MANU/APDR/0013/2016

Ministry : Reserve Bank of India

Department/Board : RBI A.P. DIR (Series)

Circular No. : A. P. (DIR Series) Circular No. 52
                   RBI/2015-2016/319

Date : 11.02.2016

Notification/ Circulars Referred : Notification No. FEMA. 20/2000-RB dated 3rd May 2000 MANU/RFEM/0012/2000;Notification No. FEMA.344/2015 RB dated June 11, 2015 MANU/RFEM/0010/2015;Notification No. FEMA.315/2014-RB dated July 10, 2014 MANU/RFEM/0032/2014

Citing Reference:
Notification No. FEMA. 20/2000-RB dated 3rd May 2000 MANU/RFEM/0012/2000  Referred

Notification No. FEMA.344/2015 RB dated June 11, 2015 MANU/RFEM/0010/2015  Referred

Notification No. FEMA.315/2014-RB dated July 10, 2014 MANU/RFEM/0032/2014  Referred

To,

All Authorised Dealer Category - I Banks

Madam/Sir,

Regulatory Relaxations for Startups- Clarifications relating to Issue of Shares

Attention of Authorised Dealer Category - I (AD Category-I) banks is invited to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, notified by the Reserve Bank vide Notification No. FEMA. 20/2000-RB dated 3rd May 2000, as amended from time to time.

2. Pursuant to paragraph 14 of the Sixth Bi-Monthly Monetary Policy Statement for 2015-16, Reserve Bank of India vide Press Release dated February 2, 2016, had announced that in case of startups, certain permissible transactions under the existing regulatory framework shall be clarified. One of the issues related to issue of shares without cash payment by the investor through sweat equity or against any legitimate payment owed by the company remittance of which does not require any permission under FEMA, 1999.

3. Accordingly, the following is clarified: