Interbank rollover flexibility allows residents to switch authorised dealer banks for hedge contract rollover on maturity date.
The Reserve Bank extended the existing inter-bank switch facility so that residents may rollover hedge transactions by switching Authorised Dealer Category I banks on the contract maturity date. The extension applies to all hedge transactions and remains subject to the established conditions: a commercially warranted reason for the switch, simultaneous cancellation and rebooking on maturity, and the rebooking bank's responsibility to ensure cancellation of the original contract. These directions are issued under the Foreign Exchange Management Act.

Special Currency Basket revision: Rupee value adjusted; authorised banks to apply FEMA directions and notify constituents.
The Reserve Bank revised the Rupee valuation of the Special Currency Basket and instructed Category I Authorised Dealer banks to apply the new value in dealings under the Deferred Payment Protocols with the erstwhile USSR, requiring banks to notify their constituents; the directions are issued under the Foreign Exchange Management Act (FEMA) and without prejudice to other legal permissions.

Buyback of FCCBs permitted under approval route with discount requirement and reporting and compliance obligations.
Continuation of the scheme permitting buyback of Foreign Currency Convertible Bonds (FCCBs) under the approval route, subject to a minimum discount on accreted value and compliance with foreign currency borrowing rules where applicable; other terms of the earlier circular remain applicable and the facility is time-bound. Post-buyback compliance requires submission of the ECB-2 return and a detailed report through the designated Category-I Authorised Dealer bank specifying outstanding FCCB amounts, accreted value bought back, buyback rates, amounts and sources of funds.

Foreign investment in India: rules for FDI and portfolio inflows, routes, sectoral caps, pricing, payment and reporting.
The Master Circular consolidates RBI rules under FEMA governing foreign investment in India: permitted instruments (equity, fully and mandatorily convertible debentures/preference shares), two entry routes (Automatic and Government), investor eligibility, pricing and payment modalities (including conversions of ECBs, royalty/technical fees and import payables into equity), sectoral caps and prohibited activities, and detailed reporting and documentation requirements (FC GPR, FC TRS, KYC, auditor/secretary certificates). It also compiles PIS, FVCI, ADR/GDR/IDR, escrow and account rules, monitoring obligations of AD banks/custodians and annexed sectoral schedules.

Export of Goods and Services regulation consolidated, directing authorised dealer banks to follow unified instructions subject to a temporary sunset.
Export of goods and services is governed by the Foreign Exchange Management Act and Current Account Rules; this Master Circular consolidates existing instructions for Category I Authorised Dealer banks, lists underlying circulars in an appendix, and is issued with a sunset clause after which it will be withdrawn and replaced by an updated master circular.

Advance remittance conditions: banks must obtain guarantees, conduct due diligence and require evidence of import before permitting remittances.
Master Circular directs AD Category I banks to ensure imports comply with Foreign Trade Policy and FEMA, apply KYC/AML, obtain and preserve requisite import documentation (including Exchange Control copies of Bills of Entry), and to follow prescribed time limits and reporting obligations. It prescribes conditions for advance remittances and when guarantees or standby LCs are required, sets sectoral relaxations and documentation substitutes for certain importers, and requires follow up, verification, acknowledgement and retention of import evidence along with specified half yearly and monthly reporting duties.

External commercial borrowings and trade credits framework: routes, eligible parties, cost ceilings, end use limits and reporting requirements.
The Master Circular consolidates RBI rules under FEMA governing External Commercial Borrowings (ECB) and trade credits, delineating two routes-Automatic and Approval-with specified eligible borrowers and recognised lenders, instrument types, amount and maturity thresholds, all in cost ceilings, permitted and prohibited end uses, security and guarantee conditions, mandatory Loan Registration Number before drawdown, AD bank reporting obligations (Form 83, ECB 2), and delegated powers to AD Category I banks for certain post LRN modifications, while reserving other approvals to the Reserve Bank.

Overseas direct investment rules: automatic and approval routes, 400% net worth ceiling, ODI reporting and UIN requirements.
The Master Circular consolidates FEMA Regulation based rules permitting residents to make overseas direct investments in JVs and WOS under the Automatic Route (subject to a 400% of net worth financial commitment ceiling and defined inclusions such as equity, loans and guarantees) or the Approval Route. It prescribes eligible funding sources, sectoral safeguards for financial services, valuation and documentation standards, designated AD bank routing, Form ODI reporting and UIN allotment, APR and disinvestment procedures, rules on guarantees, pledges, hedging, write offs, ESOP treatment, and operational responsibilities of AD Category I banks.

