Prohibition on proprietary trading: banks must transact in exchange traded currency futures and options only for clients.
AD Category I banks are prohibited from proprietary trading in exchange traded currency futures and currency options; any transactions in these markets must be conducted solely on behalf of clients. The prohibition is effective immediately, remains until further notice, is issued under the foreign exchange regulatory framework, and does not affect other permissions or approvals required under other laws.

ECB access for asset finance companies allowed under automatic route with lender, hedging and limit conditions.
NBFCs classified as Asset Finance Companies may avail ECBs under the automatic route to finance import of infrastructure equipment for leasing to infrastructure projects, subject to minimum five year average maturity, full hedging of currency risk, and foreign currency bonds only from FATF compliant host jurisdictions; automatic route ECBs (including outstanding ECBs) are limited to 75 percent of owned funds with a per year ceiling, while borrowings beyond that require Reserve Bank approval.

Special Currency Basket value revised; authorised dealer banks must apply the new rupee valuation under FEMA directions.
The Reserve Bank directed a revision of the Special Currency Basket rupee valuation to be applied to transactions under the Deferred Payment Protocols with the erstwhile USSR, instructing Authorised Dealer Category I banks to implement the revised valuation from the stated effective date and to notify their constituents; the directions are issued under FEMA and without prejudice to other statutory permissions.

Line of Credit conditions require majority India sourcing for project imports and specified disbursement timelines.
Exim Bank's LOC to the Government of Seychelles finances eligible imports from India subject to Foreign Trade Policy eligibility, a requirement that at least 75 percent of contract value be supplied from India (with limited relaxations for civil construction), prescribed disbursement timelines for project and supply contracts, declaration of shipments on GR/SDF forms, prohibition on payable agency commission under the LOC with limited remittance options, and issuance of directions to AD Category I banks under FEMA.

Foreign direct investment in multi brand retail now permitted in Karnataka under government approval route, effective immediately.
The press note amends paragraph 6.2.16.5 of the Consolidated FDI Policy to add Karnataka to the list of States and Union Territories that have conveyed consent to implement the multi brand retail FDI policy; implementation remains subject to the government approval route and the amendment takes immediate effect.

Special currency basket valuation revised under FEMA; authorised dealer banks must implement the updated rupee valuation for deferred payment protocols.
The circular notifies a revision in the rupee valuation of the Special Currency Basket for Deferred Payment Protocols, effective from June 13, 2013, replacing the earlier value effective June 5, 2013, and directs Authorised Dealer Category I banks to inform their constituents; the directions are issued under FEMA sections 10(4) and 11(1) without prejudice to other legal permissions.

Contracted exposure documentation shifted to annual auditor certification while preserving client undertaking against duplicate use.
AD Category I banks may replace quarterly statutory-auditor certificates with a single annual certificate confirming that, at any time during the year, contracts outstanding with all AD Category I banks did not exceed the value of the underlying exposures; banks must still obtain an undertaking from clients that the contracted exposure has not been used for derivatives with any other AD bank.

Total foreign investment calculation rules redefine ownership and control consequences, triggering approval requirements in capped sectors.
Guidelines define total foreign investment by aggregating direct and indirect foreign investment across multilayered Indian company structures, specify ownership (>50% beneficial ownership) and control (majority director appointment) thresholds, treat direct investment as non-resident investment and indirect investment as the foreign-held interest of investing Indian companies (with a 100% subsidiary exception), require government approval in capped sectors for establishment or transfer of ownership/control to non-residents, and impose downstream investment compliance, notification and auditor certification obligations.

Foreign Contribution regulation: Banks must use single designated accounts and report foreign remittances promptly to authorities.
Banks must ensure that registered persons receive foreign contribution only in a single designated account through specified bank branches and that no other funds are deposited therein. Banks and authorised persons in foreign exchange are required to report prescribed particulars of foreign remittances, including source, manner and other details, to the specified authority in the prescribed form and manner; banks must also report within thirty days any receipt by an unregistered person who required registration or any large receipt as specified by the Rules.

Deregulation of interest rates: banks may fix deposit rates but must ensure transparency and non-discrimination.
Consolidates RBI directives on interest rates, tenors, calculation, disclosure and operational rules for Domestic, NRO and NRE rupee deposits. Banks are free to fix savings and specified term deposit rates with Board/ALCO approval, subject to non-discrimination, disclosure and the constraint that rates on NRE/NRO deposits not exceed those on comparable domestic rupee deposits. The circular prescribes minimum tenors, permitted additional interest concessions, rules for premature withdrawal, conversion, renewal, advances against deposits, rounding, issuance of term deposit receipts, Basic Savings Bank Deposit Account features, and prohibitions on certain inducements and discriminatory practices.

Foreign direct investment rules: consolidated instruments, pricing, payment routes and mandatory reporting obligations for non-resident investors.
Consolidated RBI regulatory framework under FEMA prescribes scope, entry routes (Automatic/Government), eligible non-resident investors, permissible instruments for FDI, pricing and valuation norms (SEBI or DCF), payment modes (inward remittance, NRE/FCNR debit, conversions, escrow), timelines (shares to be issued within 180 days or refund), sectoral caps and prohibited sectors, modes of investment (fresh issue, transfers, ESOPs, ADR/GDR, ECB conversion), and detailed reporting and compliance obligations via prescribed forms and AD bank certifications.

