RBI Update - Modification of Returns / Reporting requirements under FEMA, 1999

The Reserve Bank of India has issued revised reporting requirements under the Foreign Exchange Management Act, 1999, effective immediately, with the objective of rationalising reporting obligations and simplifying compliance for Authorised Persons. The revised framework introduces updated reporting formats, including a modified FLM-8 return that will now capture details of write-off of foreign currency notes, while discontinuing the requirement to obtain prior RBI approval for write-offs exceeding USD 2,000. Entities maintaining Nostro accounts and reporting relevant transactions through FETERS have been exempted from filing FLM-8 returns. Further, Authorised Persons with franchisee arrangements and Indian Agents operating under the Money Transfer Service Scheme (MTSS) are required to submit quarterly lists of franchisees and sub-agents, respectively, within 15 days from the end of each calendar quarter. The RBI has also discontinued several reporting requirements, including FLM-1 to FLM-7 registers, the quarterly statement relating to foreign currency accounts opened from export proceeds of foreign currency notes or travellers’ cheques, separate reporting of additional MTSS locations and related confirmations, and the MTSS collateral statement, while continuing to require maintenance of adequate records and collateral in accordance with extant regulations. These changes are aimed at reducing compliance burden while ensuring the availability of necessary supervisory information.