Financial Daily from THE HINDU group of publications
Sunday, Nov 16, 2003
Financial Daily from THE HINDU group of publications Sunday, Nov 16, 2003 |
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RBI & Other Central Banks Money & Banking - RBI & Other Central Banks More freedom to set up project offices in India Our Bureau
Mumbai , Nov. 15 WITH a view to liberalising and simplifying the procedures for establishment of project offices in India, the Reserve Bank of India today issued general permission to a foreign entity for setting up a project office in India subject to the certain conditions. The conditions include: a) It (the foreign entity) has secured from an Indian company a contract to execute a project in India; and b) the project is funded by inward remittance from abroad; or c) the project is funded by a bilateral or multilateral international finance agency; or d) the project has been cleared by an appropriate authority; or e) a company or entity in India awarding the contract has been granted term loan by a public financial institution or a bank in India for the project, said the RBI notification. Following a FEMA (Foreign Exchange Management Act) amendment, the apex bank does not follow the earlier procedure of granting permission to the foreign entity on a case-by-case basis. Further, project offices established in terms of these provisions can approach the RBI for granting permission for opening foreign currency accounts furnishing information on reasons for opening a foreign currency account, the excerpts of contract of the project office concerned to ascertain whether it provides for payment/receipt of funds in foreign currency and the total amount involved therein, said the notification. The Reserve Bank has also granted general permission to foreign entities to remit the surplus on winding up/completion of projects through authorised dealers. The instructions are enforced with immediate effect, said the RBI and these have been issued under Sections 10 (4) and 11 (1) of the FEMA 1999 (42 of 1999).
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