Foreign Portfolio Investment scheme allows registered RFPIs to invest in equity, government and corporate debt under SEBI and RBI limits.
The Reserve Bank consolidates prior FII/QFI regimes into a Foreign Portfolio Investment framework by recognising SEBI registered investors as Registered Foreign Portfolio Investors (RFPI), permitting RFPIs to trade equity, convertible debentures, exchange traded derivatives and to invest in government securities and corporate debt subject to RBI and SEBI limits; RFPIs may open Special Non Resident Rupee and foreign currency accounts for investment flows, use eligible securities as collateral on exchanges, and must report transactions to RBI in the existing LEC format, with transitional provisions for existing FIIs and QFIs.

Rupee Drawing Arrangement limit increase expands permissible trade remittance per transaction, effective immediately under FEMA authority.
The Reserve Bank amended the Rupee Drawing Arrangements to raise the per transaction ceiling for trade related remittances carried out through Rupee/Foreign Currency vostro accounts of non resident exchange houses, effective immediately. All other provisions of the Memorandum of Instructions remain unchanged. Authorised Dealer Category I banks must notify their constituents. The directions are issued under FEMA and do not affect any permissions required under other laws.

Direct to Account facility allows electronic credit of foreign inward remittances to beneficiary accounts subject to KYC and AML requirements.
Foreign inward remittances under the Money Transfer Service Scheme may be electronically credited directly to beneficiaries' bank accounts under the Direct to Account facility, provided recipient accounts are KYC compliant or KYC/CDD is completed before credit; partner banks must mark and include accurate originator and beneficiary information in transfer messages and flag remittances as foreign inward receipts, while recipient banks must maintain identification records, may seek further information, and must report suspicious transactions to FIU IND.

Export data monitoring mandated: AD banks must report shipping documents through the centralized EDPMS platform for consolidated export reporting.
The Reserve Bank operationalized the Export Data Processing and Monitoring System (EDPMS) for Authorised Dealer banks to report shipping documents and export-related returns on a single IT platform; AD banks received user credentials and a web link. Going forward, new shipping documents must be reported in EDPMS while legacy reports will continue in the old system until a phased discontinuation. The directions are issued under Section 10(4) and Section 11(1) of the FEMA, 1999 and are without prejudice to other statutory permissions or approvals.

Line of Credit for project exports requires substantial India sourced supplies and GR/SDF shipment declarations.
Exim Bank's Line of Credit to Nicaragua finances eligible goods, machinery, equipment and consultancy services from India for two substations, requiring a substantial majority of contract value to be supplied from India while a minority may be procured abroad; shipments must be declared on GR/SDF forms and Letters of Credit and disbursements must occur within specified timelines tied to project completion or a fixed duration from the agreement date.

FDI limits for MSEs: non resident investment allowed under Annex B and FDI policy; excess equity needs prior approval.
Foreign direct investment into companies qualifying as Micro and Small Enterprises and not engaged in activities listed in Annex A may be admitted subject to the ceilings and entry routes in Annex B and applicable FDI policy. Industrial undertakings manufacturing items reserved for the MSE sector that are not MSEs may issue shares beyond the 24 percent cap only with prior approval of the Foreign Investment Promotion Board; MSMED Act investment thresholds for micro and small enterprises are restated and FEMA-based directions are without prejudice to other approvals.

NRO account remittance reporting: monthly statements required within seven days, including NRO to NRE transfers under FEMA compliance.
Authorised Dealer Category I banks must submit a monthly statement within seven days of month end to the Chief General Manager in Charge, Foreign Exchange Department (NRFAD), Reserve Bank of India, showing number of applicants and total amounts remitted from NRO accounts as per the revised proforma. The proforma requires separate reporting of sale proceeds of immovable property, other assets and transfers from NRO to NRE account; data may be sent preferably by e mail.

ECB reporting obligations updated to include hedge and foreign currency exposure details; monthly certified ECB 2 returns required.
The RBI revised Part E of the ECB 2 Return to require disclosure of foreign currency exposure, foreign currency earnings and expenditure, and financial hedges contracted for ECB risk management; the amended format applies from the April 2014 return. Corporates must continue monthly submission of the ECB 2 Return, certified by the designated Authorized Dealer Category I bank, to reach the central bank's statistics unit within seven working days of month end; AD Category I banks must notify their constituents. Directions are issued under the foreign exchange statutory framework.

Commercial Paper investment limit for SEBI registered foreign investors reduced, remaining funds reallocated within overall corporate debt cap.
The RBI reduced the Commercial Paper sub limit available to SEBI registered FIIs, QFIs and long term investors to USD 2 billion while retaining the overall corporate debt limit at USD 51 billion. The reduced CP sub limit remains part of the aggregate corporate debt ceiling and may be deployed for other corporate debt investments. Eligible investors include FIIs, QFIs and specified long term investors; SEBI will issue operational guidelines and all other existing investment conditions remain unchanged.

Advance authorisation treatment clarified: pre-existing authorisations exempted from sequencing and excluded from scheme entitlements.
Clarifies that Advance Authorisation and Duty Free Import Authorisation issued before August 14, 2013 are exempt from the sequencing requirement; imports under AA/DFIA are outside the 20:80 mechanism and accounted separately without conferring further import entitlements. Nominated agencies may supply gold to Replenishment Scheme exporters and import for that purpose, with such imports separately accounted. From the third lot onwards, permissible import quantity is the lesser of five times the exports proved or the quantity permitted in the first or second lot. Refiners may import a prescribed proportion of licence for the initial months and DGFT may notify additional refiners and quotas.

