Page 60 - Banking Finance June 2024
P. 60
RBI CIRCULAR
RBI
CIRCULAR
Issuance of partly paid units to persons cular to the notice of their customers / constituents
concerned.
resident outside India by investment
4. The directions contained in this circular have been is-
vehicles under Foreign Exchange Manage- sued under sections 10(4) and 11(1) of the Foreign Ex-
ment (Non-debt Instruments) Rules, 2019 change Management Act, 1999 (42 of 1999) and are
without prejudice to permissions / approvals, if any,
May 21, 2024 required under any other law.
1. Attention of Authorised Dealer (AD) Category - I banks Banks' Exposure to Capital Market - Issue
is invited to the Foreign Exchange Management (Non-
debt Instruments) Rules, 2019, notified by the Central of Irrevocable Payment Commitments
Government on October 17, 2019, which have been (IPCs)
amended through the Foreign Exchange Management
(Non-debt Instruments) (Second Amendment) Rules, May 03, 2024
2024 vide S.O. 1361(E), dated March 14, 2024, en-
abling issuance of partly paid units to persons resident 1. Please refer to circular DBOD.Dir.BC.68/13.03.00/2011-
outside India by investment vehicles. 12 dated December 27, 2011 on Banks' Exposure to
Capital Market - Issue of Irrevocable Payment Commit-
2. In this regard, it has been decided to regularise the is-
suances of partly paid units by Alternative Investment ments (IPCs) and mailbox clarification dated Septem-
ber 11, 2012 on Applicability of Irrevocable Payment
Funds to persons resident outside India prior to the said
Commitments.
amendment through compounding under Foreign Ex-
change Management Act, 1999. However, before ap- 2. The risk mitigation measures prescribed in the afore-
proaching the Reserve Bank for compounding, AD Cat- said circular were based on T+2 rolling settlement for
egory-I banks may ensure that the necessary adminis- equities (T being the Trade day). The Stock Exchanges
trative action, including the reporting of such issuances have since introduced T+1 rolling settlement, and ac-
by Alternative Investment Funds to the Reserve Bank, cordingly the extant guidelines on issuance of IPCs by
through Foreign Investment Reporting and Manage- banks have been reviewed. Henceforth, all IPCs issued
ment System (FIRMS) Portal and issuing of conditional by custodian banks under the T+1 settlement cycle shall
acknowledgements for such reporting, is completed. comply with the following instructions:
3. AD Category-I banks may bring the contents of this cir- i. Only those custodian banks will be permitted to
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