MANU/APDR/0010/2021
Ministry : Reserve Bank of India
Department/Board : Financial Markets Regulation Department
Circular No. : A. P. (DIR Series) Circular No. 04
RBI/2021-2022/38
Date : 12.05.2021
To
All Category-I Authorised Dealer Banks
Madam/ Sir
Sponsor contribution to an AIF set up in overseas jurisdiction, including IFSCs
Attention of AD Category - I banks is invited to paragraph A.3.(e) and B.6 of Master Direction No.15 dated January 1, 2016, on "Direct Investment by Residents in Joint Venture (JV) / Wholly Owned Subsidiary (WOS) Abroad", as amended from time to time and Regulation 7 of the Notification FEMA 120/2004-RB, pertaining to provisions for an Indian Party (IP) making investment/ financial commitment in an entity engaged in the financial services sector.
2. It has been decided that any sponsor contribution from a sponsor IP to an Alternative Investment Fund (AIF) set up in an overseas jurisdiction, including International Financial Services Centres (IFSCs) in India, as per the laws of the host jurisdiction, will be treated as Overseas Direct Investment (ODI). Accordingly, IP, as defined in regulation 2(k) of the Notification ibid. can set up AIF in overseas jurisdictions, including IFSCs, under the automatic route provided it complies with Regulation 7 of the
Notification FEMA 120/2004-RB.
3. All the other provisions under the Notification ibid. shall remain unchanged. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
4. The