External Commercial Borrowings reform expands automatic-route access and permits INR-designated ECBs with specified end-use conditions.
The circular expands automatic-route access for External Commercial Borrowings, permits INR-designated ECBs from overseas equity holders and continues INR-designated ECB access for microfinance NGOs; it recognises Interest During Construction as a permissible end-use for infrastructure companies provided IDC is capitalised and part of project cost, while other ECB parameters and reporting arrangements remain unchanged.

Bridge finance for infrastructure: short term import credit must be replaced by compliant long term ECB with prior RBI approval.
Bridge finance in the form of short term credit for import of capital goods by infrastructure companies is permitted under the approval route, provided the bridge finance is replaced by a long term ECB complying with all extant ECB norms and with prior Reserve Bank approval. Designated AD Category I banks must monitor end use and verify imports via Bill of Entry; Indian banks may not provide guarantees. All other ECB conditions and reporting obligations remain unchanged.

External Commercial Borrowings for infrastructure allowed to refinance domestic rupee capital loans under specified conditions and monitoring.
ECB policy for the infrastructure sector permits a specified portion of fresh ECB proceeds to refinance outstanding Rupee term loans taken for capital expenditure on earlier completed infrastructure projects, under the approval route and subject to conditions: a majority of proceeds must fund capital expenditure for new infrastructure projects; refinance is limited to Rupee loans for capital expenditure and to loans outstanding with the financing bank; applications via Authorised Dealer Category I banks must include project and auditor certifications and AD confirmation of outstanding Rupee loans; AD banks shall monitor end use and domestic banks may not provide guarantees.

Cross-border inward remittance agents must consider FATF-identified AML/CFT risks and comply with RBI, FEMA and PMLA directives immediately.
Authorised persons under the Money Transfer Service Scheme are directed to consider an enclosed FATF Statement identifying jurisdictions with strategic AML/CFT deficiencies, to inform their constituents, obtain Principal Officer acknowledgement, integrate FATF risk considerations into cross-border inward remittance operations, and note that directions are issued under FEMA and PMLA with penal consequences for non-compliance.

Money changing activities: consider FATF jurisdictional AML/CFT risk statements and align compliance under FEMA and PMLA.
Authorised persons in money changing activities must consider the FATF Public Statement identifying jurisdictions with strategic AML/CFT deficiencies, bring the statement to their constituents' attention, have their Principal Officer acknowledge receipt, and incorporate the FATF risk considerations into compliance practices; non compliance may attract penal provisions under the Foreign Exchange Management Act, the Prevention of Money Laundering Act, and related rules.

Cross-border inward remittances: agents must apply enhanced AML/CFT scrutiny for transactions involving listed high-risk jurisdictions.
Authorised Persons under the Money Transfer Service Scheme must consider FATF-identified AML/CFT deficiencies and apply enhanced customer due diligence and risk mitigation when dealing with persons or financial institutions from listed jurisdictions, with special attention and counter-measures advised for Iran and DPRK; legitimate trade may continue but non-compliance with statutory AML and foreign exchange obligations attracts penal consequences.

AML/CFT risk advisory: enhanced due diligence urged for business with jurisdictions identified as having strategic deficiencies.
Authorised Persons must account for AML/CFT risks when dealing with persons and financial institutions from jurisdictions identified by FATF-notably Iran and DPRK, and additionally Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria and Turkey-and apply Enhanced Due Diligence and other risk mitigation measures while not precluding legitimate trade. The advisory highlights risks from correspondent relationships, the need for effective suspicious transaction reporting, and instructs Authorised Persons to notify constituents and have Principal Officers acknowledge receipt. Directions are issued under the Foreign Exchange Management Act and the Prevention of Money Laundering Act and non-compliance may attract penal provisions.

Medical payments for visiting NRI close relatives now permitted as resident to resident payments under FEMA notification covering related services.
Resident individuals may pay medical expenses of visiting NRI/PIO close relatives (as defined in Section 6 of the Companies Act, 1956); such resident to resident payments are covered as "services related thereto" under Regulation 2(i) of Notification No. FEMA 16/RB 2000 dated May 3, 2000. Authorised Dealer banks are to notify constituents and customers. Directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and are without prejudice to permissions required under other laws.

Repayment by close relatives: residents may repay loans of non resident close relatives by crediting the borrower's loan account.
Where an authorised dealer in India has granted a loan to a non resident Indian in accordance with the Borrowing and Lending in Rupees Regulations, such loans may be repaid by a resident close relative of the Non Resident Indian by crediting the borrower's loan account through the bank account of such relative.

Loans in rupees to NRI close relatives permitted subject to interest free, one year minimum maturity and specified usage and repayment conditions.
Resident individuals may lend rupee loans to NRI/PIO close relatives by crossed cheque or electronic transfer if the loan is interest-free, has a minimum one-year maturity, is credited to the borrower's NRO account, is not remitted outside India, is used only for the borrower's personal or permitted business purposes in India (excluding activities prohibited for non-resident investment), and is repaid via inward remittance, debit to NRO/NRE/FCNR accounts, or sale proceeds of pledged assets.

