Delegated bank powers: AD banks may regularise direct dispatch, write offs and set offs of export receivables under conditions.
AD Category I banks are authorised to regularise direct dispatch of shipping documents irrespective of shipment value if export proceeds are realised, the exporter is a regular customer for at least six months, KYC/AML compliance is met and the bank is satisfied of bonafides. A revised write off regime sets cumulative ceilings for self write off and bank write off subject to aged outstanding, documentary proof of recovery efforts, specified hardship categories (with unlimited write off on evidence), reporting in EDPMS and audit checks. Set off of export receivables against import payables is permitted under supervised arrangements with enforceable agreements and strict compliance and reporting conditions. Refunds of export proceeds permitted with due diligence and evidence, including waiver of re import where goods were auctioned or destroyed.

Foreign law firms' practice restriction bars establishment of offices in India under FEMA and mandates bank reporting of violations.
Foreign law firms, foreign lawyers and foreign companies are not permitted to practice law in India and therefore shall not establish branch offices, liaison offices, project offices or other places of business in India for the purpose of practicing law; Authorized Dealer Category I banks must not grant FEMA approvals for such establishments and must report violations of the Advocates Act to the Reserve Bank, while other BO/LO/PO policy provisions remain unchanged and the Master Direction has been updated accordingly.

Compounding of FEMA contraventions: delegation to regional offices with updated classification and disclosure under the Master Direction.
Compounding powers under FEMA have been delegated to the Reserve Bank's Regional Offices/Sub Offices to compound specified contraventions under the FEM (Non Debt Instruments) Rules, 2019 and FEM (Mode of Payment and Reporting of Non Debt Instruments) Regulations, 2019, covering issuance of shares without approvals, receipt of investment, and specified reporting/payment obligations. The Reserve Bank has discontinued the separate 'technical' classification and will regularise such contraventions by imposing minimal compounding amounts per the Master Direction. For compounding orders on or after the stated date, only summary information (applicant name, provisions compounded, date of order and compounding amount) shall be published on the Bank's website.

Discontinuation of FEMA returns: specified reports withdrawn with immediate effect, Master Direction to be updated.
The Reserve Bank of India has withdrawn a specified set of returns and reports under the Master Direction - Reporting under FEMA with immediate effect to reduce compliance burden; the Master Direction will be updated accordingly and authorised dealers should inform their constituents. The circular is issued under Section 10(4) and Section 11(2) of the Foreign Exchange Management Act, 1999, without prejudice to other statutory permissions, and the Annexure lists the discontinued reports by reporting entity and frequency, noting that hardcopy DRR filing alone is discontinued.

Line of Credit for reconstruction requires majority India sourced exports with EDF reporting and limited commission payment.
Exim Bank's Government of India supported Line of Credit for reconstruction finances exports of eligible goods and services from India, requiring at least 75 per cent of contract value be supplied from India and allowing up to 25 per cent procurement from outside. The LoC is effective from September 15, 2020 with a terminal utilization period of sixty months after scheduled completion. Shipments must be declared in the Export Declaration Form. No agency commission is payable under the LoC, though exporters may pay from own resources or EEFC balances after realization and subject to extant instructions; AD Category I banks must notify exporters and facilitate compliant remittances.

Foreign Direct Investment policy: sectoral caps and automatic or government routes set entry, conditionalities and reporting obligations.
The Circular consolidates FDI policy and defines eligible investors, investee entities and instruments; prescribes two entry routes-automatic and government-with sectoral caps, conditionalities and prohibited activities; governs issuance, transfer and conversion of capital instruments with pricing and reporting rules; sets rules for downstream and indirect foreign investment and requires notification to RBI and compliance with FEMA/RBI/SEBI requirements; and establishes procedural governance, competent authorities and monitoring mechanisms for approvals and compliance.

Designated FCRA Account requirement: foreign contributions must be received only in the specified SBI New Delhi branch, with permitted transfers.
Every person or entity granted registration or prior permission under the FCRA must receive foreign contribution only into a designated "FCRA Account" opened at the specified State Bank of India New Delhi Main Branch (NDMB); no funds other than foreign contribution shall be received in that account. Existing account holders must transition to the NDMB designated account within the prescribed period, fresh applicants must open the NDMB designated account prior to receiving foreign contribution if later granted permission, and banks must report prescribed remittance particulars under Section 17(2).

Caution-listing of exporters now requires AD bank recommendations to central bank regional offices when exporters face enforcement notices.
An exporter may be caution-listed by the Reserve Bank on recommendation of the AD bank to the Foreign Exchange Department Regional Office when the exporter has come to the adverse notice of enforcement agencies or is not traceable or is not making sincere efforts to realise export proceeds; AD banks also recommend de-caution-listing and the procedural treatment of shipping documents for caution-listed exporters remains unchanged.

Line of Credit supporting export-financed power project requires majority Indian sourcing and EDF declaration compliance.
Exim Bank's Government of India-supported Line of Credit to Zimbabwe finances repowering of Hwange Thermal Power Station and permits financing of eligible exports from India consistent with the Foreign Trade Policy. At least 75 per cent of contract value must be supplied from India; up to 25 per cent may be procured abroad. Shipments must be declared in the Export Declaration Form. No agency commission is payable under the LoC, though exporters may use their own funds or EEFC balances for commission remittance after realization, subject to extant instructions; AD Category I banks must notify exporters and facilitate compliance. Directions are issued under FEMA.