Money changing activities: licensing, net owned funds, branch/franchise approvals, KYC/AML, transaction limits, recordkeeping and reporting requirements.
The Circular prescribes the Reserve Bank's consolidated licensing, expansion and operational requirements for AMCs/FFMCs/ADs: corporate registration and minimum Net Owned Funds; documentation, auditor certification and fit and proper assessments; prior approval for additional branches and franchise arrangements with due diligence, reporting and distance limits; operational rules on purchases/sales, payment modes, encashment certificates, registers (FLM forms) and settlement methods; KYC/AML/CFT policies with risk based customer due diligence, record retention for ten years, CTR/STR reporting to FIU IND; concurrent audit and Reserve Bank inspection powers; and revocation powers for non compliance.

Compounding of FEMA contraventions enables voluntary settlement upon quantification and payment, subject to eligibility and process safeguards.
Compounding under FEMA, 1999 is a voluntary, discretionary mechanism permitting settlement of admitted contraventions by payment of a quantified sum; the RBI may compound all FEMA contraventions except clause (a) of Section 3, which is handled by the Directorate of Enforcement. Applications must be in prescribed form with supporting annexures and fee, and will be disposed within 180 days. Compounding is unavailable where amounts are not quantifiable, where a similar contravention was compounded within three years, where required statutory approvals are not obtained, or where money laundering, national security or serious regulatory concerns require referral to enforcement agencies.

Repatriation limits for non-residents clarified; remittances require authorised bank certification, CA certificate and tax compliance.
Remittance facilities for NRIs, PIOs and foreign nationals under FEMA permit repatriation of balances and sale proceeds subject to an annual repatriation limit, Authorised Dealer bank satisfaction, an undertaking by the remitter and a Chartered Accountant's certificate in prescribed formats. Current income may be remitted as debits to NRO accounts or credited to NRE/FCNR accounts where tax obligations are met. AD banks must obtain declarations and preserve documentation, refuse transactions where requirements are unmet, and report suspected evasion; specified nationalities are excluded from certain repatriation facilities.

Establishment of foreign liaison and branch offices regulated by RBI; approvals, eligibility and compliance govern operation and remittance.
Establishment of Liaison, Branch and Project Offices by foreign entities in India requires RBI approval or compliance with specified general permissions; applications are filed in Form FNC via designated AD Category I banks and evaluated under Reserve Bank or Government routes against eligibility criteria including track record and minimum net worth. Liaison Offices are limited to non commercial representative roles and funded by inbound remittances, Branch Offices may carry out prescribed commercial activities but not retail or manufacturing, and Project Offices receive general permission subject to qualifying contracts and funding. All offices must obtain UIN and PAN, submit Annual Activity Certificates and audited accounts, and comply with reporting, remittance and closure procedures.

Liberalised Remittance Scheme permits resident individuals to remit abroad subject to documentation, KYC and reporting obligations.
The Master Circular consolidates rules under FEMA governing resident drawal and remittance of foreign exchange, delegating specified release powers to Authorised Dealers while identifying prohibited transactions and transactions requiring prior Government or Reserve Bank approval under Schedules I-III. It details operational procedures for self declaration releases, documentation and KYC obligations under Section 10(5), surrender and retention of unspent exchange, Resident Foreign Currency accounts, advance remittances and guarantees for import of services, and sets out the terms and reporting and PAN requirements for the Liberalised Remittance Scheme for resident individuals.

Foreign exchange risk hedging rules: permitted products, participant eligibility, documentation and reporting requirements.
Consolidated Reserve Bank master circular establishing permissible participants and hedging products (forwards, swaps, options, interest rate instruments, commodity and freight derivatives, exchange traded currency futures/options), with product specific operational conditions (tenor, notional limits, deliverability, rebooking/cancellation rules), documentation and auditor certification requirements, prudential eligibility and risk management controls for banks, delegated and approval routes for commodity/freight hedging, rules for non resident bank rupee accounts and inter bank dealings, and extensive periodic reporting and surveillance obligations to the Reserve Bank.

