What changed
RBI has discontinued the return 'Details of guarantee availed and invoked from non-resident entities' with effect from the quarter ending June 2022. This follows a prior circular (February 2022) that had proposed this discontinuation and promised a future effective date. The relevant Master Directions on ECB, trade credits, and FEMA reporting are being updated to reflect this change.
What it means for you
Banks and ADs are relieved from submitting a specific quarterly return on non-resident guarantees issued and invoked for fund and non-fund based facilities between Indian residents. This reduces reporting burden and simplifies compliance under FEMA. However, all other reporting obligations and underlying regulatory requirements remain unchanged.
What you must do
- Stop filing the quarterly return 'Details of guarantee availed and invoked from non-resident entities' from the quarter ending June 2022 onwards.
- Update internal reporting checklists and compliance calendars to remove this return.
- Inform your constituents (corporate clients, branches) about this discontinuation as advised by RBI.
- Monitor RBI's Master Direction updates for formal incorporation of this change.
Who it affects
AD Category I banks, Authorised Persons handling FEMA reporting, Corporate entities that previously submitted guarantee details through banks
Which specific return has been discontinued?
The return titled 'Details of guarantee availed and invoked from non-resident entities' has been discontinued. This was previously required under Part X of the Master Direction on FEMA reporting.
From when is this discontinuation effective?
It is effective from the quarter ending June 2022. So the return for that quarter and all future quarters is no longer required.
Do we need to update any Master Directions or circulars?
RBI has stated that the relevant Master Directions (ECB, trade credits, and FEMA reporting) are being updated. Banks should track these updates but no immediate action is needed beyond stopping the return.