This Notification No. RBI/2015-16/371 dated April 13, 2016 is issued by the Reserve Bank of India (RBI), for providing the clarification on Acceptance of Deposits by Indian Companies from a person Resident outside India for Nomination as Director under Section 160 of Companies Act, 2013.
1. The RBI has notified as per Regulation 3 of the Foreign Exchange Management (Deposit) Regulations, 2016 vide notification No. FEMA 5(R)/2016-RB dated April 1, 2016, that a person resident in India shall not accept or make any deposit with a person resident outside India.
2. Further as per Section 160 of the Companies Act, 2013, a person who intends to nominate himself or any other person as a Director in an Indian Company, is required to deposit an amount of Rs. 1,00,000/- with the said Company.
3. Vide this Notification RBI has further clarified that Deposit received from a person resident outside India under Section 160 of Companies Act, 2013 is a current account (payment) transaction and on receiving such amount, no RBI approval is required. Further if refund is made, in case of selection of person as Director or getting more the 25% votes, shall be refunded without approval.
For further information please find the attached Notification.
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