Payment by cheque requirement: associations must use non-cash modes for large foreign contribution disbursements to ensure compliance.
Associations registered or granted prior permission under the Foreign Contribution (Regulation) Act, 2010 are advised that items of expenditure or payments amounting to Rs. 20,000/- or more should be made by account payee cheque or demand draft from FC designated bank accounts and Utilisation Accounts, and that cash payments of that magnitude are likely to attract more intensive governmental scrutiny of records and accounts.

Industrial licence validity extension and deregulation of defence capacity enable streamlined sales to government entities with limited approvals.
Press Note streamlines defence industrial licensing by permitting extensions of the initial three year licence through two successive two year extensions, removing the stipulation of annual production capacity while imposing half yearly production returns to the Department of Industrial Policy & Promotion and the Department of Defence Production, and allowing sales without prior Defence Production approval to entities under the Ministry of Home Affairs, state governments, public sector undertakings and other valid defence licensed companies, with prior permission required for other buyers.

Delegation of compounding powers expanded so regional and New Delhi offices may compound specified FEMA contraventions.
Delegation of compounding authority under the Foreign Exchange Management Act, 1999 and the Compounding Rules, 2000 is extended so Regional Offices (except Kochi and Panaji) may compound delays in submission of Form FC TRS and taking on record transfers without certified FC TRS without limit; Kochi and Panaji may compound such contraventions below a specified monetary threshold while higher value matters and all other FEMA contraventions remain with CEFA, Mumbai. FED, CO Cell, New Delhi officers are authorised to compound contraventions relating to immovable property acquisitions/transfers, establishment of branch/liaison/project offices, and deposit regulations, with applications to be filed to the appropriate office by territorial jurisdiction.

Permissible remittances through exchange houses now include remittances to national relief fund subject to direct bank credit and remitter details.
The circular revises the list of permissible transactions under Drawing Arrangements with Exchange Houses to add payments to utility providers, tax payments, EMI repayments to banks and NBFCs, and remittances to the Prime Minister's National Relief Fund (subject to direct credit by banks and maintenance of remitter details). It reiterates that exchange houses are for inward personal remittances, prohibits routing donations to charities, amends the trade transaction ceiling, preserves other listed personal and investment payments, and directs AD Category I banks to notify constituents while remaining subject to FEMA Sections 10(4) and 11(1).

Hedging under past performance: importers can book forward contracts up to full eligible limit under FEMA route.
Importers may book forward contracts under the past performance route up to 100% of the eligible limit, computed as the higher of the three year average import turnover or the previous year's actual import turnover; importers who booked up to the prior 50% ceiling may avail the additional difference, and all existing operational guidelines, terms and conditions apply mutatis mutandis.

Line of Credit to foreign government sets export eligibility and sourcing conditions for financed infrastructure procurement.
A Line of Credit of USD 52 million from Exim Bank to the Government of Togo finances procurement of goods, machinery, equipment and services (including consultancy) from India for a 161 kV transmission project. At least 75 per cent of contract value must be supplied from India; up to 25 per cent may be procured abroad. The Credit Agreement is effective from September 16, 2014; LC opening and disbursement deadlines are 48 months from scheduled completion for project exports and 72 months from execution for supply contracts. Shipments must be declared on GR/SDF forms; no agency commission under the LOC, though exporters may use own funds or EEFC balances subject to AD bank compliance under FEMA.

Line of credit conditions require majority Indian-sourced supplies and set disbursement timelines, governed under FEMA directions.
Exim Bank provided a Line of Credit of USD 30 million to finance a rural electrification project in Togo, requiring at least 75 per cent of contract value to be supplied from India and permitting up to 25 per cent procurement from outside India. The Credit Agreement is effective from August 21, 2014 and sets the last dates for opening Letters of Credit and disbursement by reference to contract completion or 72 months from execution for supply contracts. Shipments under the LOC must be declared on GR/SDF forms. No agency commission is payable under the LOC, though exporters may remit commission from their own funds or EEFC balances subject to realization and instructions. AD Category I banks must notify exporters and may obtain details from Exim Bank; directions issued under FEMA.

FDI automatic route: equity issuances against permissible payables allowed, subject to sectoral caps, pricing rules and tax compliance.
Equity shares may be issued under the FDI automatic route against any funds payable whose remittance does not require prior FEMA permission, provided issuance complies with existing sectoral caps and pricing guidelines and conversion to equity is net of applicable taxes; funds requiring Government/RBI approval, import dues deemed as ECB, trade credit or payables for second hand machinery remain excluded and subject to extant rules.

XBRL reporting requirement mandates authorised dealer banks to submit gold import statements electronically, replacing manual filings.
Authorised Dealer Category I banks must transition import of gold statement submissions to the XBRL system beginning with the half year end in September 2014. Banks must obtain portal access credentials by submitting the prescribed form by the stated deadline; for the transition period they must file both XBRL soft copies and manual MS Excel statements, after which manual monthly and half yearly filings are dispensed with. These directions are issued under the statutory scheme and do not affect other permissions or approvals under applicable law.

Special Currency Basket valuation revised under deferred payment protocols; authorised banks must apply the notified rupee value and notify constituents.
The Reserve Bank revises the rupee valuation of the Special Currency Basket under the Deferred Payment Protocols and directs Authorised Dealer Category I banks to apply the newly notified rupee value from the operative date and to inform their constituents; the directions are issued under FEMA and without prejudice to other legal permissions.

