The Reserve Bank of India in its notification dated 15th June 2020 has published the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2020.
Through this amendment, Regulation 3.1 which deals with the Mode of Payment and Remittance of sale proceeds in which schedule II and schedule VIII has been substituted as follows:
Under Schedule II-Investments by Foreign Portfolio Investors, the amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in a foreign currency account and/ or a Special Non-Resident Rupee (SNRR) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016 and the sale proceeds (net of taxes) of equity instruments and units of REITs, InViTs and domestic mutual fund may be remitted outside India or credited to the foreign currency account or a SNRR account of the FPI.
Further under schedule-VII the Investment by a person resident outside India in an Investment Vehicle, The amount of consideration shall be paid as inward remittance from abroad through banking channels or by way of swap of shares of a Special Purpose Vehicle or out of funds held in NRE or FCNR. Further, for an FPI or FVCI, the amount of consideration may be paid out of their SNRR account for trading in units of Investment Vehicle listed or to be listed (primary issuance) on the stock exchanges in India.
The sale/ maturity proceeds (net of taxes) of the units may be remitted outside India or may be credited to the NRE or FCNR(B) or SNRR account, as applicable of the person concerned.
Click here to read the notification.