FDI reporting requirement revised: amended FC-GPR mandates Brownfield/Greenfield status and investee incorporation date disclosure.
Form FC-GPR has been revised to require Indian companies to report, within the prescribed reporting timeframe, details of consideration received for issuance of shares and convertible debentures and to capture explicitly whether the investment is Brownfield or Greenfield and the investee company's date of incorporation.

Foreign investment cap in insurance set under automatic route with IRDA licensing and regulatory compliance requirements updated policy
The amendment replaces paragraph 6.2.17.7 to permit foreign investment in specified insurance-sector activities under the automatic route, subject to IRDA licensing. It applies banking-sector conditions to bank-promoted insurers, defines an Indian insurance company by Companies Act formation, aggregate foreign equity limits and single-purpose life or reinsurance activity, and incorporates IRDA regulations governing brokers, TPAs and surveyors. The decision takes immediate effect.

Export data reporting centralization requires banks to use a single RBI platform for daily reporting and real-time monitoring.
A centralized Export Data Processing and Monitoring System (EDPMS) requires Category I Authorised Dealer banks to report all export-related returns through a single RBI-hosted platform, consolidating existing returns and ingesting primary export data from Customs, SEZ and STPI sources to enable daily download/upload, real-time database updates and streamlined follow-up with exporters.

Third party payments allowed with documentary evidence; banks must verify bona fides and follow FATF guidance.
The tripartite agreement requirement for third party payments need not be insisted upon if documentary evidence explaining the circumstances or naming the third party in the irrevocable order/invoice is produced. AD banks must be satisfied as to the bona fides of the transaction and export documents (invoice/FIRC) and consider FATF statements when processing such transactions; the prior monetary limit on third party payments for imports is withdrawn and other existing conditions continue to apply.

Foreign investment sub-limit in government securities increased for SEBI-registered long term investors, subject to existing regulatory conditions.
The sub-limit for SEBI-registered long term investors - including sovereign wealth funds, multilateral agencies, pension, insurance and endowment funds and foreign central banks - for investments in Government dated securities on a repatriation basis is increased within the overall foreign investment ceiling, subject to existing terms, conditions and limits under the Foreign Exchange Management Regulations and related directions; operational guidelines will be issued by the securities regulator and all other investment conditions remain unchanged.

Line of Credit conditions: Exim Bank credit to Vietnam requires majority Indian content and FEMA compliance.
Exim Bank's Line of Credit to Vietnam finances eligible Indian exports for two projects, requiring at least 75% of the contract price to be supplied from India and permitting up to 25% of non consultancy goods and services to be procured abroad. The Credit Agreement is effective from December 27, 2013, with specified deadlines for opening Letters of Credit and disbursements for project and supply contracts; shipments must be declared on GR/SDF Forms. No agency commission is payable under the LOC, though exporters may pay commission from own resources or EEFC balances subject to realization and prevailing instructions.

KYC authorisation change: corporates may use MD/CFO signed official lists instead of board resolutions for forex transactions.
The requirement for corporates to submit a Board resolution and a power of attorney for forex transactions has been replaced: a corporate may now submit a list of officials with names, designations and signatures authorised by the Managing Director or Chief Financial Officer to conduct foreign exchange transactions; franchisers remain responsible for ensuring agents and franchisees comply; corporates must pay the rupee leg of forex transactions through the corporate cheque or bank account; other instructions remain unchanged under FEMA and PMLA.

Remittance through any bank permitted: foreign investors may route funds to designated custodian; KYC and FIRC required.
Foreign investors may remit funds through any bank for permitted transactions and transfer those funds to the designated custodian bank via the banking channel. The remittance receiving bank and the beneficiary bank share joint KYC responsibility: the first bank holds remitter and purpose details while the receiving bank holds recipient information. The remittance receiving bank must issue a Foreign Inward Remittance Certificate (FIRC) to the bank receiving the proceeds. Prior circular conditions on hedging of investments apply mutatis mutandis and statutory permissions under foreign exchange law remain applicable.

Merchanting trade rules require same bank routing, document verification, earmarked advances, credit facilities, and strict reporting.
Revised guidelines require AD Category I banks to route both export and import legs of merchanting or intermediary trade transactions through the same bank, verify transactional documents for genuineness, complete transactions within prescribed timeframes, permit short term supplier's or buyer's credit and export LC discounting, ensure one to one matching and trader capability, hold and earmark advance export receipts, secure import advances by reputable bank guarantees, and file gross reporting for R returns with half yearly default reporting to the Reserve Bank under FEMA.

Exchange rate for conversion of foreign currency liabilities into equity clarified: use rate on agreement date; fair value at conversion.
Where an Indian company converts a foreign currency liability into equity, the rupee equivalent shall be calculated by applying the exchange rate prevailing on the date of the agreement; the borrower may, by mutual agreement with the non resident, issue shares for a lower rupee amount, and the fair value of the equity is to be determined with reference to the date of conversion. The same principle applies, mutatis mutandis, to conversion of lump sum fees, royalties and similar payables into equity or securities.