Issue of shares under FDI must occur within prescribed period or advance refunded; banks must verify bonafides. Companies receiving inward remittances as consideration for equity instruments must issue those instruments within the prescribed period, failing which the consideration must be refunded immediately to the non-resident investor by outward remittance or credit to the investor's NRE/FCNR(B) account. AD Category I banks may allow refunds after verifying bonafides and absence of interest on advances. Banks may seek Reserve Bank approval for refunds outstanding beyond the prescribed period, and companies with prior delayed cases must submit an action plan through their AD bank for specific approval. Advances are allowed only under the automatic route.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Issue of shares under FDI must occur within prescribed period or advance refunded; banks must verify bonafides.
Companies receiving inward remittances as consideration for equity instruments must issue those instruments within the prescribed period, failing which the consideration must be refunded immediately to the non-resident investor by outward remittance or credit to the investor's NRE/FCNR(B) account. AD Category I banks may allow refunds after verifying bonafides and absence of interest on advances. Banks may seek Reserve Bank approval for refunds outstanding beyond the prescribed period, and companies with prior delayed cases must submit an action plan through their AD bank for specific approval. Advances are allowed only under the automatic route.
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