Establishment of foreign representative offices governs eligibility, UIN issuance, bank account rules and compliance obligations.
Procedural framework for foreign entities establishing Branch, Liaison or Project Offices in India requires submission of Form FNC to a designated AD Category I bank, which conducts due diligence and may grant approval under delegated powers. Certain applicants require prior Reserve Bank approval and all approved offices receive a Unique Identification Number (UIN) from RBI before the approval letter is issued. Compliance includes defined validity periods, Annual Activity Certificates, bank account and foreign currency account rules for POs, documentation for profit remittances and asset transfers, and reporting obligations by the AD bank.

Foreign exchange regulations update requires authorised dealers to adopt revised export compliance obligations under FEMA.
The circular notifies adoption of the Foreign Exchange Management (Exports of Goods and Services) Regulations, 2015, repealing and superseding the prior 2000 Regulations, directs Authorised Dealers to follow detailed annexed directions for dealings with exporters, and records that the Master Direction on exports has been updated; the directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and do not affect other statutory permissions.

Foreign investment liberalisation for Asset Reconstruction Companies permits full automatic foreign equity, subject to SARFAESI Act constraints.
The policy amendment permits up to 100% foreign equity in Asset Reconstruction Companies on the automatic route. ARCs are entities registered under section 3 of the SARFAESI Act. Investment conditions, including sponsor shareholding and investor participation, are governed by the SARFAESI Act and RBI directions; the total holding of any individual FII/FPI remains below ten percent, and FIIs/FPIs may invest in Security Receipts subject to RBI guidelines and applicable limits. The amendment is effective immediately.

Non-resident deposit regulation clarifies permitted account types and cross-border repatriation, loan and joint-holding rules for NRIs/PIOs.
These Regulations govern deposits between Indian residents and non-residents, defining key terms and exempt categories, and prescribing permitted non-resident account schemes (NRE, FCNR(B), NRO, SNRR, Escrow) with their eligibility, operational conditions, repatriation rules, loan and joint-holding provisions. They address special arrangements for companies, RRBs and power-of-attorney operations, require RBI approval for deposits outside the Regulations, and provide transitional and notification details.

Collateral requirement for exchange house vostro accounts removed, leaving banks free to set collateral policies based on risk factors.
Mandated collateral for Exchange Houses under the Rupee Drawing Arrangement is withdrawn and AD Category I banks may determine collateral, if any, on a risk based basis considering factors such as pre funding, the Exchange House's track record, and whether remittances are gross or net; Master Direction No.2 will be updated and other instructions remain in force, pursuant to powers under the Foreign Exchange Management Act, 1999.

Import Data Processing and Monitoring: banks must route and record all import transactions through centralised IDPMS for compliance.
A centralized Import Data Processing and Monitoring System (IDPMS) mandates that all Category I Authorised Dealer banks upload and manage import transaction data in real time, ensuring Customs and SEZ data flow to the RBI secured server and are shared with banks by AD Code. Banks must not process remittances until the Bill of Entry is reflected in IDPMS; non EDI ports require manual BoE upload by nodal branches. Limited write offs and time extensions are permitted under specified safeguards; outstanding remittances must be uploaded and BEF reporting will be discontinued once IDPMS is operational.

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.