On 02-08-2024, the Reserve Bank of India (‘RBI’) notified the Foreign Exchange Management (Debt Instruments) (Third Amendment) Regulations, 2024 to amend the Foreign Exchange Management (Debt Instruments) Regulations, 2019. They came into force on 07-08-2024.
Key Points:
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A new sub-paragraph has been added to paragraph 1 of Schedule 1 to the Principal Regulation which provides for the ‘Permission to persons resident outside India for purchase of Sovereign Green Bonds in the International Financial Services Centre in India’.
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A new clause (4B) has been added to paragraph 2 of Schedule 1 to the Principal Regulation to amend the provisions for mode of payment. This new clause states that the amount of consideration for the purchase of Sovereign Green Bonds by persons resident outside India will be paid out of inward remittance from abroad through banking channels or out of funds held in a foreign currency account maintained as per regulations issued by RBI and/or the International Financial Services Centre Authority.
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A new clause (2B) has been added to paragraph 4 of Schedule 1 to the Principal Regulation which states that the sale/maturity proceeds of instruments held by the persons resident outside India as per sub-para (F) of paragraph 1 of this Schedule may be remitted outside India.
