The Reserve Bank of India (RBI) on October 20, 2023, issued the Foreign Exchange Management (Debt Instruments) (Second Amendment) Regulations, 2023 to further amend the Foreign Exchange Management (Debt Instruments) Regulations, 2019.
The following amendments have been stated:
• Amendment to Schedule 1, which states “Purchase and sale of debt instruments by a person resident outside India”:
(i) In paragraph 1 of Schedule 1, after sub-paragraph D, the following new sub-paragraph has been inserted:
“E. Permission to persons resident outside India maintaining rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016
The person who resident outside India and maintains 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, after clause (4) the following new clause has been inserted:
“(4A) the amount of consideration for purchase of dated Government Securities/treasury bills by person’s 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, 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.”
This notification will come into force from October 20, 2023.
[Notification No FEMA.396(2)/2023-RB]
