Various reports and returns discontinued under FEMA, 1999

Recently, vide circular no. RBI/2020-21/66 dated 13

th November 2020, the Reserve Bank of India has announced the discontinuation of a total of 17 reports and returns which were earlier prescribed under the Foreign Exchange Management Act, 1999. The present article briefly explains the object of the discontinuation of reports and returns and the list of reports and returns discontinued.

The object of discontinuation of reports and returns-

As aware, there are lots of compliance involved under the Foreign Exchange Management Act, 1999. Recently, the Reserve Bank of India has decided to discontinue some of the compliances. The main objective behind the discontinuation of reports and returns is-

To improvise the ease of doing business; and
To reduce the compliance cost to some extent.

List of reports and returns discontinued-

Following tables describes/ summarizes the list of reports and returns discontinued vide circular no. RBI/2020-21/66-

Sr. No.	List of reports and returns discontinued	Corresponding reporting entity	Frequency of filing
1	Extension of Liaison Offices	AD Category-I banks	As per extension granted
2	Extension of Project Offices	AD Category-I banks	As per extension granted
3	Category wise transaction – Cases, wherein, the amount exceeds USD 5000 per transaction	AD Category-II	Monthly
4	Category wise transaction – Cases, wherein, the amount exceeds USD 25,000 per transaction	AD Category-II	Monthly
5	Statement relating to purchase transactions of USD 10,000 and above	AD Category-II and FFMCs	Monthly
6	Daily inflow and outflow of the foreign fund on account of investment by FPIs	AD banks	Daily
7	Data relating to actual inflow and outflow of remittances on account of investments by FII (i.e., Foreign Institutional Investors) in the Indian Capital market	AD Category-I banks	Monthly
8	Inflow and outflow of mutual funds by Asset Management Companies	Asset Management Companies	Quarterly
9	Inflow and outflow of remittances on account of investments and market value thereon of investments made by Foreign Venture Capital Investor	AD Category-I or Custodian banks	Monthly
10	The market value of Foreign Institutional Investors Investments in India on a fortnightly basis	AD Category-I banks	Fortnightly
11	The market value of Foreign Institutional Investors Investments in India on a monthly basis	AD Category-I banks	Monthly
12	Foreign Institutional Investors holding as a percentage of floating stock	AD Category-I banks	Monthly
13	ADR or GDR movement report	AD Category-I banks	Monthly
14	ADR or GDR monthly report of underlying shares issued, re-deposited and released	Custodian	Monthly
15	FCCB or GDR or ADR repatriation of sales proceeds of underlying shares	Custodian	Monthly
16	Monitoring of disinvestments by Overseas Corporate Bodies	AD banks	Monthly
17	Hardcopy of form DRR for issue or transfer of sponsored/ unsponsored Depository Receipts	Custodian	At the time of issue or transfer of depository receipts.

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Frequently Asked Questions

Common questions about Discontinued FEMA Reports: RBI Compliance Update.

The main objectives behind the discontinuation of 17 reports and returns by the Reserve Bank of India are to improve the ease of doing business and to reduce the compliance cost for entities under the Foreign Exchange Management Act (FEMA), 1999.

The discontinued reports and returns were primarily required to be filed by Authorized Dealer Category-I banks, Authorized Dealer Category-II banks, Foreign Exchange Management Consultants (FFMCs), Asset Management Companies, Custodian banks, and entities involved in investments by Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs).

The frequency of filing for the discontinued reports and returns varied, ranging from daily, fortnightly, monthly, quarterly, and on an as-needed basis, such as when extending the validity of Liaison Offices or Project Offices.

The discontinued reports and returns covered various types of transactions, including investments by FPIs and FVCIs, inflows and outflows of foreign funds, purchase transactions above certain thresholds, disinvestments by Overseas Corporate Bodies, and movements related to American Depository Receipts (ADRs), Global Depository Receipts (GDRs), and Foreign Currency Convertible Bonds (FCCBs).

RBI decided to discontinue these reports and returns to streamline the compliance requirements under FEMA, 1999, and reduce the administrative burden on entities involved in foreign exchange transactions, ultimately enhancing the ease of doing business.

While the discontinuation of these reports and returns may reduce the administrative burden, RBI is likely to have alternative mechanisms in place to monitor and regulate foreign exchange transactions effectively under FEMA, 1999.

The discontinuation of these 17 reports and returns is expected to reduce the compliance costs for entities involved in foreign exchange transactions, as they will no longer have to allocate resources for preparing and submitting these reports and returns.

No, the discontinuation of reports and returns applies only to the specific entities and transactions mentioned in the RBI circular. Other reporting requirements under FEMA, 1999, may still be applicable to various entities.

Given RBI's objective of improving the ease of doing business and reducing compliance costs, it is likely that the central bank will continue to review the reporting requirements under FEMA, 1999, and consider further streamlining measures in the future.

Entities with questions or concerns regarding the discontinued reports and returns or other compliance requirements under FEMA, 1999, should consult with their respective Authorized Dealer banks or seek guidance from RBI through appropriate channels.