THE GAZETTE OF INDIA :EXTRAORDINAKY_

__[PARTH—SEC. 3(i)]

RESERVE BANK OF INDIA

(Exchange Control Department)

(Central Office)

NOTIFICATION

Mumbai, the 1st January, 2002

Foreign Exchange Management (Transfer or Issue of any Foreign Security)

(Amendment) Regulations, 2002

G.S.R. 258(E).—In exercise of the powers conferred by clause (a) of sub-section (3) of

Section 6 and Section 47 of the Foreign Exchange Management Act, 1999, (42 of 1999), and in

partial modification ofits Notification No. FEMA. 19/RB-2000, dated May 3,2000, the Reserve

Bank of India makes the following Regulations to amend the Foreign Exchange Management

(Transfer or Issue of any Foreign Security) Regulations, 2000, as amended from time to time,

namely

(a)

These Regulations may be called the Foreign Exchange

Management

(Transfer

Issue

any

Foreign

Security)

(Amendment) Regulations, 2002.

-• i- .

m -m »— m -*• • — m- — » — — •• • M M • M • • | — ^ Mi Mi — - — — -^ — I— — •— — — - i —i • •• iH . — •• —•

(b)

They shall come into force from the date of their publication in

the Official Gazette.

In the Foreign Exchange Management (Transfer or Issue of any

Foreign Security) Regulations, 2000,

(A)

in Regulation 6, after sub-regulation (6), the following sub-

regulation shall be inserted, namely :

"(7) (a) For the purposes of investment under this Regulation by way

of remittance from India, the valuation of shares of the company

outside India shall be made, -

(i)

where the investment is more than US $ 5 (five) million, by

a Category I Merchant Banker registered with Securities

and Exchange Board of India (SEBI), or an Investment

Banker/Merchant Banker outside India registered with the

appropriate regulatory authority in the host country; and

(ii)

in all other cases, by a Chartered Accountant or a Certified

Public Accountant."

"(b)

For the purposes of investment under this Regulation by

acquisition of shares of an existing company outside India where the

consideration is to be paid fully or partly by issue of the Indian party's

shares, the valuation of shares of the company outside India shall in

all cases, be carried out by a Category I Merchant Banker registered

with the Securities and Exchange Board of India (SEBI) or an

Investment Banker/Merchant Banker outside India registered with the

appropriate regulatory authority in the host country."

(B)

in Regulation 9, after sub-regulation (2), the following sub

regulation shall be inserted, namely :

"(2A) An application made under sub regulation (2) in Form

ODI

THE GAZETTE OF INDIA. EXTRAORDINARY

[PAKTII—Sue. 3(i)]

(a) for the purpose of investment by way of remittance from

India, shall be accompanied by the valuation of shares of the company

outside India, made ~

(i)

where the investment is more than US $ 5 (five)

million, by a Category I Merchant Banker

registered

with

SEBI

Investment

Banker/Merchant Banker registered with the

appropriate regulatory authority in the host

country; and

(ii)

in all other cases, by a Chartered Accountant or a

Certified Public Accountant.

(b) for the purposes of investment by acquisition of shares of an

existing company outside India where the consideration is to be paid

fully or partly by issue of the Indian party's shares, shall be

accompanied by the valuation carried out by a Category I Merchant

Banker registered with the SEBI or an Investment Banker/Merchant

Banker registered with the appropriate regulatory authority in the host

country."

(C)

after Regulation 17B, the following Regulation shall be

inserted, namely :-

"17C A proprietary concern in India may apply to the Reserve

Bank in Form ODB for general permission valid for a period of one

year to accept shares of a company outside India in lieu of fees due to

it for professional services rendered to the said company.

Provided that :-

(a)

the value of the shares accepted from each company

outside India shall not exceed fifty percent of the fees

receivable by the Indian party from that company; and

__5

(b)

the Indian concern's share holding in any one company

outside India by virtue of shares accepted as aforesaid

shall not exceed ten percent of the paid-up capital of the

company outside India, whose shares are accepted. "

[No. FEMA 48/2002-RB]

K. J. UDESHI, Executive Director

(Administration Division)

(Official Language Cell)

NOTIFICATION

Mumbai, the 19th January, 2002

Foreign Exchange Management (Transfer or Issue of any Foreign Security)

(Second Amendment) Regulations, 2002

G.S.R 259(E).—In exercise of the powers conferred by clause (a) of Sub-section (3) of

Section 6 and Section 47 of the Foreign Exchange Management Act, 1999, (42 of 1999), and in

partial modification of its Notification No. FEMA 19/2000-RB, dated May 3, 2000, the Reserve

Bank of India makes the following Regulations to amend the Foreign Exchange Management (Transfer

or Issue of any Foreign Security) Regulations, 2000, as amended from time to time, namely :

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART II—SEC. 3(i)l

(a) These Regulations may be called the Foreign Exchange

Management (Transfer or Issue of any Foreign Security) (Second

Amendment) Regulations, 2002.

