Conversion requirement for debentures: only fully mandatory convertibles qualify as equity under FDI, others treated as debt.
Only instruments that are fully and mandatorily convertible into equity within a specified timeframe will be treated as equity under the FDI framework; optionally or partially convertible instruments that are debt like are excluded. FIIs may continue to invest in listed non convertible debentures under existing rupee debt norms. Issuances and investments in partially/optionally convertible instruments made on or before the cutoff date may continue until maturity. Amendments to the foreign exchange regulations will be notified and authorised dealers must notify constituents.

Classification of preference shares as equity or debt determines foreign investment treatment and ECB applicability.
Preference shares that are fully and mandatorily convertible into equity within a specified time are treated as part of share capital and included in foreign equity calculations for sectoral caps. Non convertible, optionally convertible or partially convertible preference shares are treated as debt and must conform to External Commercial Borrowing guidelines and caps, encompassing eligible borrowers and lenders, amount and maturity limits, end use stipulations, and rupee interest rate norms for ECBs. Preference instruments issued on or before the cutoff date may continue until current maturity, subject to RBI/SEBI and statutory requirements.

Mutual fund overseas investment liberalisation expands permitted asset classes to include ETFs, overseas funds and foreign ADRs/GDRs.
Permits expansion of overseas investment avenues available to Mutual Funds by adding three permissible categories: overseas mutual funds with nominal unlisted exposure, overseas exchange traded funds that invest in securities, and ADRs/GDRs of foreign companies; maintains monthly statistical reporting to the central bank with a revised format and notes that regulatory amendments will be issued separately, with directions issued under statutory foreign exchange powers and without prejudice to other legal permissions.

Project export data reporting required; banks must forward post award approvals to Exim Bank and email prescribed XLS data.
Authorised Dealer Category I banks must send copies of post award approvals for project export contracts and supply contracts on deferred payment basis to the Export Import Bank of India and email the prescribed data in XLS format to enable consolidated compilation of project export data; this requirement recalls delegated post award approval powers for projects up to USD 100 million and is issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.

Single-source FDI data policy: ministries must obtain all FDI inflow statistics only from the designated central data cell.
The Department's SIA is the single point custodian for collection, collation and dissemination of FDI approvals and inflows, maintaining a central database and publishing monthly FDI statistics. To avoid discrepancies caused by differing processing parameters, sectoral ministries are instructed to obtain FDI inflow data only from the designated central data cell and not directly from the central banking authority.

Revision of special currency basket value notified; AD Category I banks instructed to apply new rupee parity and inform constituents.
Revision of the rupee valuation of the special currency basket under the Deferred Payment Protocols is notified for application by Authorised Dealer Category I banks, with a late April revision made effective in early May 2007; AD Category I banks must apply the revised rupee value and inform their constituents. The Directions are issued under the Foreign Exchange Management Act, 1999 and do not affect other statutory permissions or approvals.

Line of Credit compliance: Exim Bank LOC to Seychelles imposes shipment declarations, agency commission limits and FEMA based rules.
Exim Bank's Line of Credit to the Government of Seychelles, effective April 25, 2007, finances eligible commodity purchases; the last date for opening Letters of Credit and disbursements is seventy two months from that effective date. Shipments must be declared on GR/SDF Forms. No agency commission is payable under the LOC, though exporters may use their own resources or EEFC balances for commission after realisation and subject to prevailing instructions. AD Category I banks must notify exporters and obtain LOC details; directions issued under FEMA sections 10(4) and 11(1).

Overseas direct investment reporting consolidated into a single ODI form to streamline submission and monitoring requirements.
Rationalisation consolidates multiple overseas direct investment application and reporting forms into a single standardized form ODI comprising: Part I (Indian party details, investment in new and existing projects, funding, declaration and auditor certificate), Part II (reporting of remittances), Part III (Annual Performance Report) and Part IV (report on closure, disinvestment, voluntary liquidation or winding up). The revised reporting system preserves existing eligibility criteria and submission routes via Authorised Dealer Category-I banks, effective from June 1, 2007.

Special currency basket revision: AD Category I banks must apply updated rupee valuation and notify constituents.
Revision of the rupee valuation for the special currency basket requires Authorised Dealer Category I banks to apply the updated rupee value for transactions under the deferred payment protocols, notify their constituents, and comply with the statutory foreign exchange directions while observing any other permissions required under law.

Commodity hedging permissions expanded to allow specified domestic producers and ATF users to hedge select exposures in international markets.
AD Category I banks authorised by the Reserve Bank may permit domestic producers/users to hedge price risk in aluminium, copper, lead, nickel and zinc in international exchanges using only standard exchange traded futures and options (purchases only), subject to limits based on historical purchases/sales and underlying economic exposure. Actual ATF users may hedge domestic purchase exposures in international markets and, if warranted, use OTC contracts against firm orders with documentary evidence. Boards must approve derivative policies, transactions must route through designated ADs, and authorised banks must report monthly to the Reserve Bank.

