Foreign Exchange Management (Permissible Capital Account Transaction) (First Amendment) Regulations, 2019

The Reserve Bank of India (RBI) on March 07, 2019, has published Foreign Exchange Management (Permissible Capital Account Transaction) (First Amendment) Regulations, 2019 in order to make amendments in FEMA (Permissible Capital Account Transactions) Regulations, 2000. The Notification will come into force on the date of publication in the Official Gazette.

The Notification has made certain amendments in Regulation 4 of FEMA (Permissible Capital Account Transactions) Regulations, 2000, which talks about the probation Clause. After Regulation 4(b), new sub-clauses are inserted as sub-regulations (c) and (d).

Regulation 4(c):  “No person resident in India shall undertake any capital account transaction which is not permissible in terms of Order S.O. 1549(E) dated April 21, 2017, as amended from time to time, of the Government of India, Ministry of External Affairs, with any person who is, a citizen of or a resident of Democratic People’s Republic of Korea, or an entity incorporated or otherwise, in Democratic People’s Republic of Korea, until further orders, unless there is specific approval from the Central Government to carry on any transaction.”

Regulation 4(d): “The existing investment transactions, with any person who is, a citizen of or resident of Democratic People’s Republic of Korea, or an entity incorporated or otherwise in Democratic People’s Republic of Korea, or any existing representative office or other assets possessed in Democratic People’s Republic of Korea, by a person resident in India, which is not permissible in terms of Order S.O. 1549(E) dated April 21, 2017, as amended from time to time, of the Government of India, Ministry of External Affairs shall be closed/liquidated/disposed/settled within a period of 180 days from the date of issue of this Notification, unless there is specific approval from the Central Government to continue beyond that period.”

[Notification No.: G.S.R.198(E).]

Click here to download the Notification.