The Reserve Bank of India (RBI) has notified the amendment to the Foreign Exchange Management (Debt Instruments) Regulations, 2019 (Principal Regulation) vide notification no. FEMA.396(2)/2023-RB issued on 21st October 2023, in relation to the NRIs’ payment of purchase of dated government securities from the rupee accounts.
These Regulations shall be called the Foreign Exchange Management (Debt Instruments) (Second Amendment) Regulations, 2023 and came into force on October 21st 2023.
Amendment to Schedule 1 to the Principal Regulation
(i) In paragraph 1 of Schedule 1 to the Principal Regulation, after subparagraph D, the following new subparagraph shall be inserted:-
“E. Permission to persons resident outside India maintaining rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016
Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities/treasury bills, as per terms and conditions specified by the Reserve Bank.”
(ii) In paragraph 2 of Schedule 1 to the Principal Regulation, after clause (4) the following new clause shall be inserted: –
“(4A) The amount of consideration for purchase of dated Government Securities/treasury bills by persons resident outside India in terms of sub-paragraph (E) of paragraph 1 of this Schedule shall be paid out of funds held in their rupee account maintained in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016.”
(iii) In paragraph 4 of Schedule 1 to the Principal Regulation, after clause (2) the following new clause shall be inserted: –
“(2A) The sale/ maturity proceeds (net of taxes, as applicable) of instruments held by persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 shall be credited to the said rupee account.”
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