External Commercial Borrowings reporting requires simplified ECB return hedging disclosures; non-compliance constitutes FEMA contravention, effective month-end.
Simplifies Part E of the ECB 2 Return to record standard hedged and unhedged ECB exposures, requiring hedging details in Part E.1 and foreign exchange earnings/expenditure in Part E.2 to be reported in an additive format and for natural hedge reporting to follow prior circular provisions. The revised format is effective from the month-end June 2018 reporting cycle; AD Category I banks must inform constituents, and lapses in submission or timing of the ECB 2 Return or Form 83 reporting constitute contraventions of the Foreign Exchange Management Act.

Data sharing obligations require banks to comply immediately with customs information exchange rules under FEMA authority.
Authorised Dealer Category I banks must ensure immediate compliance with the data sharing provisions of Sections 108A and 108B of the Customs Act, 1962 and the rules notified by GSR 1512(E) (Notification No. 114/2017 Customs (N.T)), enabling information exchange with the Directorate of Revenue Intelligence; this direction is issued under FEMA section 10(4).

Foreign investment monitoring: depository-based reporting requires listed companies and banks to provide investor data to enforce sectoral caps.
A depository-based monitoring mechanism requires listed Indian companies to provide specified investor information to depositories so as to ensure compliance with sectoral and statutory foreign investment caps; failure to furnish the data will prevent receipt of foreign investment and constitute non-compliance with foreign exchange regulations. Authorised Dealer Category I banks must inform clients, submit NRI investor details to depositories in prescribed formats, and continue existing Reserve Bank reporting obligations.

FPI short term debt limits: short residual holdings capped and transition relief provided, with expanded monitoring measures.
FPIs may invest in treasury bills, G secs and SDLs; investments in any debt category with residual maturity below one year are limited to 20% of that FPI's total investment in that category at any point in time. The cap applies continuously, reckoning all securities with less than one year residual maturity at the time of measurement; FPIs exceeding the cap as of the transition date have six months to comply but must not add to the short residual portfolio during the transition. Corporate bonds are brought into the same short residual limit. Related FPIs aggregate investments for concentration limits and online monitoring of G sec limits will be implemented.

External Commercial Borrowings liberalisation introduces uniform all in cost ceiling, expanded eligible borrowers, and standardized negative end uses.
External Commercial Borrowings policy is reformed to set a uniform all-in-cost ceiling tied to prescribed benchmark rates, raise the liability to equity ratio to 7:1 for ECBs from direct foreign equity holders under the automatic route (with a small value exception), expand eligible borrowers to include regulated Housing Finance Companies and Port Trusts (with 100% hedging for Track I) and permit certain INR denominated ECBs for MRO and freight forwarding companies, and to replace track specific positive/negative lists with a single negative end use list including prohibitions on real estate investment (subject to specified exceptions), capital market and equity investments, certain corporate uses for Tracks I and III unless raised from equity holders or group companies with minimum five year maturity, and on lending for prohibited activities.

FPI investment limits revised: operational rules change including maturity requirements, concentration and issue exposure caps.
The circular revises operational rules for FPI debt investment: minimum residual maturities for G secs, SDLs and corporate bonds are relaxed subject to a cap on short term residual maturity exposure; the aggregate FPI cap in any Central Government security is increased; CCIL online monitoring replaces the auction allocation mechanism; concentration limits by FPI sub category are imposed with transitional relaxations for existing excess holdings; corporate bond issue wise and corporate exposure caps are specified; and investment in partly paid instruments is prohibited, effective immediately.

Liberalised Remittance Scheme monitoring: daily transaction reporting by authorised dealer banks required to ensure compliance and access across banks.
Liberalised Remittance Scheme monitoring requires AD Category I banks to upload daily, transaction wise LRS information at the close of business of the next working day, or a Nil report if no data exists, as a CSV file via the prescribed XBRL portal; the reports will be accessible to other ADs to improve monitoring and ensure adherence to LRS limits under the Foreign Exchange Management Act.

FPI investment limits increased, with coupon reinvestment counted within government securities limits and corporate bond cap unified.
FPIs' investment limits are revised: G-sec limits rise incrementally, SDL limits hold, corporate bonds receive a single consolidated cap, and part of SDL long-term allocation is transferred to G-secs. Coupon reinvestment will be included in G-sec utilization at periodic reset, with the existing coupon stock added one time to the 'General' sub-category limit; the coupon rule will later extend to other debt categories. Revised numeric ceilings for debt sub-categories and total debt are prescribed and take immediate effect under statutory directions.

Government-supported line of credit enables export financing with Indian sourcing and restricted commission payments.
Authorization is granted for a Government of India supported Line of Credit by Exim Bank to finance eligible exports of goods and services and consultancy for development projects, subject to Foreign Trade Policy eligibility and Export Declaration Form requirements. The LoC sets a terminal utilization period from project completion. Sourcing rules require at least seventy-five percent of contract value to be supplied from India, with reduced thresholds for civil construction and possible further reductions by Exim Bank where sourcing is not from a third country. No agency commission is payable under the LoC; commissions may be paid from exporter resources or Exchange Earners' Foreign Currency Account balances post-realization.

