Repatriation of refund of funds received for purchase of shares
AP (DIR Series) (2002-2003) Circular No. 45, dated 12-11-2002
Under
the current exchange control regulations authorised dealers require prior
permission of the Reserve Bank to allow repatriation of funds received for
purchase of shares.
2. It has
now been decided to delegate the authority to authorised dealers to allow
repatriation of surplus funds/refund of remittance received for purchase of
shares to a person resident outside India in the following cases:
(a) Refund
of funds received towards allotment of shares under Regulation 5(1) of the
Reserve Bank Notification No. FEMA20/2000-RB dated May 3, 2000.
(b) Remittance
of surplus funds received for purchase of shares offered on rights basis.
(c) Remittance
on account of surplus funds received for purchase of shares or on account of
cancellation of trade, under Two-way fungibility of ADRs/GDRs.
3. Authorised
dealers may, accordingly allow remittances representing refund of funds
received from a person resident outside India for purchase of shares, in the
cases listed in paragraph 2 above, provided that the authorised dealers are
satisfied :
(i) with
the bona fides of the applicant;
(ii) that
the repatriation represents refund of funds received for purchase of shares, by
way of inward remittance from outside India or by debit to NRE/FCNR account
maintained with an authorised dealer in India;
(iii) that
no part of remittance represents interest on the funds received.
4. Authorised
dealers may bring the contents of this circular to the notice of their
constituents concerned.
5. The
directions contained in this circular have been issued under section 10 (4) and
section 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999).