Whenever foreign investors subscribe to an issue of shares by an Indian company, there are certain reporting requirements that need to be complied with. In terms of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, the reporting obligations arise at two stages: (i) within 30 days of receipt by the amount of consideration by the Indian company; and (ii) within 30 days of issue and allotment of the shares. The latter reporting requirement is satisfied through the filing of Form FC-GPR to the Regional Office of the Reserve Bank of India (RBI).
By way of a circular issued on May 30, 2008, the RBI has issued a revised format for the Form FC-GPR that incorporates substantial know-your-customer (KYC) norms. Companies are now required to follow this new format while filing Form FC-GPR with the RBI.
The Economic Times has this report that explains the possible rationale for the recent changes imposed by the RBI.