Discontinuance of LoUs and LoCs for trade credits; banks may still issue letters of credit and bank guarantees under regulatory rules.
Discontinue issuance of Letters of Undertaking and Letters of Comfort by Authorised Dealer Category I banks for trade credits for imports with immediate effect; Letters of Credit and Bank Guarantees for trade credits may continue only subject to compliance with existing banking regulations on guarantees and co acceptances. Banks must inform their constituents and the Master Direction will be updated to reflect the change.

Hedging of Commodity Price Risk permitted overseas using specified derivatives subject to bank safeguards and reporting requirements.
These Directions permit residents other than individuals to hedge commodity price risk and freight risk in overseas markets using permitted products (futures, forwards, vanilla options, swaps, and certain structured products), subject to bank verification of contracted or anticipated exposure, alignment of hedge quantity and tenor, board approved hedging policy, risk management capability, OTC counterparty jurisdictional acceptability, routing of payments through a special account, statutory auditor certification, corrective action reporting to the Reserve Bank, limited SBLC/guarantee use for margins, and quarterly reporting to the Reserve Bank.

Position limits in exchange-traded INR currency derivatives consolidated into a single limit without underlying exposure; breaches reportable.
RBI permits residents and Foreign Portfolio Investors to take long or short positions in exchange-traded INR currency derivatives without establishing underlying exposure up to a single consolidated limit of USD 100 million equivalent across all INR currency pairs and across all exchanges. Participants bear responsibility for compliance; exchanges will monitor limits and report breaches to the Reserve Bank. Other operational guidelines remain unchanged and the circular is issued under provisions of the Foreign Exchange Management Act, 1999.

Line of Credit requires majority Indian content, export declaration compliance and FEMA-based approvals for financing hospital upgrade contracts abroad.
Exim Bank's Government of India supported Line of Credit to Co te d'Ivoire finances upgrade of four military hospitals, permitting export of eligible Indian goods and services with at least 75% of contract value sourced from India and up to 25% from outside. The Agreement effective 15 December 2017 provides a terminal utilization period of 60 months after scheduled completion. Shipments must be declared on the Export Declaration Form; no agency commission is payable under the LoC though exporters may use own funds or EEFC balances for commission subject to AD Category I bank compliance checks. Directions issued under FEMA.

Line of Credit supports Kenyan agricultural mechanization; exports must be majority India sourced and comply with FEMA declaration and remittance rules.
Exim Bank's Government of India supported Line of Credit to Kenya finances exports of eligible goods and services for an agricultural mechanization project, requiring that a substantial majority of contract goods and services be supplied from India with a limited portion procured abroad. Shipments must be declared on the Export Declaration Form; agency commission is not payable under the LoC though exporters may pay commission from their own resources or Exchange Earners' Foreign Currency Account after realization. AD Category I banks must notify exporters, facilitate permitted remittances, and obtain full LoC details from Exim Bank. Directions issued under the Foreign Exchange Management Act remain subject to other legal permissions.

Foreign Direct Investment rules revised to liberalize sectoral entry routes, ownership limits, and compliance requirements.
Amendments revise FDI entry routes, ownership limits and compliance across sectors: joint audit requirement when an international-network auditor is specified; 100% automatic FDI for investing NBFCs, while CICs and other investing companies require Government approval and RBI CIC compliance; competent authority for applications from countries of concern assigned to DIPP for automatic-route security-clearance cases; civil aviation carrier foreign investment capped with effective control retained by Indian nationals; real-estate broking classified as non-real-estate business allowing 100% automatic FDI; 100% automatic FDI in single brand retail with brand, sourcing and transitional global-sourcing conditions; removal of certain power exchange restrictions; expanded medical device definition; and rules for equity issuance against imports and pre operative expenses with specified documentation and reporting.

Refinancing of external commercial borrowings: overseas bank branches may refinance eligible corporates and PSUs subject to specified conditions.
Overseas branches and subsidiaries of Indian banks may refinance External Commercial Borrowings of highly rated corporates and Navratna/Maharatna PSUs provided the outstanding maturity is not reduced and the all-in-cost of the fresh ECB is lower than the existing ECB; partial refinancing is permitted on the same conditions. Other ECB policy provisions remain unchanged and the Master Direction will be updated accordingly.

Foreign investment framework under FEMA sets entry routes, sectoral caps, pricing rules, and transfer conditions for non-resident investors.
Foreign investment in India is regulated under FEMA and the Non-Debt Instruments framework, with the Reserve Bank administering the rules through directions to authorised dealers and related reporting and payment requirements. The direction consolidates the legal meaning of foreign investment, foreign direct investment, foreign portfolio investment, investment vehicles, LLP investment, downstream investment, non-repatriation holdings, pricing, valuation, and transfer mechanics, while making the underlying NDI Rules and other FEMA notifications prevail in case of inconsistency. It also sets out prohibited sectors, Government-route restrictions for specified ownership patterns, and the permitted routes, instruments and transfer mechanisms for non-resident investors.