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.

FPI investment limits increased for central and state government securities in two tranches; SEBI to issue guidelines.
Investment limits for FPIs in Central Government Securities and State Development Loans are increased in two scheduled tranches, raising aggregate caps for All FPIs and providing additional allocation for Long Term FPIs. Existing conditions continue: security-wise limits remain, coupons may be invested outside the limits, and investments are restricted to securities with a minimum residual maturity of three years. SEBI will issue operational allocation and monitoring guidelines; separate communication will address transfer of unutilised Long Term FPI allocation. Directions are issued under the Foreign Exchange Management Act without prejudice to other approvals.

Government-supported line of credit: exporters must source majority of contract goods from India and comply with EDF/SDF declarations.
The Line of Credit finances renovation of a foreign power plant and mandates that at least 75% of the contract price for eligible goods, machinery, equipment and services (including consultancy) be supplied from India, with up to 25% procurable from outside India. Shipments must be declared on EDF/SDF forms per Reserve Bank instructions. Agency commission is not payable under the LOC, though exporters may remit commission from their own resources or Exchange Earners' Foreign Currency accounts after full realisation, subject to prevailing rules. Directions are issued under FEMA without prejudice to other legal permissions.

Line of Credit terms impose sourcing and compliance obligations for exporters and authorised banks under FEMA directives.
Government-supported Line of Credit amended to reduce the facility finances eligible exports of goods, machinery, equipment and consultancy services under the Indian Foreign Trade Policy, requiring a substantial share of supplies to originate from India and setting specific terminal utilization periods for project and other supply contracts. Shipments must be declared on EDF/SDF forms. No agency commission is payable under the LOC, though exporters may pay commission from their own resources or Exchange Earners' Foreign Currency accounts after realisation, subject to prevailing instructions and Authorised Dealer Category-I bank oversight. Directions issued under FEMA.

Foreign exchange derivative rules set user classification, hedging limits, settlement rules and reporting duties across OTC and exchange-traded markets.
Foreign exchange derivative and inter-bank dealing directions under FEMA establish the framework for authorised persons, authorised dealer banks, standalone primary dealers, recognised stock exchanges and recognised clearing corporations in OTC and exchange traded currency markets. The directions define key concepts, classify users as retail or non-retail, and prescribe product permissions, hedging restrictions, settlement rules, limits on leveraged structures, and conditions for INR-linked and non-INR-linked contracts. They also set open position, gap, borrowing, reporting and trade repository requirements, together with separate rules for asset-liability hedging, gold hedging, capital hedging and inter-bank foreign exchange dealings.

Discontinuation of reporting requirement: authorised dealer banks need not submit invocation reports for service-import bank guarantees but must retain records.
Authorised Dealer Category-I banks are directed to discontinue submitting reports of invocation of bank guarantees issued for service imports; they must, however, maintain records of such invocations and furnish details to the Reserve Bank when requested. The Master Direction on reporting under the Foreign Exchange Management Act will be updated to reflect this change, and the circular is issued under Sections 10(4) and 11(1) of the Act.

Suspension of ACU Euro operations permits Euro trade settlements outside ACU until further notice under FEMA directions.
The circular temporarily suspends ACU Euro operations while the Euro payment channel is reviewed; accordingly, eligible current account and trade transactions in Euro may be settled outside the ACU mechanism until further notice. Authorised Dealer Category I Banks must notify constituents. The direction is issued under FEMA and is without prejudice to other statutory permissions.