What changed
The Master Direction was updated as on April 1, 2026, and November 28, 2025, consolidating all prior circulars on overseas investment. It aligns with the Foreign Exchange Management (Overseas Investment) Rules, 2022, and Regulations, 2022, and includes reporting instructions referenced in Master Direction No. 18.
What it means for you
Banks must ensure compliance with the updated rules for processing overseas investments by Indian entities and individuals. The direction clarifies exemptions, approvals, pricing, and reporting requirements, reducing ambiguity for lenders. AD Category-I banks are responsible for disseminating these instructions to customers and ensuring accurate online reporting.
What you must do
- Review the updated Master Direction and ensure your bank's internal policies align with the latest provisions.
- Train staff handling overseas investment transactions on the new definitions, exemptions, and procedural requirements.
- Update customer communication materials to reflect the current rules for overseas investment applications.
- Verify that your bank's online reporting system for overseas investments is compliant with Part VIII of Master Direction No. 18.
Who it affects
AD Category-I banks, Indian entities making overseas investments, Resident individuals investing abroad, Authorised Persons under FEMA
What is the effective date of this Master Direction?
The Master Direction was issued on July 24, 2024, and updated as on April 1, 2026, and November 28, 2025.
Does this direction apply to all overseas investments?
It applies to overseas investments by persons resident in India, subject to exemptions and approvals as specified in the OI Rules and Regulations.
What are the key responsibilities for AD banks under this direction?
AD banks must process overseas investment requests in compliance with the rules, ensure proper reporting, and bring the contents to the notice of their customers.