What changed
RBI reviewed existing FEMA reporting forms and decided to discontinue 17 specific returns/reports listed in the annexure, effective November 13, 2020. The Master Direction on Reporting under FEMA (January 1, 2016) will be updated accordingly. Hardcopy filing of Form DRR is discontinued, but domestic custodians must continue electronic reporting via FIRMS.
What it means for you
Banks and authorized persons will see a reduction in monthly, fortnightly, and daily reporting burdens, lowering compliance costs. This change simplifies foreign exchange reporting, particularly for AD Category-I and II banks, FFMCs, custodians, and asset management companies. However, electronic reporting for discontinued items like Form DRR remains mandatory.
What you must do
- Update internal reporting systems to stop generating the 17 discontinued returns/reports.
- Bring the contents of this circular to the notice of constituents, including AD Category-II banks and FFMCs.
- Ensure continued electronic filing of Form DRR on FIRMS application by domestic custodians as per existing regulations.
- Review and align compliance processes with the updated Master Direction on FEMA Reporting.
Who it affects
AD Category-I banks, AD Category-II banks, Full-Fledged Money Changers (FFMCs), Custodian banks, Asset Management Companies, All authorized persons under FEMA
Which specific reports have been discontinued?
17 reports are discontinued, including monthly statements on FII/FPI investments, FVCI inflows/outflows, ADR/GDR movements, and certain transaction-based reports for AD Category-II banks and FFMCs. The full list is in the circular's annexure.
Is the hardcopy filing of Form DRR still required?
No, hardcopy filing of Form DRR is discontinued. However, domestic custodians must continue to report Form DRR electronically on the FIRMS application as per FEM (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019.
When did this change take effect?
The discontinuation is effective immediately from the date of the circular, November 13, 2020. AD banks should implement the changes without delay.