Foreign investment cap in defence raised under automatic route; government approval required beyond higher threshold, with security review.
The policy raises the automatic-route foreign equity ceiling for the defence industry and retains government approval beyond the new ceiling where access to modern technology or other specified reasons exist. Licence applications remain subject to inter-ministerial consultation; foreign investment requires security clearance and may be reviewed on national security grounds. Companies not holding an industrial licence must file a mandatory declaration with the Ministry of Defence within thirty days if foreign infusion alters ownership up to the lower threshold, while proposals to increase FDI beyond that lower threshold require government approval. Investee entities must ensure in country design, development, manufacturing, maintenance and life cycle support capabilities.

Government-supported Line of Credit enables financing of eligible Indian exports to Malawi subject to sourcing and documentary conditions.
Government-supported Line of Credit to Malawi authorises Exim Bank financing of eligible Indian exports for drinking water and development projects, subject to Foreign Trade Policy eligibility and Exim Bank approval. Contracts must source at least 75 per cent of goods, works and services from India, with up to 25 per cent procured abroad. The LoC is effective from September 2020 with a terminal utilization period of 60 months after scheduled project completion. Shipments must be declared in the Export Declaration Form. No agency commission is payable under the LoC, though exporters may use own funds or EEFC balances for commission remittance after realisation, subject to AD Category I bank rules. Directions are issued under FEMA.

Import payment timeframe extension: remittance period for normal imports extended due to COVID disruptions, banks must notify constituents.
Remittance completion period for normal imports has been extended from six months to twelve months from shipment date for imports made on or before July 31, 2020 due to COVID 19 disruptions; exclusions include import of gold/diamonds/precious stones/jewellery and cases where amounts are withheld as guarantees. Authorised Dealer Category I banks must notify constituents. Directions are issued under the Foreign Exchange Management framework and without prejudice to other legal permissions or approvals.

Voluntary Retention Route extension - FPIs granted additional time to meet committed investment threshold and reset retention period.
FPIs allotted VRR investment limits in the noted reopening period are granted an additional three months to invest 75% of their Committed Portfolio Size. Where this extension is used, the retention period for the investments committed at allotment is reset to begin from the date the FPI invests 75% of CPS. The instruction follows prior VRR directions and is issued under the foreign exchange statute, without prejudice to other required permissions.

Hedging of foreign exchange risk: implementation deferred; offshore non deliverable rupee directions remain effective as previously scheduled.
Directions on hedging of foreign exchange risk originally to come into effect on June 1, 2020 are deferred and will now be effective from September 1, 2020; Directions on banks' participation in offshore non deliverable rupee derivative markets remain effective from June 1, 2020. The Circular is issued under the statutory foreign exchange framework and preserves any permissions required under other laws, addressed to Authorised Dealers Category I.

Foreign investment from neighbouring-border countries now subject to government approval to curb opportunistic takeovers during pandemic period.
The FDI policy amendment requires that investments by entities of countries sharing a land border with India, or where the beneficial owner is situated in or is a citizen of such a country, be routed only through the Government route; the Pakistan-specific Government route restriction remains except for certain prohibited sectors. Additionally, any transfer of existing or future FDI that causes beneficial ownership to fall within this restriction will likewise require Government approval. The change is effective from the date of the relevant foreign exchange notification.

FPI investment limits in government securities maintain prescribed levels; equal allocation between general and long term categories and FAR applies.
Revision of FPI investment parameters under the Medium Term Framework confirms that overall FPI limits for government securities and SDLs remain at prescribed percentages; all eligible investments and existing holdings in specified securities are to be under the Fully Accessible Route, with outstanding stock calculations and utilisation adjusted. Incremental change in government securities limits is split equally between General and Long term subcategories, while the entire SDL increase is allocated to the General subcategory, and revised absolute caps for subcategories and aggregate debt limits are set for two half year periods.

Hedging of foreign exchange risk: revised RBI directions permitting specified derivative contracts and user classifications for authorised dealers.
Regulatory directions revise the hedging framework under FEMA by defining key terms, prescribing that Authorised Dealers classify users as retail or non-retail and offer derivative products accordingly, and by requiring hedges to correspond to contracted or anticipated exposures. ADs must ensure notional and tenor align with exposures, permit cancellations/rebookings with specified treatment of net gains on anticipated exposures, apply suitability and appropriateness policies, and, for large exchange positions, coordinate with exchanges and designated ADs/custodians while users remain liable for compliance.

Rupee Drawing Arrangement permits remittances to PM-CARES Fund with direct credit and remitter details maintained.
Permission is granted under the Rupee Drawing Arrangement to receive foreign inward remittances via non-resident exchange houses in favour of the PM-CARES Fund; Authorised Dealer Category I banks must directly credit remittances to the Fund and maintain full remitter details, and the Master Direction on non-resident exchange house vostro accounts will be updated accordingly.

Export proceeds realisation timeframe extended to address pandemic-related delays in repatriation of export value policy
The Reserve Bank of India, in consultation with the Government of India, extended the period for realisation and repatriation to India of the full export value of goods, software or services exported for exports made up to or on July 31, 2020, increasing the prescribed timeline to accommodate pandemic-related delays; provisions for exports to warehouses outside India remain unchanged and the directions were issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.

Line of Credit to finance eligible exports with Indian content requirement and FEMA compliance obligations for exporters.
Exim Bank's Government of India supported Line of Credit to Burundi finances export of eligible goods and services for specified construction projects, subject to Foreign Trade Policy and LoC terms. At least 75% of contract value must be supplied from India, with up to 25% procurable abroad. The LoC is effective from March 18, 2020, with a terminal utilization period of 60 months after scheduled completion. Shipments must be declared in the Export Declaration Form; no agency commission is payable though exporters may use own funds or EEFC balances for commission subject to AD Category I bank rules and FEMA compliance.