Given below are the highlights
of certain RBI Circulars & Notifications
17. Notification No.
FEMA.387/2017-RB dated March 09, 2017
Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident outside India) (Fourth
Amendment) Regulations, 2017
This notification contains two
amendments to Notification No. FEMA 20/2000-RB dated 3rd May 2000 –
Foreign Exchange Management (Transfer or Issue of Security by a Person Resident
outside India) Regulations, 2017.
The amendments are as under: –
1. Insertion of new sub-regulations in
Regulation 2: –
(ii E) E-commerce:
a. ‘E-commerce’ means buying and selling of goods and services including
digital products over digital & electronic network.
b. ‘E-commerce entity’ means a company incorporated under the Companies
Act, 1956 or the Companies Act, 2013 or a foreign company covered under section
2 (42) of the Companies Act, 2013 or an office, branch or agency in India as
provided in Section 2 (v) (iii) of FEMA 1999, owned or controlled by a person
resident outside India and conducting the e-commerce business.
c. ‘Inventory based model of e-commerce’ means an e-commerce activity
where inventory of goods and services is owned by e-commerce entity and is sold
to the consumers directly.
d. ‘Market place model of e-commerce’ means providing of an information
technology platform by an e-commerce entity on a digital & electronic
network to act as a facilitator between buyer and seller.
2. Substitution of existing entry 16.2 in Annex
B to Schedule 1: (Table given below)
|
16.2
|
E-Commerce
|
%
of equity/FDI Cap
|
Entry
Route
|
|
16.2.1
|
B2B
E-commerce activities
|
100%
|
Automatic
|
|
|
Such
companies would engage only in Business to Business (B2B) e-commerce and not
in retail trading, inter alia implying that existing restrictions on
FDI in domestic trading would be applicable to e-commerce as well.
|
|
16.2.2
|
Market
place model of e-commerce
|
100%
|
Automatic
|
|
16.2.3
|
Other
Conditions
|
|
|
|
|
a)
Digital & electronic network will
include network of computers, television channels and any other internet
application used in automated manner such as web pages, extranets, mobiles
etc.
b)
Marketplace e-commerce entity will be
permitted to enter into transactions with sellers registered on its platform
on B2B basis.
c)
E-commerce marketplace may provide
support services to sellers in respect of warehousing, logistics, order
fulfilment, call centre, payment collection and other services.
d)
E-commerce entity providing a
marketplace will not exercise ownership over the inventory i.e. goods
purported to be sold. Such an ownership over the inventory will render the
business into inventory based model.
e)
An e-commerce entity will not permit
more than 25% of the sales value on financial year basis affected through its
marketplace from one vendor or their group companies.
f)
Goods/services made available for
sale electronically on website should clearly provide name, address and other
contact details of the seller. Post sales, delivery of goods to the customers
and customer satisfaction will be responsibility of the seller.
g)
Payments for sale may be facilitated
by the e-commerce entity in conformity with the guidelines of the Reserve
Bank of India.
h)
Any warranty /guarantee of goods and
services sold will be responsibility of the seller.
i)
E-commerce entities providing
marketplace will not directly or indirectly influence the sale price of goods
or services and shall maintain level playing field.
j) Guidelines
on cash and carry wholesale trading as given in S.No. 16.1.2 (stated above)
shall apply to B2B e-commerce activities.
Note:
FDI is not permitted in inventory based model of e-commerce.
|
|
16.2.4
|
Sale
of services through e-commerce shall be under automatic route subject to the
sector specific conditions, applicable laws/regulations, security and other
conditionalities.
|
28. A. P. (DIR Series) Circular No. 41 dated March 21, 2017 Notification
No. FEMA No.384/2017-RB dated March 17, 2017
Risk Management and Inter-bank
Dealings: Operational flexibility for Indian subsidiaries of Non-resident
Companies
This circular has amended the
provisions of Notification No. FEMA.25/RB-2000 dated May 3, 2000 dealing with
Foreign Exchange Derivatives Contracts.
This circular now permits, subject
to certain terms and conditions, a non-resident to enter into a foreign
exchange derivative contract with a bank in India to hedge an exposure to
exchange risk of and on behalf of its Indian subsidiary in respect of the said
subsidiary’s transactions.
The detailed terms and conditions,
etc. are contained in 2 Annex’s to this circular.
29. A. P. (DIR Series) Circular No. 42 dated March 30, 2017
Purchase of foreign exchange from
foreign citizens and others
This circular has withdrawn the
restrictions on purchase of foreign exchange from customers by authorised
persons and restored the position as contained in paragraph 4.4 (e) (iii) of
Annex to A.P. (DIR Series) Circular No.17 dated November 27, 2009.
The said paragraph provides as
under: –
iii) (a) Requests for payment in
cash in Indian Rupees to resident customers towards purchase of foreign
currency notes and / or Travellers’ Cheques from them may be acceded to the
extent of only US $ 1000 or its equivalent per transaction.
(b) Requests for payment in cash
by foreign visitors / Non-Resident Indians may be acceded to the extent of only
US $ 3000 or its equivalent.
(c) All purchases within one month
may be treated as single transaction for the above purpose and also for
reporting purposes.
(d) In all other cases, APs should
make payment by way of ‘Account Payee’ cheque / demand draft only.
30. A. P. (DIR Series) Circular No. 43 dated March 31, 2017
Investment by Foreign Portfolio
Investors in Government Securities
This circular has increased the
limits for investment by FPI in Central Government Securities and State
Development Loans (SDL) for the quarter April-June 2017 by Rs. 110 billion and
Rs. 60 billion respectively.
The details of the revised limits
are as under: –
|
Rs. Billion
|
|
|
Central Government securities
|
State
Development Loans
|
Aggregate
|
|
|
For all FPI – General Category
|
Additional for Long Term FPI
|
Total
|
For all FPI (including Long Term FPI)
|
|
|
Existing Limits
|
1,20
|
680
|
2,200
|
210
|
2,410
|
|
Revised limits for quarter April-June, 2017
|
1,565
|
745
|
2,310
|
270
|
2,580
|
