Foreign Portfolio Investor access to non-convertible debentures permitted; direct transactions allowed under FEMA regulatory framework.
Eligible overseas investors may acquire non-convertible debentures/bonds either directly or in accordance with prevailing market practice on a repatriation basis, subject to existing regulatory terms and any specifications issued by the financial regulator and securities regulator. Category I authorised dealers must inform constituents, and the directions are issued under the foreign exchange statute without prejudice to other required permissions.

Exchange facility for foreign citizens extended; authorised persons to continue limited weekly currency exchanges under FEMA directions.
Authorization permitting foreign citizens to convert foreign currency into Indian currency notes for limited weekly amounts is extended through December 31, 2016; Authorized Persons may continue exchanges within the previously prescribed weekly ceiling and must inform their constituents. The directions are issued under statutory powers and are stated to be without prejudice to other permissions or approvals required under any other law.

Line of Credit requirements mandate 75% India-sourced supply and specified LC/disbursement timelines under FEMA directions.
A Government of India supported Line of Credit to the Republic of Guinea finances hospital projects and mandates at least 75% of contract value be supplied from India with up to 25% import content. The LOC prescribes separate timelines for opening Letters of Credit and disbursement for project export and supply contracts, requires EDF/SDF shipment declarations, disallows agency commission under the LOC while permitting exporter-funded commissions under prevailing remittance rules, and directs AD Category-I banks to notify exporters; the directions are issued under FEMA provisions.

Exchange facility for foreign citizens: limited weekly conversion to Indian currency with passport and self-declaration requirements.
Foreign passport holders may exchange foreign currency for Indian currency notes up to a prescribed weekly cap subject to submission of a self-declaration that the facility has not been used that week; the Authorized Person must record passport details, retain the declaration, ensure the weekly cap is not exceeded, and inform constituents. Existing instructions on issuance of prepaid instruments by Authorised Dealer Category I banks continue; directions are issued under FEMA and do not affect other statutory permissions.

FPI corporate debt investment expanded to include unlisted bonds and securitised instruments subject to maturity and end use limits.
FPIs may invest in unlisted non convertible corporate debentures/bonds subject to a minimum three year residual maturity and end use restrictions prohibiting real estate business, capital market activities and land purchase, with custodians ensuring compliance. FPIs may also invest in securitised debt instruments issued by SPVs (originated by banks, FIs or NBFCs) or listed under securitised debt listing regulations; securitised instruments are not subject to the three year maturity requirement. These investments are subject to an aggregate cap within existing corporate bond limits and existing FPI debt market conditions remain applicable.

Foreign exchange insurance rules allow IRDAI permitted policies, set premium and claim currency rules, and govern reinsurance and overseas funds.
The 2015 Regulations permit IRDAI authorised general/health insurance policies to be placed in foreign exchange without RBI permission and establish currency specific rules for premium payment and claim settlement tied to the payer's and beneficiary's residency and currency of premium. They prescribe documentary and procedural conditions for foreign currency remittances for claims, govern reinsurance arrangements and premium remittances subject to insurer board approvals and IRDAI guidelines, allow insurers to maintain limited foreign currency accounts abroad, and permit insurers' investments abroad and specified utilisation of overseas funds in accordance with host country and IRDAI requirements.

Pre-paid instruments permitted for foreign tourists in exchange for foreign exchange, with passport accepted as identity verification.
Authorised Persons may issue Pre-paid instruments to foreign tourists in exchange for foreign exchange tendered, with passport accepted as valid identification, to facilitate exchange transactions following withdrawal of certain banknotes; instructions are issued under the Foreign Exchange Management Act and do not override other statutory permissions.

Withdrawal of legal tender status for specified high-denomination banknotes, with limited airport and tourist exchange exceptions.
Withdrawal of legal tender status for existing and older series high-denomination banknotes is effective from midnight of November 8, 2016, with limited transitional exceptions permitting exchange at international airports and by foreign tourists for small-value holdings until November 11, 2016; Authorised Persons must implement and notify constituents, and the directions are issued under FEMA provisions without prejudice to other legal permissions.

ECB hedging requirement: borrowers must fully hedge principal and coupon from liability creation, with at least one-year tenor and rollover.
ECB borrowers must cover principal and coupon through financial hedges where mandated, with hedges starting when the liability is created and maintained to ensure continuous coverage. A minimum one-year tenor for hedges is required with periodic rollovers to avoid any unhedged exposure. Natural hedge is acceptable only to the extent of matching projected inflows in the same currency within the same accounting year, net of outflows; revenue-indexing arrangements do not qualify. Designated authorised dealer banks must verify compliance and update Master Direction procedures.

Rupee denominated bonds overseas now permitted for Indian banks as issuers for capital and long term infrastructure funding.
Indian banks may issue Rupee denominated bonds overseas within the foreign investment limit for corporate bonds, including Perpetual Debt Instruments qualifying as Additional Tier 1 capital, Tier 2 debt instruments, and long term rupee bonds for infrastructure and affordable housing. Such issuances must comply with Basel III capital regulations and the Reserve Bank's guidelines on long term bonds for infrastructure and affordable housing. Underwriting by overseas branches or subsidiaries of Indian banks is not permitted. The change treats Indian banks as eligible borrowers while other provisions remain unchanged.

