Release of Foreign Exchange for Imports – Further Liberalisation: RBI vide circular RBI/2011-12/404, A.P. (DIR Series) Circular No. 82 dated 21st February, 2012 has clarified that no application is to made to AD by persons, firms and companies for payments towards imports into India as long as the exchange being purchased is for a current account transaction and the amount does not exceeds USD 5000 or its equivalent, and the payment is made by a cheque drawn on the applicant's bank account or by a Demand Draft.
Export of Goods and Services - Receipt of advance payment for export of goods Involving shipment (manufacture and ship) beyond one year: RBI vide circular RBI/2011-12/403A.P. (DIR Series) Circular No.81 dated 21st February, 2012 has permitted AD Category- I banks to allow exporters to receive advance payment for export of goods which would take more than one year to manufacture and ship and where the ‘export agreement’ provides for shipment of goods extending beyond the period of one year from the date of receipt of advance payment, permission would be granted subject to the conditions as are prescribed in this regard.
Export of Goods and Services- Simplification and Revision of Softex Procedure: RBI vide circular RBI/2011/12/400, A.P. (DIR Series) Circular No. 80 dated 15th February, 2012 has revised and simplified the Softex Procedure. As per the revised procedure, a software exporter, whose annual turnover is at least Rs. 1000 crore or who files at least 600 SOFTEX forms annually, will be eligible to submit a statement in excel format as specified to the nearest STPI. The new procedure will be effective initially in STPI Bangalore, Hyderabad, Chennai, Pune and Mumbai with effect from April 01, 2012.
- Clarification - Purchase of Immovable Property in India – Reporting requirement:RBI vide Circular RBI/2011/12/399, A.P. (DIR Series) Circular No. 79 dated 15th February, 2012 has clarified that Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India), Regulations, 2000 do not prescribe any reporting requirements for transactions where a person resident outside India who is a citizen of India or a Person of Indian Origin (PIO) as defined in Regulation 2(c) of Notification No. FEMA 21/2000-RB acquire/s immovable property in India in accordance with the provisions of the said regulations.
- Clarification - Establishment of Project Offices in India by Foreign Entities – General Permission: The Reserve Bank of India (“RBI”) vide A.P. (DIR Series) Circular No. 76, RBI/2011-12/ 392 February 09, 2012 (“2012 Circular”) has clarified on the general permission as provided for setting up of project offices in terms of Circular No. 37 dated November 15, 2003. (“2003 Circular”). As per Regulation 4 of Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000 (“FEMA 22”) no person, being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China, shall establish in India, a branch office or a liaison office or a project office or any other place of business by whatever name called, without the prior permission of the Reserve Bank. Further foreign entities intending to set up a branch office or liaison office or project office had to seek the approval of the RBI before setting up such office and the RBI granted such approval only on a case to case basis. However, under the A.P. (DIR Series) Circular No. 37 dated November 15, 2003. (“2003 Circular”) issued by the RBI, general permission was granted to foreign entities to set up a project office in India, subject to certain conditions being fulfilled therein. However it was unclear if such general permission accorded by the RBI would apply to person being citizens of countries as specified in Regulation 4. RBI in the 2012 Circular has clarified that the general permission accorded to foreign entities to set up a project office in India under the 2003 Circular is subject to the adherence to the provisions of Regulation 4 of FEMA 22 along with their specified conditions therein.
- External Commercial Borrowings – Simplification of procedure: RBI vide circular RBI/2011-12/390, A.P. (DIR Series) Circular No. 75 dated 7 th February, 2012 has decided that requests for reduction in the amount of ECB, changes in the drawdown schedule where the original average maturity period is not maintained and reduction in the all-in-cost of the ECB be approved by designated AD category-I banks subject to specified conditions.