(b)

They shall come into force from the date of their publication in

the Official Gazette.

In the Foreign Exchange Management (Transfer or Issue of any

Foreign Security) Regulations, 2000, in Regulation 6, in sub-regulation (2)

in clause (I), after the proviso, the following proviso shall be added, namely:

"Provided further that the ceiling of US $ 50 million shall not apply to

financial commitment by a unit located in a Special Economic Zone where

the investment is made out of balances held in its EEFC account, maintained

in accordance with the Foreign Exchange Management (Foreign Currency

Accounts by a Person Resident in India) Regulations, 2000, as amended

from time to time.

[No. FEMA 49/2002-RB]

K. J. UDESHI, Executive Director

NOTIFICATION

Mumbai, the 20th February, 2002

G.S.R. 260(E).—In exercise of the powers conferred by clause (h) of Sub-section (2) of

Section 47 of the Foreign Exchange Management Act, 1999, (42 of 1999), and in partial modi-

fication of its Notification No. FEMA 24/2000-RB, dated May 3,2000, the Reserve Bank of

India makes the following amendment in the Foreign Exchange Management (Investment in Firm

or Proprietary concern in India) Regulations, 2000, namely:

1. (a) These Regulations may be called the Foreign Management (Investment in Firm or

Pajprijetary concern in India) (Amendment) Regulations, 2002.

(b)

They shall come into force on the date of their publication in the official Gazette.

In the Foreign Exchange Management (Investment in Firm or Proprietary concern in

India) Regulations, 2000, in Regulation 4, in the proviso, after clause (d), the following clause

shall be added,, namely :-

"(e) thejfirm or the.proprietary concern is not *nz*gi-ti in prjnt m^lia "

[No. FEMA 50/2002-RB]

K. J. UDESK, Executive Director

NOTIFICATION

Mumbai, the 27th February, 2002

Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in

India) (Amendment) Regulations, 2002

G.S.R. 261(E).—In exercise of the powers conferred by clause (b) of Section 9 and

clause (e) of sub-section (2) of Section 47 of the Foreign Exchange Management Act 1999 (42

of 1999), and in partial modification of its Notification No. FEMA. 10/2000-RB dated 3rd May

2000, the Reserve Bank of India makes the following Regulations to amend the Foreign Exchange

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART II—SEC. 3(I)1

Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2000,

namely:—

Short title and commencement

These Regulations may be called the Foreign Exchange Management

(Foreign Currency Accounts by a Person Resident in India)

(Amendment) Regulations, 2002.

ii)

They shall come into force from the date of their publication in the

Official Gazette.

Amendment to the Regulations

Amendment of the Schedule to Regulation 4 in the (Foreign Currency

Accounts by a Person Resident in India) Regulations, 2000 (hereinafter

referred to as "the said Schedule"),

In the said Schedule, the paragraph 1 (1) ()) shall be substituted by the

following :-

"Inward remittance through normal banking channel, other than the

remittance received pursuant to any undertaking given to the Reserve Bank

or which represents foreign currency loan raised or investment received from

outside India or those received for meeting specific obligations by the

account holder."

[No.FEMA51/2002-RB]

K. J. UDESHI, Executive Director

NOTIFICATION

Mumbai, the 1st March, 2002

Foreign Exchange Management (Deposit) (Amendment) Regulations, 2002

G.S.R. 262(E).—In exercise of the powers conferred by clause (f) of sub-section (3) of Section

6 and sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999, (42 of 1999) and in

partial modification of Notification No. FEMA 5/2000-RB dated May 3,2000, the Reserve Bank of India

makes the following amendments in the Foreign Exchange Management (Deposit) Regulations, 2000,

namely —

1. (i) These Regulations may be called the 'Foreign Exchange Management (Deposit)

(Amendment) Regulations, 2002.'

