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The Reserve Bank of India (RBI) brought out a notification related to Discontinuation of Reports and Discontinuation of Returns under the Foreign Exchange Management Act, 1999 (FEMA). This notification was brought out on 13 November 2020 through RBI/2020-21/66 A.P. (DIR Series) Circular No. 05.
To improve the amount of foreign exchange in the country the RBI carried out this measure. Other reasons would include to increase the ease of doing business in the country and to reduce the amount of compliances related to reporting. Under this notification discontinuation of reports were carried out for 17 transactions.
The notification on discontinuation of reports under Foreign Exchange Management Act would lead to changes in the Master Direction (MD) on reporting under FEMA which was brought out in January 2016.
Apart from this, it will improve the progress of carrying out businesses in India. Limited number of compliances would be required to be followed due to this notification. Such directions for discontinuation of reports are provided under Section 10(4) and 11(2) of the Foreign Exchange Management Act, 1999. This notification is issued with immediate effect to all authorised banks and authorised dealers.
The following list provides reporting which is discontinued:
|SL No||Reporting Requirement||Entity for Reporting||Time and Frequency of Reporting|
|1.||Any Transaction of value more than USD 5000. The above transaction would happen as per the category.||Authorised dealer Category-II||On a monthly basis|
|2.||Any Transaction of value more than USD 25,000. The above transaction would happen as per the category.||Authorised dealer Category-II||Every month|
|3.||Purchases of Transactions of More than USD 10,000||Fully Fledged Money Changers and Authorised dealer Category-II||On a monthly basis|
|4.||Liaison Office extension||Authorised dealer Category-I||At the time when extension is granted|
|5.||Project Office extension||Authorised dealer Category-I||At the time when extension is granted|
|6.||FII and FPI any form of inflow on daily basis||Authorised banks||Daily Compliance|
|7.||FII and FPI monthly inflow||Authorised dealer Category-I||Monthly Compliance|
|8.||Foreign Venture Capitalists Reporting (FVCI) and Market Value of these investments||Authorised dealer Category-I (banks) and custodian banks||Monthly|
|9.||Outflow and Inflow based on mutual fund of AMC (Asset Management Companies)||AMC||Quarterly Compliance|
|10.||Market Value (MV)of FII on fortnightly basis||Authorised dealer Category-I||Fortnightly Compliance|
|11||Market Value (MV)of FII every month||Authorised dealer Category-I||Monthly Compliance|
|12||Percentage of floating stock of FII holdings||Authorised dealer Category-I||Monthly Compliance|
|13||Form DRR( Issue of Depository Receipts) Sponsored and unsponsored||Custodian Banks||When the Depository Receipts are transferred|
|14||ADR and GDR movement (American Depository Receipts and Global Depository Receipts)||Authorised dealer Category-I||Monthly Compliance|
|15||Repatriation of proceeds of sale of ADR/GDR and FCCB||Custodian Banks||Monthly|
|16||Underlying shares of ADR and GDR- which are re-deposited and released monthly||Custodian Banks||Monthly|
|17||Divestment of OCB (Overseas Corporate Bodies)||Authorised Dealers||Monthly|
With a view to increase the ease of doing business in the country, the RBI took this step of discontinuation of reports under FEMA.
Read our article:FEMA Contravention and Penalties