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TMI BlogEstablishment of Branch (BO) / Liaison Offices (LO) in India by Foreign Entities — Delegation of PowersX X X X Extracts X X X X X X X X Extracts X X X X ..... rior approval of the Reserve Bank for establishing Branch (BO)/ Liaison Offices (LO) in India. As announced in the Mid-term Review of the Annual Policy Statement for the Year 2008-09 (para 143), the draft circulars regarding delegation of powers to Authorised Dealers for extension of the validity period of LOs, closure of BO / LOs of foreign entities in India and the eligibility criteria and procedural guidelines for BO / LOs of foreign entities in India were placed on Reserve Bank's website for public comments. On the basis of the feedback received from the public, the final guidelines have been issued vide our A. P. (DIR Series) Circular No.23 dated December 30, 2009 . 2. As indicated therein, the application in form FNC by the foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IN) will be allotted to both the existing as well as new BO / LOs. This UIN is required to be quoted in all future references made to the Reserve Bank by the BO / LO / designated AD Category - I bank. Consequent upon delegation of powers from February 01, 2010 existing BO / LO will also have to necessarily approach the Reserve Bank through their designated AD Category -I bank for their requests/references. 5. With a view to liberalizing the existing procedure in respect of BO/ LOs, it has been decided to delegate the powers to the designated AD Category - I banks, as under : i) Submission of Annual Activity Certificate At present, BO/ LOs are required to submit Annual Activity Certificate (Annex) from their Auditors to the Central Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of LO/s for a period of 3 years from the date of expiry of the original approval / extension granted by the Reserve Bank, if the applicant has complied with the following and the application is otherwise in order. The LO has submitted the Annual Activity Certificates for the previous years (initially, for existing LO, the designated AD Category-I banks may obtain confirmation from the Regional Office concerned about timely submission of the Certificate for previous years); and The account of the LO maintained with the designated AD Category - I bank is being operated in accordance with the terms and conditions stipulated in the approval. Such extension may be granted, as expeditiously as possible, say within a period of one month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz. Foreign Exchange Management (Remittance of Assets) Regulations 2000 , as amended from time to time. In terms of the aforementioned Regulation, following documents are required to be obtained by the designated AD Category - I bank, while considering the closure of the BO/ LO and permitting the remittance of winding up proceeds : A) Copy of the Reserve Bank's permission/ approval from the sectoral regulator(s) for establishing the BO / LO. B) Auditor's certificate- i) indicating the manner in which the remittable amount has been arrived at and supported by a statement of assets and liabilities of the applicant, and indicating the manner of disposal of assets; ii) confirming that all liabilities in India including arrears of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... designated AD Category - I bank to the Reserve Bank (the Regional Office concerned for LOs and Central Office for BOs), along with a declaration stating that all the necessary documents submitted by the BO / LO have been scrutinized and found to be in order. If the documents are not found in order, the AD Category - I bank may forward the application to the Reserve Bank, with their observations, for necessary action. 6. All the documents relating to the BO / LO operations may be retained by the AD Category - I bank for verification by the internal auditors of the AD / inspecting officers of the Reserve Bank. 7. Cases which are not covered under the delegated powers will continue to be referred to the Reserve Bank, by the designated AD ..... X X X X Extracts X X X X X X X X Extracts X X X X
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