What changed
RBI added a new item (d) in Section E and a clause in Section F of Form ODI Part I, requiring Indian parties to certify that APR for all existing JV/WOS has been submitted as per Regulation 15(iii) of FEMA Notification 120/2004. This applies when applying for new overseas direct investments under the automatic route.
What it means for you
Banks must now ensure that customers submitting Form ODI Part I for new overseas investments have filed APRs for all existing overseas entities. Non-compliance could delay or reject applications. This tightens oversight on overseas investment reporting and reduces regulatory risk for lenders.
What you must do
- Update internal checklists for Form ODI Part I to include verification of APR submission for all existing JV/WOS.
- Train staff handling ODI applications to confirm the new certification in Sections E and F.
- Advise corporate clients to maintain timely APR filings to avoid delays in new overseas investment approvals.
- Monitor compliance with Regulation 6(2)(iv) and Regulation 15(iii) during annual reviews of overseas investments.
Who it affects
AD Category I banks processing ODI applications, Indian parties with existing JV/WOS seeking new overseas investments, Compliance teams handling FEMA reporting
What is the Annual Performance Report (APR) and where is it filed?
APR is a yearly report in Form ODI Part III that Indian parties must submit to RBI through their AD bank within 60 days of the statutory period for finalizing audited accounts of their JV/WOS abroad. It is required under Regulation 15(iii) of FEMA Notification 120/2004.
Does this circular apply to all overseas investments or only new ones?
The new certification in Form ODI Part I applies when an Indian party applies for a new overseas direct investment. However, it requires that APRs for all existing JV/WOS have been submitted, so it indirectly enforces ongoing compliance.
What happens if an Indian party hasn't submitted APR for an existing JV/WOS?
The application for new overseas investment may be rejected or delayed until the APR is filed. Banks should advise clients to clear any pending APR submissions before applying.