External Commercial Borrowings by startups: permitted under ECB framework with eligibility, lender standards, permitted instruments, and an annual cap.
Startups recognised by the Central Government may raise ECBs with minimum average maturity of three years from recognised lenders resident in FATF or FATF-style regional body jurisdictions, excluding specified overseas Indian bank entities. Borrowings may be loans or certain preference shares, denominated in freely convertible currencies or INR (with INR mobilisation via AD Category-I banks), subject to an annual per-Startup cap, mutually agreed all-in-cost, permissible end-uses, conversion to equity under foreign investment rules, borrower-determined security subject to FDI norms, and hedging options for INR exposure; most ECB framework provisions apply except leverage and ECB-liability:equity ratios.

Special Currency Basket valuation revised; banks must apply the updated rupee conversion for deferred payment obligations.
Revision of the rupee valuation of the Special Currency Basket for settlement under the Deferred Payment Protocols is announced; Authorised Dealer Category I banks are notified to apply the revised valuation with effect from the circular's effective date. The Directions are issued under FEMA sections 10(4) and 11(1) and are without prejudice to other permissions or approvals, and banks must communicate the change to their constituents and implement the revised valuation for relevant deferred payment obligations.

Foreign direct investment liberalization for other financial services allows full foreign ownership via automatic or government routes with regulator conditions.
Foreign direct investment in Other Financial Services and NBFCs is permitted up to full ownership under the automatic route when activities are regulated by a financial sector regulator, subject to regulator- or government-imposed conditions including minimum capitalisation norms; unregulated or partly regulated activities may be allowed full foreign investment under the government approval route with conditions; statutory limits in specific Acts prevail; downstream investments remain subject to sectoral regulations and foreign exchange provisions.

Rupee Drawing Arrangement limit capped per transaction; authorised banks must ensure compliance under FEMA and regulatory guidance.
The circular caps permitted trade transactions under the Rupee Drawing Arrangement at fifteen lakh rupees per transaction, directs Authorised Dealer Category I banks to implement this ceiling while other related instructions remain unchanged, notes the amendment in the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016 with an update to Master Direction No.2, and issues the directions under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.

Foreign investment in Other Financial Services allowed on full automatic route with regulator-specified conditions; government route for unregulated activities.
Full foreign equity participation in Other Financial Services is permitted under the automatic route when activities are regulated by a financial sector regulator, subject to regulator- or government-specified conditionalities including minimum capitalisation norms; statutory limits govern activities specifically regulated by an Act. Unregulated or partly regulated financial services require government approval for foreign investment, and downstream investments must comply with sectoral regulations and the Principal Regulations.

FVCI registration allows direct investment in startups and specified sectors without prior Reserve Bank approval.
Registered FVCIs may invest without RBI approval in equity, equity-linked or debt instruments of unlisted Indian companies in specified priority sectors, in qualifying startups, and in units of SEBI-registered Venture Capital Funds or Category I AIFs; downstream investments by recipient funds must comply with Schedule 11 downstream investment provisions.

Composite foreign investment cap clarified to aggregate direct and indirect investments, with compliance duties on the investee company.
The circular mandates that the composite limit/cap on foreign investment be calculated as the aggregate of all direct and indirect foreign investments, with equity resulting from debt conversion counted within the cap and certain debt-like instruments excluded. It defines Total foreign investment as the sum of direct and indirect investments, assigns the compliance obligation to the investee company, permits portfolio investment up to a prescribed threshold without government approval provided no change of ownership leading to control by non-residents occurs, and allows permitted foreign investment routes in LLPs, automatic-route sectors, NRI non repatriation investments deemed domestic, and share-swap arrangements subject to specified valuation and sectoral conditions.

Foreign exchange receipts and payments: prescribed modes include ACU settlement, rupee and freely convertible currency for authorised dealers.
Authorised Dealer Category I banks must follow the Regulations prescribing permitted modes and currencies for foreign exchange receipts and payments: ACU settlement or freely convertible currency for ACU members with specific rules for Nepal, Bhutan, Myanmar and Iran; for other countries, receipt/payment in rupees from a foreign bank account or in any freely convertible currency; currency appropriate to shipment or destination for exports/imports as declared; and specified allowances for third party transactions, card receipts/payments, FCNR/NRE debits, Exchange House rupee receipts, and precious metal settlement where contracted.

Extension and conversion of external commercial borrowings allowed by authorised banks subject to lender consent and reporting.
Designated Authorised Dealer Category I banks are empowered to approve extensions of matured but unpaid External Commercial Borrowings and conversions of such borrowings into equity, provided there is no additional cost, lender consent is obtained, and reporting requirements are fulfilled; conversions must comply with existing conversion terms and, where the borrower has other banking credit, are subject to prudential restructuring guidelines and coordination or consent of other lenders.

Import data reporting: AD Category I banks must use IDPMS to report, match and settle import remittances and BoE records.
AD Category I banks must use the Import Data Processing and Monitoring System (IDPMS) to report and monitor import payment transactions, create Outward Remittance Messages for undocumented import payments, download or upload Bill of Entry data, and settle ORMs against BoEs using prescribed message formats; banks must follow up for evidence of import, record extensions and may record limited write offs or close BoEs for specific operational or quality related reasons subject to extant guidelines.