wordpress blog stats
Connect with us

Hi, what are you looking for?

RBI sets up a dedicated helpline for startups on forex issues


The Reserve Bank of India (RBI) has set up an helpline for startups to offer guidance and assistance for undertaking cross-border transactions within the ambit of the regulatory framework.

“While seeking guidance, the enterprises should provide complete information to the Reserve Bank and mention the specific issues on which they need guidance from the Reserve Bank in relation to the Foreign Exchange Management regulations. This would enable the personnel attending the helpline to offer timely and effective information,” the RBI said in a notification.

RBI said that startups do a lot of cross border transactions especially when it comes to matters related to investment. Note that while the RBI calls it a helpline, it is an email only service. Companies can send their queries to helpstartup@rbi.org.in.

In India, all cross-border transactions are regulated by the Foreign Exchange Management Act, 1999.

It is interesting to note that the helpline for startups comes in after the RBI effectively removed foreign direct investments (FDI) restrictions for Alternative Investment Funds (AIF). Thereby downstream investments by AIFs in restricted sectors such as ecommerce can bypass FDI laws.

The RBI said that any AIFs which are sponsored or managed by an Indian resident can now be considered a domestic investment vehicle, regardless of what percentage of the AIF’s money comes from overseas funds. Venture capital firms are considered as AIFs and are regulated by the Securities Exchange Board of India (SEBI). So far, venture capital firms could not invest directly in ecommerce companies as they would violate the FDI regulations. However, VCs can invest in back-end warehousing firms which are usually listed as a seller on the market place.

Other developments in the RBI

– Earlier this month, the RBI asked all banks part of the National Financial Switch (NFS) to make changes to their ATMs so that they can allow customers to register for mobile banking. The NFS is a India’s largest network of shared and interconnected ATMs developed by the Institute for Development and Research in Banking Technology and managed by the NPCI. More on that here.

– In August, the RBI increased the cash withdrawal limits for point-of-sale machines in rural areas. The apex bank enhanced the limit for cash withdrawal at POS for debit cards and open system prepaid cards issued by banks in India from Rs 1,000 to Rs 2,000 per day in Tier III to VI centres with immediate effect.

Image source: Flickr User Philip Taylor

You May Also Like


Paytm has hived off its payment gateway business into a separate entity, Paytm Payments Gateway Service Pvt Ltd, and has infused ₹100 crore worth...


The Department for Promotion of Industry and Internal Trade (DPIIT) has forwarded complaints against Amazon and Flipkart, made by traders body Confederation of All...


Restaurant aggregator and food delivery company Zomato has raised US$660 million (over ₹4,850 crore), taking its valuation to ₹3.9 billion. CEO Deepinder Goyal tweeted...


Info Edge Venture Fund has raised ₹375 crore from MacRitchie Investments, a subsidiary of Temasek Holdings, according to a stock exchange filing. The venture...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to Daily Newsletter

    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