Remittance of assets: ADs may permit specified outward transfers from India; excess or hardship cases require RBI approval.
The Remittance of Assets Regulations, 2016 replace earlier rules and set when Authorised Dealers may permit outward transfers of funds or proceeds of assets held in India and when prior Reserve Bank approval is required. Definitions cover Non-resident Indian, Person of Indian Origin, remittance of asset, expatriate staff and not permanently resident. ADs may allow remittances for retirements, inheritances, student account closures, NRO balances and certain company liquidation or expatriate provident fund contributions, subject to documentary evidence, routing conditions and undertakings; excess or hardship remittances need RBI approval and all transactions remain subject to Indian tax laws.

Issue and pricing permissions for private sector bank share issuances require statutory compliance and prescribed pricing methods.
The Directions grant general permission to private sector banks to issue shares by public issues, private placements, rights issues and bonus issues, subject to compliance with FEMA, foreign investment policy, SEBI guidelines and the Companies Act; corporate approvals must be obtained. Pricing must follow SEBI formula for listed banks and Companies Act rules for unlisted banks. Allotments triggering threshold holdings require prior regulatory approval and post-allotment reporting of issue details, allottee names and post-allotment shareholding to the regulator in the prescribed format.

Bank amalgamation rules: RBI requires board and shareholder approvals, independent valuations, and safeguards for capital and dissenting shareholders.
These Directions establish the Reserve Bank's framework for voluntary amalgamation of private sector banks and NBFC bank amalgamations, requiring board approval by a two thirds majority of total board membership, shareholder approval by two thirds in value of votes cast, comprehensive due diligence, independent valuation and fair swap ratios, submission of detailed financials and valuer reports, scrutiny of capital adequacy and shareholding concentration, prior Reserve Bank sanction for NBFC amalgamations before Tribunal submission, and provision for dissenting shareholders to claim value as determined by the Reserve Bank.

Foreign investment in REIT, InvIT and AIF units permitted, subject to downstream sectoral caps and reporting obligations.
Foreign investment is permitted in units of SEBI regulated Investment Vehicles - REITs, InvITs and AIFs - with acquisition by persons resident outside India allowed by inward remittance through normal banking channels; transfers, sales or redemptions follow SEBI regulations and RBI directions. Downstream investment is treated as foreign where Sponsor, Manager or Investment Manager is not Indian owned and controlled, and such downstream investment must comply with sectoral caps, FDI policy and applicable provisions for LLPs. REIT units are excluded from the prohibition on "real estate business" for the Principal Regulations. Reporting to RBI or SEBI is required.

Overseas Direct Investment reporting: revised Form ODI consolidates transaction reporting and mandates online UIN issuance for remittances.
Overseas Direct Investment reporting has been rationalised by consolidating remittance and transaction reporting into a revised Form ODI comprising Part I (application for a Unique Identification Number and reporting of remittances/financial commitments with auditor certification/self certification), Part II (Annual Performance Report) and Part III (disinvestment reporting). AD Category I banks must obtain Form ODI Part I prior to executing ODI transactions, report forms in the online OID application to obtain the UIN, retain UIN wise physical records, implement AD Maker/Checker/Authorizer roles for online reporting, and report post investment changes; Resident Individuals may self certify in lieu of auditor certification.

Overseas direct investment compliance: ensure annual performance reports are filed and banks verify APR submission before transactions.
Overseas direct investments by Indian parties and resident individuals require annual submission of an Annual Performance Report (APR) in prescribed Form ODI for each overseas JV/WOS. AD Category I banks must check with their nodal office that all APRs for an applicant have been filed before facilitating any ODI transactions; resident individuals may self certify APRs; where multiple investors exist the largest stakeholder or a designated entity must ensure APR submission; APRs should be based on the latest audited accounts and non compliance will be treated as contravention of the FEMA notification.