(ii) They ^hall come into force on 1^Bt day of April 2002.

r^,

2. In the foreign Exchange Management (deposit) Regulations, 2000,

(a) in Regulation 5,

(iliLnT^^"^

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—SEC 3(Q]

(i) in sub-regulation (1), clauses (iv) and (v) shall be omitted;

(ii) in sub-regulation (2), for the words and figures "clauses (i), (iii) and (v)",

* the words and figures "clauses (i) and (iii)" shall be substituted;

(Iii) after sub-regulation (2), the following sub-regulation shall be added,

namely:-

"(3) (a) On and from 1^st April 2002,

(i) no deposit, whether by way of renewal of existing deposit

otherwise, shall be accepted under the Non-Resident (Non-

Repatriable) Rupee Account Scheme (NRNR Account) or the Non-

Resident (Special) Rupee Account Scheme (NRSR Account);

(ii) existing deposits under the NRNR Account Scheme may be

continued only upto the date of maturity;

(iii) on maturity of the existing deposit under the NRNR Account

Scheme, the maturity proceeds shall be credited to the

accountholder's Non-Resident (External) Account (NRE Account),

after giving notice to the account holder

(b) (i) the existing account in the form of a term deposit of the

NRSR Account Scheme may be continued till the date of

maturity.

(ii) on maturity of the existing term deposit under the NRSR

Account Scheme, the maturity proceeds shall be credited to the

accountholder's

Non-Resident

(Ordinary)

Account

(NRO

Account).

(iii) existing NRSR account, other than a term deposit, shall not

be continued after 30^th September 2002 and may at the option

of the account holder, be closed or the balance therein credited

to his NRO account on or before that date.

Explanation: For the purpose of this sub-regulation, "existing deposit"

or "existing account" means a deposit or an account held on 31^st March

2002".

(b) in Schedule 4, in Paragraph 1, for the first sub-paragraph, the following sub-

paragraph shall be substituted, namely:-

"Any

person resident outside

India, (except

individuals/entities

Pakistan/Bangladesh nationality/ownership,) may open NRNR account with an

authorised dealer, provided that no such account shall be opened on and from

st April 2002, whether by renewal of existing deposit or otherwise."

paragraph shall be inserted, namely:-

"(iv) No account under NRSR Account Scheme shall be opened on and

from 1^st April 2002, whether by renewal of existing deposit or otherwise."

[No FEMA 52/2002-RB]

VEPAKAMESAM,Dy Governor

(Overseas Investment Division)

NOTIFICATION

Mumbai, the 1 st March, 2002

Foreign Exchange Managmcnt (Transfer or Issue of any Foreign Security) (Amendment) Regulations, 2002

G.S.R. 263 (E).-— In exercise of the powers conferred by clause (a) of sub-section (3) of Section A and Section 47

of the Foreign Exchange Management Act, 1999 (42 of 1999) and in partial modification of its Notification No FEMA 19/RB-

2000 dated 3rd May, 2000, the Reserve Bank of India makes the following Regulations to amend (he Foreign Exchange

Management (Transfer or Issue of any Foreign Security) Regulations, 2000 as amended from time to time, namely —

1. (a) These Regulations shall be called the Foreign Exchange Management (.Transfer or Issue of any Foreign

Security) (Third Amendment) Regulations, 2002

< V - Y

. - 1 —

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART II—SEC. 3(i)l

(b) They shall come into force from the date of their publication in the Official Gazette.

2. In the Foregin Exchange Management (Transfer or Issue of any Foreign Security) Regulations 2002,

in Regulation 6,

(a) in sub-regulation (2), in clause (I), for the words and figures "US $ 50 million", the words and figures "US $ 100

(One hundred) million", shall be substituted;

(b) in sub-regulation O), in clause (n), for the words and figures "not exceeding 25% orthc net worth", the words

and figures "not exceeding 50% of the net worth" shall be substituted

| No FEMA53/20O2-RB]

K. J UDESHI, Executive Director

NOTIFICATION

Mumbai, the 5th March, 2002

Foreign Exchange Management (Foreign Exchange Derivative Contracts)

(Amendment) Regulations, 2002

G.S.R 264 (E).— In exercise of the powers conferred by clause (h) of sub-section (2) of Section 47 of the Foreign

Exchange Management Act, 1999 (42 of 1999) and in partial modification of its Notification No FEMA. 25/RB-2O0O dated

3rd May, 2000, the Reserve Bank of India makes the following Regulations to amend the Foreign Exchange Management

(Foreign Exchange Derivative Contracts) Regulations, 2000, namely .—

2. Short title and commencement:—1 (i) These Regulations may be called the Foreign Exchange Management

(Foreign Exchange Derivative Contracts) (Amendment) Regulation, 2002.

(ii) They shall come into force from the date of their publication in the Official Gazette.

3. Amendment:—In the Foregin Exchange Management (Foreign Exchange Derivative contracts) Regulations

2000, the item (a) of Paragraph A. I of the Schedule 1 shall be substituted by the following words:

"the authorised dealer through verification of documentary evidence is satisfied about the genuineness of the

under lying exposure or as otherwise permitted by the Reserve Bank from time to time."

