The Reserve Bank of India (RBI) vide its circular RBI/2022-23/160 A.P. (DIR Series) No. 22 dated 4 January 2023 has simplified the reporting of Foreign Direct Investment (FDI) in Single Master Form (SMF) on the Foreign Investment Reporting and Management System (FIRMS) Portal.
The gist of amendments through the aforesaid circular is summarized in the below table:
| Sr. No. | Particulars | Amendment | Comments |
| 1 | Extended timeline for the Authorized Dealer (AD) banks to verify forms | Under this amendment, the timeline for AD banks to verify and approve the forms has been extended to five working days of their filing. | Earlier, the AD banks had only three working days to approve or
reject the forms or forward them to RBI under exceptional cases.
Under this circular, the timeline has been extended from three
working days to five working days. Henceforth, the AD banks will now have some additional time, i.e., five working days, to verify and respond to the forms filed on the FIRMS portal. |
| 2 | Auto computation of Late Submission Fee (LSF) | The system shall automatically identify the delay
in reporting and calculate the LSF. The computed LSF amount is to be informed to the applicant and to the concerned Regional Office (RO) of RBI through email and upon payment of LSF, the concerned RO will update the status on FIRMS portal and the same will be communicated to the applicant. |
Currently, the AD banks are bound to forward the delayed forms to the RBI's concerned RO, and the RO processes the form, calculates the LSF, and then approves it. This was a time-consuming and cumbersome process. The auto calculation of the delay period and LSF shall reduce human involvement, thereby drastically reducing the time required for the final approval of forms. |
| 3 | Processing the delayed forms | The forms filed after the prescribed due date shall be verified and approved by the AD Banks subject to payment of LSF. | Currently, the AD banks are bound to forward the
delayed forms to the concerned RO of the RBI and thereafter, the
RBI approves the forms. However, this amendment empowers the AD banks to verify even the forms filed with delay and approve the same as well, reducing the time taken to approve forms. Furthermore, as the AD Banks are more approachable than RBI, it would become easy for the applicants to liaise to rectify any deficiencies in the forms. |
| 4 | Delayed forms beyond three years | AD banks to approve forms filed beyond three years from the prescribed due date subject to the compounding of contravention. | AD banks can now approve the forms filed beyond three years and advice for compounding such contravention. This move further streamlines the process of reporting on the FIRMS portal and will certainly curtail the turnaround time of reporting compliances. |
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