Rupee denominated bond issuance overseas now subject to rupee term aggregate limits, investor jurisdiction criteria and reporting obligations.
Issuance of Rupee denominated bonds overseas is subject to an aggregate foreign investment limit fixed in Rupee terms; entities may borrow up to Rs. 50 billion per financial year under the automatic route, with excess requiring RBI approval. Bonds may be issued only in and subscribed by residents of jurisdictions meeting FATF and IOSCO/SEBI information sharing criteria and not featured in FATF public statements for AML/CFT deficiencies. Minimum maturity is three years. Borrowers must obtain lists of primary bondholders and AD Category I banks must report actual principal drawdowns/repayments to the Reserve Bank on the transaction date.

Acceptance of foreign deposits for director nomination treated as current account payments not requiring RBI approval.
Deposits placed by persons resident outside India to nominate themselves or others as directors are treated as a current account (payment) transaction and therefore do not require Reserve Bank approval under the Foreign Exchange Management (Deposit) Regulations; refunds of such deposits on selection or achieving specified vote thresholds are similarly not subject to RBI approval.

Foreign investment limit in insurance sector increased under automatic route subject to prescribed conditions and applicable approvals.
The circular implements an increase in the foreign investment limit in the insurance sector under the automatic route, subject to terms and conditions notified under FEMA; Authorised Dealer Category I banks are to inform constituents and note that the directions are issued under statutory foreign exchange powers but do not obviate other legal permissions or approvals.

Clean credit extension for diamond imports now permitted by authorised banks subject to conditions, due diligence and reporting.
Authorised Dealer Category I banks may approve extensions of clean credit for import of rough, cut and polished diamonds beyond 180 days where satisfied of genuineness, absence of interest on the extended period, and that delays arise from financial difficulty or quality disputes; extensions are not permitted if the importer is under investigation or a frequent offender. AD banks may allow additional time up to 180 days beyond the prescribed due date, must refer cases exceeding that to the Reserve Bank Regional Office, and file half yearly customer wise reports while complying with KYC and AML obligations.

External Commercial Borrowings eligibility widened for infrastructure and certain NBFCs with strict maturity and hedging conditions.
The ECB framework expands Track I eligibility to infrastructure companies, NBFC-IFCs, NBFC-AFCs, Holding Companies and CICs subject to a minimum average maturity of five years and 100 per cent hedging; proceeds use is restricted to Track I permitted ends, with NBFC-IFCs/AFCs limited to infrastructure financing and Holding Companies/CICs limited to on-lending to infrastructure SPVs. Designated AD Category-I banks must verify hedging compliance and report via ECB 2 returns, and may refinance legacy ECBs under delegated powers if all-in-cost is reduced and residual maturity is not shortened.

FDI in e commerce: marketplace model permitted under automatic route; inventory based model disallowed with seller responsibility rules.
Marketplace model e commerce is permitted foreign investment under the automatic route while inventory based e commerce is not. Marketplace entities must act as facilitators, not own inventory, may provide support services (warehousing, logistics, order fulfilment, payment facilitation in conformity with Reserve Bank guidelines), must display seller contact details, leave post sale delivery and warranties to sellers, not influence sale prices, and ensure no single vendor or group accounts for more than twenty five percent of sales.

FPI investment limits in government securities increased with tranche releases and reallocation of unused long term quotas.
Limits for FPI investment in Central Government securities and State Development Loans are increased in two tranches with specified effective dates; existing security-wise ceilings and a minimum residual maturity requirement of three years continue to apply, coupons remain outside limits, and unutilised long-term FPI limits at half-year end will be reallocated to the open category for the following half-year, with operational allocation and monitoring guidelines to be issued by the market regulator.

Foreign investment in pension sector now permitted under automatic route, with registration and approvals required for control transfers.
Foreign equity participation in the pension sector is permitted up to a capped threshold under the automatic route, subject to compliance with the pension-sector regulatory framework and mandatory registration by entities bringing in foreign investment. Transfers or transactions resulting in change of control or ownership to foreign investors require prior government approval in consultation with financial sector departments and the pension regulator, and the investee Indian pension fund is responsible for compliance; ownership and control are as defined in the FDI policy. The decision is effective immediately.

