MANU/RPRL/0053/2016
Ministry : Reserve Bank of India
Department/Board : RBI
Press Release No. : 2015-2016/1841
Date : 04.02.2016
RBI proposes Changes in Timeframe for Issue of Shares and Reporting of FDI
The Reserve Bank of India has proposed certain changes in respect of the time frame for issue of shares to align the provisions of Foreign Exchange Management Act, 1999 which requires an investee company receiving Foreign Direct Investments to issue shares within 180 days of receipt of foreign investment with the provisions of the Companies Act, 2013 and in respect of filing of report with the Reserve Bank regarding receipt of foreign investment and issue of shares and to further streamline the compliance process, as below:
S. No.
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Paragraph of Schedule 1
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Proposed Amendments
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1
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8
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Time frame for issue of shares: At the time of filing FC-GPR the investee company shall be required to submit a certificate from a practising Company Secretary/Chartered Accountant to the effect that provisions of section 42 of Companies Act, 2013 have been complied with.
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2
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9(1) (A) and
9(1) (B)
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Time frame for reporting: Delay in reporting beyond the prescribed period (30 days from receipt of funds in case of report ARF and 30 days from issue of shares in case of report FC-GPR) shall attract a penalty of one percent of the total amount of investment subject to a minimum of Rupees Five thousand and maximum of Rupees Five lakh per month or part thereof for the first six month of delay and twice that rate thereafter, to be paid online into a designated account in Reserve Bank of India.
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Any company receiving foreign investment........