Page 55 - Banking Finance April 2020

RBI CIRCULAR

RBI

CIRCULAR

Import of goods and services- Extension of ‘Voluntary Retention Route’ (VRR) for
time limits for Settlement of import Foreign Portfolio Investors (FPIs)
payment investment in debt - relaxations

RBI/2019-20/242 RBI/2019-20/239
May 22, 2020
May 22, 2020
1. Please refer to para 5 of Statement on Developmental
and Regulatory Policies issued today. In this connection 1. Attention of Authorised Dealer Category-I (AD
the attention of Authorised Dealer Category -I banks is Category-I) banks is invited to the Foreign Exchange
invited to para B.5.1 (i) of the ‘Master Direction on Management (Debt Instruments) Regulations, 2019
Import of Goods and Services’ dated January 01, 2016 notified vide Notification No. FEMA.396/2019-RB dated
(as amended from time to time), in terms of which October 17, 2019, as amended from time to time, and
remittances against normal imports (i.e. excluding relevant directions issued thereunder. Attention is also
import of gold/diamonds and precious stones/ invited to A.P. (DIR Series) Circular No. 34 dated May
jewellery) should be completed not later than six 24, 2019 (hereinafter Directions) read with A.P. (DIR
months from the date of shipment, except in cases Series) Circular No. 19 dated January 23, 2020 and the
where amounts are withheld towards guarantee of press release dated January 23, 2020 on reopening of
performance etc. allotment of investment limit under the Voluntary
2. In view of the disruptions due to outbreak of COVID- Retention Route (VRR).
19 pandemic, it has been decided to extend the time 2. In terms of para 6(a) of Annex to the Directions, Foreign
period for completion of remittances against such Portfolio Investors (FPIs) shall invest at least 75% of
normal imports (except in cases where amounts are their ‘Committed Portfolio Size’ (CPS) within three
withheld towards guarantee of performance etc.) from months from the date of allotment. In view of the
six months to twelve months from the date of shipment disruptions caused by COVID-19, it has been decided
for such imports made on or before July 31, 2020.
to allow FPIs that have been allotted investment limits,
3. AD banks may bring the contents of this circular to the between January 24, 2020 (the date of reopening of
notice of their constituents concerned. allotment of investment limits) and April 30, 2020, an
4. The directions contained in this circular have been additional time of three months to invest 75% of their
issued under Section 10 (4) and Section 11 (1) of the CPS. For FPIs availing the additional time, the retention
Foreign Exchange Management Act (FEMA), 1999 (42 period for the investments (committed by them at the
of 1999) and are without prejudice to permissions / time of allotment of investment limit) would be reset
approvals, if any, required under any other law. to commence from the date that the FPI invests 75%
of CPS.
(Ajay Kumar Misra)
Chief General Manager-in-Charge 3. These directions are issued under sections 10(4) and
11(1) of the Foreign Exchange Management Act, 1999

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