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August 2016

A. P. (DIR Series) Circular No. 77[2]/10[R] dated June 23, 2016

By Gaurang Gandhi, Chartered Accountant
Reading Time 1 mins
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Given below are the highlights of certain RBI Circulars & Notifications

Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015

This circular permits as under: –

1. An Indian start-up (as defined vide Notification No. GSR 180(E) dated February 17, 2016 issued by DIPP) having an overseas subsidiary can: –

a) Open a foreign currency account with a bank outside India for the purpose of crediting to the account the foreign exchange earnings out of exports / sales made by it or its overseas subsidiary. The balances held in such accounts, to the extent they represent exports from India, shall be repatriated to India within the period prescribed for realization of exports.

b) Credit payments received by it in foreign exchange against sales / exports made by it or its overseas subsidiaries to its EEFC account maintained in India.

2. Any insurance / reinsurance company registered with the Insurance Regulatory and Development Authority of India (IRDA) can open a foreign currency account with a bank outside India to carry out insurance / reinsurance business.

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