Foreign investment cap in insurance maintained on automatic route, subject to licensing, Indian ownership and regulatory compliance.
A consolidated foreign investment cap permits foreign equity up to forty nine percent in Indian insurance companies and designated intermediaries on the automatic route, subject to IRDAI verification and licensing and compliance with the Insurance Act, 1938. Ownership and control must remain with resident Indian entities as defined in the relevant notification. Foreign portfolio investment follows FEMA and SEBI rules; increases in foreign equity must comply with RBI pricing guidelines. The same cap and conditions apply to brokers, TPAs, surveyors, loss assessors and other IRDA appointed intermediaries; additional conditions govern bank promoted entities and non insurance primary business revenue thresholds for intermediaries.

Diamond Dollar Account reporting requirement relaxed; banks must retain DDA records and provide them to the regulator on request.
Mandatory quarterly and fortnightly submissions on Diamond Dollar Accounts by Authorised Dealer Category I banks to the Reserve Bank are dispensed with; banks must nevertheless maintain an internal database with account holder identity, opening/closing dates and balance data and make it available to the Reserve Bank on demand. Amendments to the Foreign Currency Accounts Regulations effect this change and the Master Directions are being updated. The directions are issued under FEMA statutory powers without prejudice to other legal permissions.

Benchmark-based lending: internal MCLR and Base Rate frameworks require banks to price loans by benchmark plus spread.
Banks must adopt a Board approved interest rate policy and price rupee advances (subject to specified exemptions) by reference to an internal or external benchmark plus a bank defined spread. The internal benchmarks are the Base Rate and the Marginal Cost of Funds based Lending Rate (MCLR), the latter comprising marginal cost of funds, negative carry on CRR, operating costs and a tenor premium; MCLR is tenor linked and published at specified maturities, reviewed monthly (or quarterly where permitted), and governs reset mechanics of floating rate loans.

Interest Rate Regulation: banks must follow board approved, uniform, transparent deposit interest policies with benchmark linkage.
These Directions require scheduled commercial banks to adopt board approved, publicly disclosed and uniform interest rate policies for domestic and specified non resident deposit accounts, mandate non negotiability and transparency of rates, prescribe interest calculation conventions (including daily product for savings and benchmark linkage for floating term deposits), set rules for tenor and size based rate differentiation, govern premature withdrawal interest and penalty disclosure, allow limited additional interest schemes for staff and senior citizens, regulate conversion and treatment of non resident deposits on return to India, and prohibit incentive based deposit mobilisation except narrow permitted exceptions.

EDF waiver for free-of-cost exports: status holders' entitlement now capped by revised annual limit, banks to consider requests.
Status Holders' entitlement to export freely exportable items free of cost for export promotion is limited by an annual monetary cap and a percentage based cap on average annual export realization, with the revised rule applying the lower of the two limits; AD Category I banks may consider requests for EDF waiver from Status Holder exporters under this revised norm, and banks should inform constituents of the change under FEMA authority.

Know Your Customer rules: mandatory risk based CDD, digital/V CIP onboarding, CKYCR uploads, sanctions screening and FIU reporting.
Know Your Customer (KYC) Direction, 2016 requires Reserve Bank regulated entities to implement Board approved KYC policies comprising Customer Acceptance Policy, Risk Management, Customer Identification Procedures and transaction monitoring; mandates documented ML/TF risk assessments and a Risk Based Approach, prescribes Customer Due Diligence for individuals and legal entities including Aadhaar/PAN/OVDs and beneficial owner identification, sets rules for non face to face onboarding (OTP e KYC and V CIP) with technical and audit standards, requires periodic KYC updation, CKYCR upload of KYC records, reporting to FIU IND, wire transfer traceability, and daily sanctions screening and freezing obligations under UAPA and WMD Act procedures.