The Reserve Bank of India (“RBI”) has replaced the email-based reporting system for submission of the Foreign Liabilities and Assets (“FLA”) return with a new web-based system online reporting portal. The change has been notified by the RBI in a Circular dated June 28, 2019. The circular is effective immediately and is applicable for reporting of information for the year 2018-19 by July 15, 2019.
Background:
The RBI had stipulated that all Indian companies which have received Foreign Direct Investment (“FDI”) and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year, should file the annual return on FLA in the soft form which can be duly filled-in, validated and sent by e-mail to the RBI by July 15 of every year.
Subsequent circulars enhanced the coverage to reporting of inward and outward foreign affiliate trade statistics (“FATS”) and reporting by the limited liability partnerships (LLPs).
Now to facilitate data submission by eligible entities including the alternative investment funds (“AIF”) registered with the Securities and Exchange Board of India (“SEBI”) as also the reporting of foreign investment in the form of capital/profit share contribution received/transferred in case of LLPs and investment by persons resident outside India in an investment vehicle, the RBI has introduced the web-based system online reporting portal and done away with the email base reporting system. The new system will enhance the security-level in data submission and further improve the data quality.
Under the present revised Foreign Liabilities and Assets Information Reporting (“FLAIR”) system:
- RBI would provide a web-portal interface https://flair.rbi.org.in to the reporting entities for submitting “User Registration Form”. The form contains entity identification and business user details, and LLPs and AIFs will no longer be required to use dummy CIN. The successful registration on web-portal will enable users to generate RBI-provided login-name and password for using FLA submission gateway and would include system-driven validation checks on submitted data.
- The form will seek investor-wise direct investment and other financial details on fiscal year basis as hitherto, where all reporting entities are required to provide information on FATS related variables. Earlier, this was mandatory only for subsidiary companies. The revised form also seeks information on first year of receipt of FDI or Outward Direct Investment (“ODI”) and disinvestment.
- Reporting entities will get system-generated acknowledgement receipt upon successful submission of the form.
- Reporting entities can revise the data, if required, and view/download the information submitted.
- Entities can submit FLA information for earlier year/s after receiving RBI confirmation on their request email.
- The existing mechanism of email-based submission of FLA forms will be discontinued.
A non-compliance with the above revised system will be treated as a non-compliance with Foreign Exchange Management Act, 1999.
Source: Reserve Bank of India
