High court judgement and RBI's Circular- BizBasket's view

Dear Speak Asians,

As everyone remember there was a very critical judgment passed by the honorable Bombay High Court in the favor of SAOL (for detail please go through BizBasket's previous post) on 14/07/2011. The judgment was, court directing RBI to give SAOL a chance for representation.

Now a very important circular which the RBI issued immediately on next day i.e. 15/07/2011 (to read the circular please click here )

We want you to go through the following three points of the circular very carefully:

1. It has come to the notice of the Reserve Bank that certain BOs / LOs established by the foreign NGOs, NPOs, news agencies and other foreign entities are continuing to function in India, without the approval of the Reserve Bank, after the Foreign Exchange Management Act (FEMA), 1999 came into force from June 1, 2000. Under the provisions of FEMA, 1999, ibid, the request of such entities to open an office in India is considered by the Reserve Bank in consultation with the Government of India, wherever required.

2. Accordingly, the foreign entities who have established LO or BO in India and continuing to function without obtaining permission from the Reserve Bank of India should approach the Reserve Bank within a period of 90 days from the date of issue of this circular for regularization of establishment of such offices in India, in terms of the extant FEMA provisions.

3. The foreign entities who may have established LO or BO with the permission from the Government of India may also approach the Reserve Bank along with a copy of the said approval for allotment of a Unique Identification Number (UIN) by the Reserve Bank of India.

Note: As this circular is about inviting companies of foreign origin for the regularization of establishment, definitely Speak Asia Online Pte. Ltd. also falls into this category. The Company has got a chance for representation and regularizing its establishment in India. One unique fact we can observe here that the things are rolling very very fast as far as government way of working is concerned. This gives us a sure hope that the regular business activities of SAOL will start soon.