[No.FEMA54/2002-RB]

K J UDESHI, Executive Director

THEGAZfc.il EOF INDIA: EXTRAORDINARY

[PAR r II—SEC. 3(ij)

NOTIFICATION

Mumbai, the 7th March, 2002

G.S.R. 265(E).—In exercise of the powers conferred by clause (a) of sub-

section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act,

1999 (42 of 1999) and in partial modification of its Notification No. FEMA. 19/RB-

2000 dated 3rd May, 2000, the Reserve Bank of India makes the following

amendments to the Foreign Exchange Management (Transfer or Issue of any Foreign

Security) Regulations, 2000 as amended from time to time, namely:—

ghort title an^fl commencement: -

1. (i) These Regulations may be called the "Foreign Exchange Management

(Transfer or Issue of any Foreign Security) (Fourth Amendment) Regulations,

2002."

(ii) They shall come into force with effect from the date of their publication in

the Official Gazette.

Amendment of the Regulation*

2. In the Foreign Exchange Management (Transfer or Issue of any Foreign

Security) Regulations, 2000

(a)

in Regulation 18

(I)

for sub-regulation (2), the following Sub-Regulation shall be

substituted, namely:-

"(2) A person resident In India, being an Indian Company or a Body

Corporate created by an Act of Parliament,

(I)

may issue FCCBs not exceeding US$50 million, to a person

resident outside India in accordance with and subject to the

conditions stipulated in Schedule II;

(10

where the Issue exceeds US $50 million but does not exceed

US $100 million, may apply to the Reserve Bank in Form ECB

for permission to issue FCCBs;

(ill)

where the issue exceeds US $100 million, may apply to the

Government of India, Ministry of Finance, (Department of

Economic Affairs) for approver.

(II) in sub-regulation (3), for the words " The company/ body corporate

referred to In sub-regulation (2)", the words" The company/ body corporate

referred to In clause (III) of sub-regulation (2)^N shall be substituted;.

(b)

existing Schedule shall be re-numbered as "Schedule I",

THE GAZETTE OF INDIA EXTRAORDINARY

[PAR r II—SCL 1(I)]

(c) after Schedule I, the following Schedule shall be added, namely:-

Schedule II

See Regulation 18 (2MD

Automatic Route for Issue of Foreign Currency Convertible Bonds (FCCBt)

(i)

The FCCBs to be issued will have to conform to the Foreign Direct

Investment Policy (including Sectoral Cap and Sectors where FDI i*

permissible) of the Government of India as announced from time to

time and the Reserve Bank's Regulations/directions issued from

time to time,

(ii)

The issue of FCCBs shall be subject to a ceiling of U S $ 50 million

in any one financial year.

(iii)

Public* issue of FCCBs shall be only through reputed lead

managers in the international capital market. In case of private

placement, the placement shall be with banks, or with multilateral

and bilateral financial Institutions, or foreign collaborators, or foreign

equity holder having a minimum holding of 5% of the paid up equity

capital of the issuing company.

Private placement with

unrecognised sources Is prohibited.

Civ)

The maturity of the FCCB shall not be less than 5 years. The call &

put option, if any, shall not be exercisable prior to 5 years,

(v)

Issue of FCCBs with attached warrants is not permitted.

(vO

The "all in cost" will be 100 basis points less than those prescribed

for External Commercial Borrowing (ECB) schemes specified in the

Schedule to Notification No: FEMA 3/2000-RB dated 3^rd May 2000.

The "all In cost" shall include coupon rate, redemption premium,

default payments, commitment fees, and fronting fees, if any, but

shall not include the issue related expenses such as legal fees,

lead managers fees, out of pocket expenses.

(vii)

The FCCB proceeds shall not be used for investment in Stock

Market, and may be used for such purposes for which ECB

proceeds are permitted to be utilised under the ECB schemes.

(viii)

In case the FCCBs are issued for financing imports/foreign

exchange capital expenditure, the proceeds can be retained abroad

with the approval of the Reserve Bank of India. In all other cases,

the proceeds shall be repatriated to India immediately on

completion of issue process.

(ix)

The issue related expenses shall not exceed 4% of issue size and

in case of private placement, shall not exceed 2% of the issue size.

(x)

The issuing entity shall, within 30 days from the date of completion

of the issue, furnish a report to the concerned Regional Office of

the Reserve Bank of India through a designated branch of an

Authorized Dealer giving the details and documents as under:

(a) The total amount of the FCCBs issued,

(b) Names of the investors resident outside India and number of

FCCBs issued to each of them, and

channels and/or, duly supported by bank certificates.

[No. FEMA 55/2002-RB]

K. J. UDESHI, Executive Director

Printed by the Manager, Oovt of India Press, Ring Road, Mayapun, New Delhi-110064

and Published by the Controller of Publications, Delhi-U0054