Panama Papers: RBI concerned over delay in reporting of overseas investments

Indian Party (IP)/Resident Individual (RI) which has made an overseas direct investment has the obligation to submit an Annual Performance Report to the RBI by June 30 every year.

By: PTI | Mumbai | Published: April 13, 2016 10:17 pm
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Amid the controversy generated by ‘Panama Papers’, the RBI on Wednesday expressed concerns over delay in reporting of overseas investments by Indians and asked banks to ensure that FEMA regulations are complied with.

Indian Party (IP)/Resident Individual (RI) which has made an overseas direct investment has the obligation to submit an Annual Performance Report to the RBI by June 30 every year.

Watch | Explained: What Do The Panama Papers Reveal

However, RBI said: “IP/RI are either not regular in submitting the APR or are submitting it with delay…”.

It further observed that remittance (s) and other forms of financial commitment are often facilitated by the bank under automatic route even though APRs with have not been submitted.

This is in “contravention” of FEMA regulations, the RBI said adding “any non-compliance with the instruction relating to submission of APR shall be treated as contravention of (FEMA) Regulation…and viewed seriously”.

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Panama Papers disclosed a list of nearly 500 Indians, including celebrities and industrialists, who allegedly stashed money in offshore entities in Panama, considered to be a tax haven.

The Centre has set up a multi-agency group comprise various government agencies – the CBDT, FIU, FT&TR (Foreign Tax and Tax Research) and RBI – to continuously monitor information in the wake of Panama Papers.

RBI further said that in order to provide banks greater capability to track submission of APRs and also improve compliance level in the matter of submission the IPs/RIs the online OID application has been suitably modified.

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Further, certification of APRs by the statutory auditor or chartered accountant need not be insisted upon in the case of resident individuals, it said and added self-certification may be accepted.

RBI has also introduced a new reporting format for Venture Capital Fund (VCF)/Alternate Investment Fund (AIF), Portfolio Investment and overseas investment by Mutual Funds.

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