RBI May 2014

By June 22, 2014 December 20th, 2019 No Comments
Date Subject Amendment
(DIR Series) Circular No.117
02-May-14 RBI/2013-14/577
A.P. (DIR Series) Circular No.127 – Foreign Direct Investment (FDI) in
India – Reporting mechanism for transfer of equity shares/ fully and
mandatorily convertible preference shares/ fully and mandatorily convertible
In cases where the NR investor
including an NRI acquires shares on the stock exchanges, the investee company
would now have to file form FC-TRS with the AD Category-I bank.
DBOD.AML.BC.No.103/14.01.001/2013-14  09-May-14 RBI/2013-14/585
A.P. (DIR Series) Circular No.129 – External Commercial Borrowings (ECB)
Policy – Refinance / Repayment of Rupee loans raised from domestic banking
Eligible Indian companies will
now not be permitted to raise ECB from overseas branches / subsidiaries of
Indian banks for the purpose of refinance / repayment of the Rupee loans
raised from the domestic banking system in respect of the following:
a. Scheme of take-out financing.
b. Repayment of existing Rupee loans for companies in infrastructure
c. Spectrum allocation
d. Repayment of Rupee loans.
(PD) CC.No.373/03.10.001/2013-14
13-May-14 RBI/2013-14/590
DPSS.CO.PD.No. 2366/02.14.006/2013-14 – Issuance and Operation of Pre-paid
Payment Instruments in India – Consolidated Revised Policy Guidelines
Banks have been granted general
permission to issue rupee denominated co-branded prepaid instruments
16-May-14 RBI/2013-14/594
A.P. (DIR Series) Circular No.130 – External Commercial Borrowings (ECB)
from Foreign Equity Holder – Simplification of Procedure
 As a measure of simplification of the
existing procedure, it has been decided to delegate powers to AD banks to
approve the following cases under the automatic route:
(a) Proposals for raising ECB by companies belonging to manufacturing,
infrastructure, hotels, hospitals and software sectors from indirect equity
holders and group companies.
(b) Proposals for raising ECB for companies in miscellaneous services from
direct / indirect equity holders and group companies. Miscellaneous services
mean companies engaged in training activities (but not educational
institutes), research and development activities and companies supporting
infrastructure sector. Companies doing trading business, companies providing
logistics services, financial services and consultancy services are, however,
not covered under the facility.
(c) Proposals for raising ECB by companies belonging to manufacturing,
infrastructure, hotels, hospitals and software sectors for general corporate
purpose.ECB for general corporate purpose (which includes working capital
financing) is, however, permitted only from direct equity holder.
(d) Proposals involving change of lender when the ECB is from FEH – direct
/ indirect equity holders and group company.
19-May-14 RBI/2013-14/595 A.P. (DIR
Series) Circular No.131 – Overseas Direct Investments – Limited Liability
Partnership (LLP) as Indian Party
An LLP can now undertake
financial commitment to / on behalf of a JV / WOS abroad in terms of the
extant ODI Regulations
21-May-14 Notification No. FEMA
303/2014-RB – Foreign Exchange Management (Foreign Exchange Derivative
Contracts) (Amendment) Regulations, 2014
A person resident outside India
who is eligible to invest in securities as laid down in Schedules 2, 5, 7 and
8 of Foreign Exchange Management (Transfer or Issue of Security by a person
resident outside India) Regulations, 2000 may 
also enter into currency futures or exchange traded currency options
contracts on a stock exchange recognised under section 4 of Securities
Contracts (Regulations) Act, 1956 to hedge an exposure to risk, subject to
such terms and conditions as may be prescribed.
22-May-14 Notification No.FEMA.
304/2014-RB -Foreign Exchange Management (Transfer or issue of Security by a
Person Resident outside India) (fifth Amendment) Regulations, 2014
A Non-resident Indian may,
without limit, purchase on non-repatriation basis, listed
non-convertible/redeemable preference shares or debentures issued in terms of
Regulation 7 (2) of these Regulations
22-May-14 Notification No.
FEMA.305/2014-RB – Foreign Exchange Management (Transfer or Issue of Security
by a Person Resident Outside India) (Sixth Amendment) Regulations, 2014
Any person being a non-resident
investor of a company registered in India and listed on a recognised stock
exchange/s in India (resident investee company), may pledge the shares of
that company, in favour of a Non-Banking Financial Company in India, to secure
the credit facilities being extended to that resident investee company for
bonafide business purposes, subject to the AD bank satisfying itself of the
compliance of the conditions stipulated by the Reserve Bank, from time to
time, in this regard.
(DIR Series) Circular No.119
26-May-14 RBI/2013-14/606 DNBS (PD)
CC.No.376/03.10.001/2013-14 – Requirement for obtaining prior approval of RBI
in cases of acquisition/ transfer of control of NBFCs
Prior written permission of the
Reserve Bank of India shall be required for –
(i) any takeover or acquisition of control of an NBFC, whether by
acquisition of shares or otherwise;
(ii) any merger/amalgamation of an NBFC with another entity or any
merger/amalgamation of an entity with an NBFC that would give the acquirer /
another entity control of the NBFC;
(iii) any merger/amalgamation of an NBFC with another entity or any
merger/amalgamation of an entity with an NBFC which would result in
acquisition/transfer of shareholding in excess of 10 percent of the paid up
capital of the NBFC.
(iv) Prior written approval of the Reserve Bank would also be required
before approaching the Court or Tribunal under Section 391-394 of the Companies
Act, 1956 or Section 230-233 of Companies Act, 2013 seeking order for mergers
or amalgamations with other companies or NBFCs.

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