Delegation of remittance authority to authorised banks enables remittance from liquidated companies subject to tax and auditor compliance.
AD Category I banks are authorised to permit remittance out of assets of Indian companies under liquidation provided the remittance complies with any court or liquidator order and the applicant submits a tax clearance or no objection from the Income Tax authority, auditor certificates confirming domestic liabilities are paid or provided for, that the winding up conforms to the Companies Act, 1956, and, for non court winding up, an auditor certificate confirming no pending legal proceedings or impediments.

Operation of NRO account by power of attorney permits local rupee payments and remittance of current income under specified restrictions.
A resident Power of Attorney holder may operate a non-resident ordinary rupee (NRO) account to effect local rupee payments, including eligible investment payments under RBI regulations, and to remit outside India the non-resident account holder's current income in India net of taxes. The PoA holder may not repatriate funds to anyone other than the non-resident account holder, make gifts to residents on the account holder's behalf, or transfer funds to another NRO account. Banks may allow such operations pending formal amendment of the regulations.

Remittance for overseas equipment imports allowed for BPOs subject to approvals, bank verification, supplier payment and certification.
Authorised Dealer Category I banks may permit BPO companies to remit funds for equipment purchased and installed at overseas International Call Centres, provided the BPO has requisite approvals, the bank verifies bonafides and contractual compliance, payment is made directly to the overseas supplier, and the bank obtains a CEO or auditor certificate confirming importation and installation at the overseas site.

Escrow account opening by AD Category I banks permitted for non resident corporate open offers, subject to SEBI compliance.
AD Category I banks may open Escrow and Special Accounts for non resident corporate acquirers for acquisition/transfer of shares or convertible debentures via open offers, delisting or exit offers without prior Reserve Bank approval, subject to compliance with applicable SEBI regulations (including SAST), the Companies Act, 1956, and the Annex terms; amendments to FEMA (Deposit) Regulations will be notified separately and the directions are issued under Sections 10(4) and 11(1) of the FEMA, 1999.

Foreign exchange payments for oil exploration: banks may permit cash call payments subject to production agreement verification and tax clearance.
Authorised Dealer Category I banks may permit payments towards cash calls to Operators for oil exploration by credit to approved foreign currency or rupee accounts in India or by remittance overseas, provided the bank obtains and retains the production sharing agreement, secures tax clearance evidence (tax NOC or paid challans or CA certificate and undertaking), and is satisfied as to the bonafides of the transaction under FEMA; the directions operate without prejudice to other statutory permissions.

ECB end-use restriction bars real estate borrowing; all-in-cost ceilings for longer maturities lowered effective immediately.
Utilisation of ECB proceeds is not permissible in real estate; the exemption for development of integrated townships is withdrawn. All-in-cost ceilings are reduced: three to five year maturities revised to 150 basis points and maturities over five years revised to 250 basis points over six-month LIBOR (or applicable benchmark). The changes apply immediately to ECBs under both the automatic and approval routes, are subject to review, and regulatory amendments will follow.

Automatic route for Navaratna PSU investments in overseas oil exploration permitted, subject to competent authority approval and reporting.
AD Category I banks may permit remittances by Navaratna PSUs for investment in unincorporated overseas oil and natural gas exploration entities after verifying that the proposal is approved by the appropriate competent authority (Board of Directors, ECS, or CCEA as applicable) and supported by a certified Board resolution; such investments are allowed under an automatic route and remain subject to the usual reporting requirements.

Surrender period for resident individuals: uniform 180-day deadline to present realised or unspent foreign exchange to authorised persons.
A uniform 180-day period is prescribed for resident individuals to surrender received, realised, unspent or unused foreign exchange to an authorised person from the date of receipt, realisation, purchase, acquisition or return of the traveller; prior staggered timelines for specific types of receipts and instruments remain applicable to other persons and cases, and authorised persons must notify their constituents.

Repatriation of FCNR maturity proceeds to third parties allowed when authorised by account holder and bonafides verified.
Repatriation of maturity proceeds of FCNR(B) deposits may be permitted to third parties outside India where the account holder specifically authorises the remittance and the authorised dealer is satisfied about the bonafides of the transaction; AD Category I and authorised banks must ensure compliance with applicable FEMA provisions and any other statutory permissions.

ACU Dollar account statement requirement: Category-I authorised banks must issue transaction and monthly statements under FEMA directions.
Authorised Dealer Category-I banks must issue ACU Dollar account statements to foreign counterparties when transactions occur and on a monthly basis, pursuant to the Memorandum of Procedure for channelling transactions through the Asian Clearing Union, to align with international best practices and avoid reconciliation problems; directions are issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act and without prejudice to other required permissions.