Export regulation compliance: AD Category I banks must ensure documentation, repatriation and forex account controls for exports.
Export of goods and services is regulated under RBI's Export Regulations with operational responsibility on AD Category - I banks to ensure compliance with declaration forms (GR, SDF, PP, SOFTEX), verification of shipping/customs documents, reporting to the Reserve Bank, timely realisation and repatriation of export proceeds, and adherence to procedures for advance payments, foreign currency accounts (EEFC, DDA), online payment gateway NOSTRO arrangements, and remedies including extension of time and prescribed write off processes.

Advance remittance and documentary evidence rules govern bank obligations for import payments and due diligence compliance.
AD Category I banks must ensure imports comply with the Foreign Trade Policy and FEMA rules, apply standard documentary credit practices, perform KYC/AML due diligence, and obtain prescribed import evidence. Advance remittances for goods and services are permitted without an absolute ceiling but require bank guarantees or standby letters of credit for higher exposures, with sectoral relaxations and reporting obligations. Imports of precious metals and stones carry specific cash margin, usance and documentation controls, and banks must follow up and report defaults in submission of import evidence to the Reserve Bank.

External Commercial Borrowings rules: framework for eligible borrowers, recognised lenders, maturities, end uses and cost ceilings governing cross border corporate borrowing.
The Master Circular sets out the consolidated framework for External Commercial Borrowings, specifying the Automatic and Approval routes, categories of eligible borrowers and recognised lenders, minimum average maturities and corresponding all in cost ceilings, permitted and prohibited end uses, security and guarantee conditions, procedures for Loan Registration Numbers, reporting obligations for Authorised Dealer banks, and special schemes for FCCBs, FCEBs, take out finance, spectrum refinance and low cost affordable housing, with primary compliance responsibility on borrowers and delegated procedural powers to AD Category I banks.

Overseas direct investment rules permit resident entities to invest abroad under automatic or approval routes with compliance and reporting.
Resident Indian parties may make overseas direct investments in JVs and WOS either under the Automatic Route or with prior Reserve Bank Approval; the framework prescribes the components to be reckoned as financial commitment, eligible funding sources, sectoral and activity-based prohibitions, valuation and reporting requirements, special conditions for financial sector investments, rules for guarantees and pledges, processes for transfers and write-offs, hedging permissions, and operational reporting through a designated authorised dealer branch with allotment and use of a Unique Identification Number.

KYC and AML obligations govern money changing authorisations, requiring licensing, due diligence, transaction monitoring and FIU reporting.
The Master Circular consolidates a regulatory framework for money changing activities under FEMA, 1999 requiring companies to meet licensing criteria for FFMC status, including minimum Net Owned Funds, auditor certification, banker's confidential report and declarations on enforcement proceedings. It mandates Reserve Bank approval for branches and franchisees, prescribes operational rules for purchase/sale and settlement of foreign currency, detailed recordkeeping and periodic reporting, and imposes board approved KYC/AML/CFT obligations including beneficial owner identification, transaction monitoring, appointment of a Principal Officer, and CTR/STR reporting to FIU IND.

Compounding of contraventions provides a voluntary mechanism to settle admitted FEMA breaches subject to quantification and authority discretion.
Compounding under FEMA is a voluntary statutory mechanism for settlement of admitted, quantifiable contraventions administered mainly by the Reserve Bank of India under Section 15 and the Compounding Rules, 2000; applications must follow prescribed formats with supporting annexes, are subject to CA discretion in assessing compoundability and quantifying sums by reference to factors like unfair gain and loss to the exchequer, and on payment and compliance result in discharge from further proceedings, whereas non payment or serious issues may lead to enforcement referrals.

Remittance facilities for NRIs: banks may permit repatriation and remittance subject to documentation, tax compliance and prescribed limits.
The Master Circular consolidates FEMA-based remittance facilities for NRIs, PIOs and foreign nationals, defining eligible persons and prescribing conditions for repatriation and remittance of current income, salaries and sale proceeds of assets. Authorised Dealer banks must satisfy themselves on tax compliance, obtain prescribed documentary evidence and Chartered Accountant certificates, apply specified per financial year limits for remittances, enforce nationality-based restrictions for certain asset repatriations, permit re-designation of resident accounts to NRO on exit subject to controls, and observe reporting and procedural formats prescribed by tax authorities.

Establishment of foreign liaison, branch and project offices requires RBI approval and compliance with reporting and remittance rules.
Establishment of Liaison, Branch and Project Offices by foreign entities requires Reserve Bank approval under FEMA via Reserve Bank or Government routes, with eligibility based on profit track record and minimum net worth, submission through an AD Category I bank, and allotment of a Unique Identification Number and PAN. LOs may only undertake non revenue liaison functions funded by inward remittances; BOs may carry out specified commercial and service activities but cannot retail trade or manufacture; POs qualify for general permission when supported by specified contract or financing criteria and may maintain restricted foreign currency accounts. All offices face reporting, auditing, extension and closure procedures and other operational conditions.

Liberalised Remittance Scheme enables resident individuals to remit abroad for permitted transactions subject to bank compliance and reporting.
Authorised Dealers may permit outward remittances by resident individuals for specified current and permitted capital transactions under the Foreign Exchange Management Act and Rules, subject to prescribed ceilings, self declaration or documentary requirements, KYC/AML compliance, record retention, refusal/reporting obligations for suspicious transactions, and reporting of remittances (including those under the Liberalised Remittance Scheme) to the Reserve Bank. The Circular also sets rules for sale, surrender and retention of foreign exchange, operation of Resident Foreign Currency accounts, treatment of prepaid and payment cards, and conditions where prior government or Reserve Bank approval is required.