitate the reporting of such transactions as per this framework.
3. These directions will become operative with immediate effect. AD Category-I banks may bring the contents of this circular to the notice of their customers/constituents concerned.
4. 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 are without prejudice to permissions/approvals, if any, required under any other law.
Reporting of Foreign Exchange Transactions to Trade Repository - November 08, 2024
This story is from the December 2024 edition of BANKING FINANCE.
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This story is from the December 2024 edition of BANKING FINANCE.
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