Foreign Exchange Management (Deposit) (Amendment) Regulations, 2012

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..... o. FEMA 5/2000-RB dated May 3, 2000 ) namely: 1. Short Title Commencement: - (i) These Regulations may be called the Foreign Exchange Management (Deposit) (Amendment) Regulations, 2012. (ii) They shall be deemed to have come into force from May 2, 2011. 2. Amendment of the Regulations:- In the Foreign Exchange Management (Deposit) Regulations, 2000 ( Notification No. FEMA.5/2000-RB dated May 3, 2000 ). (i) in Regulation 5, after sub-regulation (2A) , the following shall be added:- "(2B) Resident or Non-resident acquirers may, subject to the terms and conditions specified in Schedule 9, open, hold and maintain Escrow Account with Authorised Dealers in India without prior approval of the Reserve Bank, towards paymen .....

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..... 2B) of Regulation 5) Terms and conditions for opening of Escrow Account 1. The Escrow account in INR would be maintained only with an AD Category-I bank in India as Escrow agent. The Escrow account may be opened jointly and severally. Further, securities kept/linked with such Escrow accounts may be linked with demat account maintained with SEBI authorised Depository Participants as Escrow agents. 2. The account shall be non-interest bearing. 3. No fund or non-fund based facilities would be permitted against the balances in the Escrow account. 4. Permitted credits: (i) Receipt of foreign inward remittance as consideration towards issue or transfer of shares through normal banking channels; or (ii) Receipt of rupee .....

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..... account on being satisfied with the bona fides of such remittances. 9. The Escrow account shall remain operational for a maximum period of six months only and the account shall be closed immediately after completing the requirements as outlined above or on completion of six months from the date of opening of such account, whichever is earlier. In case the Escrow account is required to be maintained beyond six months, specific permission from the Reserve Bank has to be sought. 10. Requirement of compliance with KYC guidelines issued by the Reserve Bank/SEBI shall rest with the AD Category-I bank/SEBI authorised Depository Participants. 11. The terms of the Escrow account shall be laid down strictly in the Escrow agreement, Share .....

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