What changed
The FC-TRS form and the consolidated monthly statement proforma for reporting inflows/outflows from sale transfers of equity instruments have been revised. A new requirement mandates that the FC-TRS form must be submitted to the AD Category-I bank within 60 days from the date of receipt of consideration. Additionally, a KYC check (in a specified format) must be performed by the remittance-receiving AD bank at the time of fund receipt, and if different from the transaction-handling bank, the KYC report must be provided to the latter.
What it means for you
Banks must update their internal systems to capture the revised FC-TRS format and the new 60-day submission timeline. The KYC check requirement adds an extra compliance layer, especially when remittance and transaction handling are done by different AD branches. Lenders facilitating FDI transfers need to ensure timely submission and proper documentation to avoid regulatory gaps.
What you must do
- Update internal forms and systems to use the revised FC-TRS format (Annex I) and the modified consolidated monthly statement proforma (Annex III).
- Implement a process to track and enforce the 60-day submission deadline for FC-TRS from the date of receipt of consideration.
- Ensure that the remittance-receiving AD bank conducts KYC checks using the specified format (Annex II) and shares the report with the transaction-handling AD bank if different.
- Train staff on the new reporting timeline and KYC requirements for FDI sale transfers.
Who it affects
AD Category-I banks handling FDI transfer transactions, Investee companies recording share transfers to non-residents, Transferors/transferees resident in India involved in sale of equity instruments to non-residents
What is the new deadline for submitting FC-TRS after receiving consideration?
The FC-TRS form must be submitted to the AD Category-I bank within 60 days from the date of receipt of the amount of consideration.
Who is responsible for the KYC check when the remittance-receiving bank is different from the transaction-handling bank?
The remittance-receiving AD bank must perform the KYC check and provide the KYC report to the customer, who then submits it to the AD bank handling the transfer transaction along with the FC-TRS form.
Does the 60-day rule apply if the non-resident acquirer defers payment?
Yes, but only after full and final payment is received. Prior RBI approval is required for deferment, and the FC-TRS must be submitted within 60 days from the date of receipt of the full consideration.