MANU/APDR/0014/2016

Ministry : Reserve Bank of India

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

Circular No. : A. P. (DIR Series) Circular No. 51
                   RBI/2015-2016/318

Date : 11.02.2016

Notification/ Circulars Referred : Notification No. FEMA. 10 (R) /2015-RB dated January 21, 2016 MANU/RFEM/0006/2016

Citing Reference:
Notification No. FEMA. 10 (R) /2015-RB dated January 21, 2016 MANU/RFEM/0006/2016  Referred

To,

All Authorised Dealer Category - I Banks

Madam/Sir,

Regulatory relaxations for start-ups- Clarifications relating to acceptance of payments

Attention of Authorised Dealer Category - I (AD Category-I) banks is invited to the Foreign Exchange Management (Foreign currency accounts by a person resident in India) Regulations, 2000, notified by the Reserve Bank vide Notification No. FEMA. 10 (R) /2015-RB dated January 21, 2016, 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 start-ups, to facilitate ease of doing business, certain permissible transactions under the existing regime shall be clarified. One of the issues relate to the start-ups accepting payment on behalf of overseas subsidiaries.

3. In this connection, it is clarified as under:

a. A start-up in India with an overseas subsidiary is permitted to open foreign currency account abroad to pool the foreign exchange earnings out of the exports/sales made by the concerned start-up;

b. The overseas subsidiary of the start-up is also permitted to pool its receivables arising from the transactions with the residents in India as well as the transactions with the non-residents abroad into t........