Norms for opening foreign currency accounts abroad by Indian companies eased

Mumbai, Apr 3 (PTI) Easing norms for eligible Indian companies planning overseas direct investments, the Reserve Bank of India (RBI) has said they do not require its permission to open, hold and maintain foreign currency accounts abroad. "To provide operational flexibility to the Indian party, it has been decided to liberalise the regulations pertaining to opening or holding or maintaining the foreign currency account (FCA) by Indian party outside India," the country's central bank said Monday. Earlier, the RBI permission was required to open, hold and maintain FCA in a foreign country for overseas direct investments in case the regulation of that nation required FDI is to be made through a particular account. However, other provisions regarding such accounts has not been changed. The RBI statement further said that the remittances sent by an Indian company to the FCA held abroad should be utilised only for overseas direct investment into the joint venture (JV) or wholly-owned subsidiaries (WOS). Besides, the amount received in the account by way of dividend or other entitlements from the subsidiary should be repatriated to India within 30 days, it said. The Indian company, the RBI said, should submit the details of debits and credits in the FCA on yearly basis to the bank concerned with a certificate from the statutory auditors, certifying that the FCA was maintained as per the host country laws and India's FEMA (Foreign Exchange Management Act) regulations. "The FCA so opened shall also be closed immediately or within 30 days from the date of disinvestment from JV or WOS or cessation thereof," RBI said. PTI