Rupee gifts to NRI close relatives allowed; credit to recipient NRO account subject to LRS overall limit compliance.
Resident individuals may make rupee gifts to NRI/PIO close relatives by crossed cheque or electronic transfer, with the amount credited to the recipient's NRO account as an eligible credit. Gifts must comply with the overall limit under the Liberalised Remittance Scheme and the donor is responsible for ensuring LRS limits are not exceeded. AD banks are to implement the facility pending amendments to the Deposit Regulations and FEMA notification, and the directions are issued under FEMA subject to other legal permissions.

Credit of FDI sale proceeds to NRE/FCNR(B) accounts permitted under Regulation 11; banks to implement FEMA guidance.
Sale proceeds of foreign direct investment in India may be credited to NRE/FCNR(B) accounts of NRIs/PIOs under Regulation 11 of the FEMA (Transfer or Issue of Security) Regulations, 2000; this clarifies that the facility previously reflected in Schedules 3-5-subject to purchase having been by inward remittance or from existing NRE/FCNR(B) funds and applicable taxes-will continue to apply. Authorised Dealer banks are to implement and notify customers. Directions issued under Sections 10(4) and 11(1) of the FEMA, 1999.

Joint holding of RFC/EEFC accounts with resident close relatives permitted, but joint holder cannot operate account during lifetime.
Resident individuals may include resident close relatives as joint holders in their EEFC and RFC accounts on a former or survivor basis, provided the joint holder is not permitted to operate the account during the lifetime of the resident account holder; regulatory amendments will follow and authorised banks must notify account holders, without prejudice to other legal permissions.

Gift of securities to non-resident relatives requires prior RBI approval and now permits a higher annual transfer threshold.
Transfers of securities by way of gift from residents in India to persons resident outside India require prior approval of the Reserve Bank under Regulation 10A(a) of the FEMA (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000; all other conditions of Regulation 10A(a) remain unchanged. The circular increases the applicable annual monetary ceiling for such gifts and notes that amendments to the Regulations will be issued separately, directing Authorised Dealer banks to notify their constituents.

Joint NRE/FCNR(B) accounts with resident close relatives now permitted on former-or-survivor basis, with POA operation allowed.
NRIs and PIOs may open NRE and FCNR(B) accounts jointly with a resident close relative on a former-or-survivor basis, with the resident eligible to operate the account as Power of Attorney during the NRI/PIO's lifetime; authorised banks must notify account holders and regulatory amendments to deposit regulations will be issued.

Joint account holdings with non-resident close relatives allowed on former-or-survivor basis with operation restricted during lifetime.
Residents in India may include non-resident close relatives as joint holders in resident savings bank accounts on a former or survivor basis, with "close relatives" as defined in Section 6 of the Companies Act, 1956; such non-resident joint holders shall not be eligible to operate the account during the lifetime of the resident holder. Authorised Dealer banks must notify their customers. The directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and are without prejudice to other legal permissions.

Delegation of lender-change approval for external commercial borrowings allows AD Category-I banks to approve transfers subject to conditions.
Authorised Dealer Category-I banks are empowered to approve changes in the recognised lender for ECBs when both original and new lenders fall within specified recognised categories, provided the new lender meets recognised-lender criteria, no other ECB terms change, and the ECB complies with extant guidelines; changes involving foreign equity holders or collaborators remain subject to Reserve Bank review. Approved changes must be reported in Form 83 and the amendment is effective immediately while other ECB policy parameters remain unchanged.

Special currency basket valuation revised, affecting deferred payment protocols; banks must apply new Rupee value and notify constituents.
RBI circular revises the Rupee value of the special currency basket applicable to Deferred Payment Protocols with the erstwhile USSR, fixing the new Rupee value effective August 23, 2011. AD Category I authorised dealer banks are directed to apply the revised valuation and notify their constituents. The directions are issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and are without prejudice to other statutory permissions or approvals.

Rupee Drawing Arrangements extended to Malaysia under Speed Remittance, allowing vostro accounts for non-resident exchange houses.
The circular extends the Rupee Drawing Arrangements (RDAs) under the Speed Remittance procedures to permit exchange houses in Malaysia to open and maintain Rupee and foreign currency vostro accounts for inward remittances for permissible purposes, on the same terms as existing RDAs for other jurisdictions; other instructions remain unchanged and AD Category-I banks must notify constituents, with the directions issued under FEMA subject to any other legal approvals.

Qualified Foreign Investors may buy rupee equity mutual fund units via direct or indirect routes, subject to KYC and repatriation.
Qualified Foreign Investors meeting SEBI KYC norms may purchase rupee denominated units of equity schemes of SEBI registered domestic mutual funds on a repatriation basis via two routes: Direct Route through SEBI registered Depository Participants using a separate single rupee pool bank account, and Indirect Route via Unit Confirmation Receipts with limited foreign currency accounts for subscription and redemption. Investments are non tradable, subject to jurisdictional compliance standards, KYC by DPs and mutual funds, monitoring against a global investment ceiling, prescribed timelines for fund transfer and repatriation, and applicable FEMA provisions.