Hedging facilities for FPIs expanded to permit coupon-receipt hedging for debt investments, subject to rebooking restrictions.
FPIs may hedge currency risk on the market value of their entire Indian equity and debt investments through AD Category I banks, and may hedge coupon receipts on debt securities due within the next twelve months, subject to a prohibition on rebooking cancelled hedge contracts while permitting rollovers on maturity if the coupon remains unpaid.

Line of Credit terms require 75% Indian sourcing and specified disbursement timelines for financed exports to Mauritius.
Exim Bank's Line of Credit finances eligible goods, machinery, equipment and services (including consultancy) from India for Mauritius' acquisition of Waterjet Fast Attack Craft; at least 75% of contract value must be supplied from India and up to 25% may be procured outside India. The Credit Agreement (executed May 5, 2014; effective July 28, 2014) sets disbursement/LC opening deadlines-48 months from scheduled completion for project exports and 72 months from execution for supply contracts-and requires GR/SDF declaration of shipments. No agency commission is payable under the LOC; exporters may use own resources or EEFC balances for commission after realisation, subject to AD bank compliance. Directions issued under FEMA sections 10(4) and 11(1).

Line of credit conditions: India-sourced content requirement enforced for export financing, with shipment declarations and commission rules.
A Line of Credit was made available to finance eligible goods, machinery, equipment and consultancy services for agriculture and irrigation development, requiring at least 75 percent of contract value to be supplied from India and up to 25 percent to be procured outside India. The Credit Agreement prescribes distinct LC and disbursement timelines for project and other supply contracts. Shipments must be declared on GR/SDF forms. No agency commission is payable under the LOC; exporters may use own funds or Exchange Earners' Foreign Currency balances for commission payments after realization, subject to prevailing remittance rules.

External commercial borrowings in Indian rupees permitted via rupee swaps with authorised dealer banks, subject to route and cost conditions.
Recognised non resident lenders may extend external commercial borrowings in Indian rupees provided the lender mobilises rupees through swaps with an Authorised Dealer Category I bank; the ECB contract complies with conditions applicable to the automatic or approval routes; and the all in cost is commensurate with prevailing market conditions. Hedging arrangements for rupee ECBs from non resident equity holders continue to be governed by existing provisions. Lenders may set up representative offices in India to execute such swaps.

Line of Credit terms: Exim Bank's export finance to Congo mandates 75% Indian supply, timelines and GR/SDF compliance.
Exim Bank extended a Line of Credit of USD 89.90 million to the Government of the Republic of Congo for financing eligible Indian goods, machinery, equipment and services for transportation development; at least 75% of each contract's value must be supplied from India with up to 25% procureable abroad. The Credit Agreement (executed March 9, 2014; effective August 8, 2014) sets disbursement deadlines-48 months from project completion for project exports and 72 months from execution for other supplies-and requires shipments to be declared on GR/SDF Forms; agency commission is not payable under the LOC except from exporter's own or EEFC funds subject to compliance.

Foreign exchange reporting: divisions relocated; AD Category I banks must submit monthly and transaction reports to FED CO Cell New Delhi
Three divisions of the Foreign Investment Division have been relocated to the FED CO Cell, New Delhi; AD Category I banks must send all related cases and the monthly NRO remittance statements and reports on extension or closure of liaison/branch/project offices to the FED CO Cell address, while NRFAD email reporting remains unchanged.

Foreign investment in government securities: eligible foreign investors may acquire securities in any manner consistent with market practice.
Eligible non-resident investors including FIIs, QFIs, RFPIs and registered long-term investors may acquire eligible government securities in any manner consistent with prevailing market practice, following removal of the stipulation on manner of acquisition from the Principal Regulations; AD Category-I banks must inform their constituents, and the change follows the Eleventh Amendment Regulations, 2014 issued under the Foreign Exchange Management Act.

FDI in rail infrastructure permitted with automatic entry, subject to ministry sectoral guidelines and security clearance for higher equity.
Private and foreign investment is permitted by automatic entry in specified railway infrastructure activities - including suburban corridor PPPs, high speed trains, dedicated freight lines, rolling stock manufacturing and maintenance, electrification, signalling, freight and passenger terminals, industrial-park railway line/sidings and Mass Rapid Transport Systems - subject to Ministry of Railways sectoral guidelines and security clearance for proposals exceeding the capped equity threshold in sensitive areas.

Refinancing under automatic route permitted when fresh ECB lowers all-in-cost and meets specified compliance conditions.
AD Category - I banks are authorized to approve refinancing of existing External Commercial Borrowings under the automatic route where the fresh ECB's Average Maturity Period exceeds the residual maturity of the original loan, subject to conditions: both loans comply with guidelines; fresh ECB has lower all-in-cost; existing lender's consent; refinancing before original maturity; borrower not on RBI default/caution list or under DoE investigation; overseas branches/subsidiaries of Indian banks not permitted to extend refinancing; and requisite reporting (e.g., revised Form 83) is completed.

FDI cap in defence sector revised to allow higher foreign participation subject to Indian ownership, management and specialised approvals.
Amendment raises the Foreign Direct Investment cap in defence subject to industrial licence to 49% under the Government route, with proposals above that level considered by the Cabinet Committee on Security where they may afford access to modern technology. The 49% limit is composite across all foreign investment categories; portfolio investments by FPIs/FIIs/QFIs together with FVCIs are capped at a combined 24% under the automatic route. Up to 49% the investee must be Indian owned and controlled, have Indian management and a resident Chief Security Officer; applications are processed by DIPP in consultation with Defence and filed with the FIPB Secretariat.