The RBI circular dated May 21, 2024, addresses the issuance of ...

RBI allows issuance of partly paid units to non-residents by investment vehicles under FEM Non-debt Instruments Rules.

Circulars     FEMA

May 25, 2024

The RBI circular dated May 21, 2024, addresses the issuance of partly paid units to non-residents by investment vehicles as per the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. The rules were amended in 2024 to allow such issuances. Alternative Investment Funds that issued partly paid units to non-residents before the amendment can regularize the same through compounding under the Foreign Exchange Management Act, 1999. AD Category-I banks must ensure necessary administrative actions, reporting through FIRMS Portal, and issue conditional acknowledgments before seeking compounding from the RBI. The circular is issued u/s 10(4) and 11(1) of the Foreign Exchange Management Act, 1999, and does not affect compliance with other laws.

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