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Master Circular on Foreign Investment in India (2012-13)

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2012-13/15 · issued 01 Apr 2013 · ~2 min read

Quick answerRBI consolidated all foreign investment rules—FDI, FII, NRI, venture capital—into one master circular effective July 2, 2012, with a one-year sunset clause. It covers entry routes, pricing, reporting, and partnership investments. Banks must ensure compliance with updated FEMA provisions.

What changed

RBI issued Master Circular No.15/2012-13 consolidating all prior circulars on foreign investment under FEMA 1999, including FDI, Portfolio Investment Scheme, foreign venture capital, and investments in partnership firms. The circular includes a sunset clause, standing withdrawn on July 1, 2013, to be replaced by an updated version.

What it means for you

For banks, this circular simplifies compliance by providing a single reference document for foreign investment rules, reducing the need to track multiple circulars. It reinforces existing pricing, reporting, and sectoral limit requirements, and clarifies procedures for escrow accounts, pledge of shares, and remittance of sale proceeds. Banks must ensure their systems align with the consolidated framework.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Update internal compliance manuals to reference this master circular for all foreign investment transactions.
Train staff on the consolidated entry routes, pricing guidelines, and reporting requirements for FDI and PIS.
Verify that customer documentation for foreign investments adheres to FEMA 20/2000-RB and FEMA 24/2000-RB as amended.
Monitor sunset clause: prepare for the updated circular expected by July 1, 2013.

Who it affects

Category-I Authorised Dealer banks, Banks handling FDI and FII transactions, Banks dealing with NRI investments under PIS, Banks facilitating foreign venture capital investments

❓ Common questions

Regulatory timeline

Stated effective date effective July 2, 2012
Decoded by BankPulse 2026-06-18 19:23 IST
Status change: withdrawn 03 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this master circular introduce any new foreign investment rules?

No, it consolidates existing rules from earlier circulars and notifications under FEMA 1999. No new substantive requirements are added.

What is the sunset clause mentioned in the circular?

The circular is valid only until July 1, 2013, after which it will be withdrawn and replaced by an updated master circular on the same subject.

Does this circular cover investments in partnership firms?

Yes, Part II of the circular specifically addresses investment in partnership firms and proprietary concerns by non-residents, governed by FEMA 24/2000-RB.

📜 Read the original circular — full text as issued by RBI

RBI/2012-13/15
 Master Circular No.15/2012-13
 (Updated as on April 01, 2013)
 July 02, 2012
 To,
 All Category - I Authorised Dealer banks
 Madam / Sir,
 Master Circular on Foreign Investment in India
 Foreign investment in India is governed by sub-section (3) of Section 6 of the Foreign Exchange Management Act, 1999 read with Notification No. FEMA 20/2000-RB dated May 3, 2000 , as amended from time to time. The regulatory framework and instructions issued by the Reserve Bank have been compiled in this Master Circular . The list of underlying circulars/notifications is furnished in Appendix. In addition to the above, this Master Circular also covers the area of ‘ Investment in capital of partnership firms or proprietary concern ’ which is regulated in terms of Section 2(h) of Section 47 of Foreign Exchange Management Act, 1999, read with Notification No. FEMA 24/2000-RB dated May 3, 2000 .
 2. This Master Circular is being issued with a sunset clause of one year. This circular will stand withdrawn on July 1, 2013 and be replaced by an updated Master Circular on the subject.
 Yours faithfully,
 (Rudra Narayan Kar)
 Chief General Manager
 INDEX

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/15 · issued 01 Apr 2013. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7355&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.