Repatriation of sale proceeds restricted: permitted only where acquisition complied with foreign exchange rules and traceable funds are shown.
Acquisition and transfer of immovable property by NRIs, PIOs, foreign missions, persons resident outside India for permitted activities, and foreign nationals of non-Indian origin are regulated under FEMA and RBI notifications. NRIs and PIOs may purchase and transfer non-agricultural property with payments only through permitted banking channels or non-resident accounts; repatriation of sale proceeds is allowed conditionally where acquisition complied with foreign exchange law and repatriation is limited to amounts traceable to permitted foreign exchange/non-resident accounts, with inheritance- and rupee-funded proceeds subject to documentary and tax-clearance requirements and prior approval when exceeding prescribed limits. Specific declaration, permission and documentation requirements apply, including Form IPI and prior RBI permission for certain nationalities.

Rupee Drawing Arrangements regulate non-resident exchange house vostro accounts, requiring approvals, funding, strict controls and reporting.
Rupee Drawing Arrangements require AD Category I banks to obtain Reserve Bank approval for initial tie ups and to inform the Reserve Bank of subsequent arrangements; accounts must be separately maintained, operate on a credit basis without overdrafts, be funded by sale of permitted foreign currency, and used only for specified inward personal remittances and permitted payments. Arrangements may follow DDA, Non DDA or Speed Remittance procedures with prescribed auditor/inspection regimes, lien and collateral requirements based on exchange house vintage, and strict KYC/AML/CFT, internal control, reporting and audit obligations.

Non-resident ordinary rupee accounts: rules on permissible credits, debits, repatriation and compliance obligations clarified.
Regulation of acceptance, operation and repatriation of funds in Non-Resident Ordinary Rupee (NRO) Accounts sets eligibility for persons resident outside India, permitted account forms and joint-holdings, and details permissible credits (inward remittances, legitimate dues, sale proceeds, specified gifts/loans) and debits (local rupee payments, remittance of current income, remittances for bonafide purposes and transfers to NRE accounts subject to overall annual ceilings and tax compliance). Repatriation of balances and sale proceeds requires documentary evidence, an undertaking, and a Chartered Accountant's certificate; specified nationalities face restrictions and certain repatriations require prior Reserve Bank permission.

Money Transfer Service Scheme mandates inward only remittances and strict KYC/AML compliance and reporting by Indian Agents.
The Master Circular consolidates MTSS regulation: permits only inward personal remittances to individuals, sets authorisation criteria for Indian Agents, conditions for Overseas Principals, and collateral and disbursement limits. It mandates a detailed KYC/AML/CFT regime-risk based customer acceptance, identification, enhanced due diligence for high risk customers (including PEPs), transaction monitoring, appointment of a Principal Officer, CTR/STR reporting to FIU IND, record preservation, periodic collateral review, and Reserve Bank inspection and renewal procedures under FEMA.

Line of Credit enables export financing under sourcing, LC/disbursement and reporting conditions for eligible contracts from India.
A Line of Credit by Exim Bank to the Government of Zambia finances eligible exports of goods, machinery, equipment and consultancy services that qualify under the Foreign Trade Policy. At least 75% of contract value must be supplied from India, with up to 25% non-consultancy goods/services procured abroad. The Credit Agreement is effective from June 8, 2012; Letters of Credit and disbursements follow prescribed time limits. Shipments require GR/SDF declarations. No agency commission is payable under the LOC, though exporters may use own resources or EEFC balances for commission remittance subject to AD Category-I bank compliance. Directions issued under FEMA remain without prejudice to other statutory permissions.

Foreign investment in India: updated sectoral caps, entry routes, conditions and prohibited sectors specified under revised FEMA annexes.
The Reserve Bank aligned Annex A and Annex B of Schedule 1 to the FEMA Regulations with the Government's Consolidated FDI Policy: Annex A lists sectors where FDI is prohibited; Annex B prescribes sector specific FDI caps, entry routes (Automatic or Government) and operative conditions, including minimum capitalization, divestment and sourcing requirements, lock in periods, security and licensing conditions. AD Category I banks are to inform constituents; amendments to FEMA regulations will be issued separately; directions are issued under the Foreign Exchange Management Act without prejudice to other statutory permissions.