Reasons for rejection of Form FCGPR
Contributed by: Nimisha Praveen
Email id: nimisha@simplybiz.in
The Form FC-GPR (Foreign Currency- Gross Provisional Return) is a form used for reporting inward remittances of foreign currency (Foreign Direct Investment) through issue of capital instruments viz. Equity shares/Compulsorily Convertible Preference Shares/Compulsorily Convertible Debentures. When an entity receives such an investment, securities are allotted to the foreign investors and the entity should file details of such allotment of shares with the Reserve Bank of India within 30 days of such allotment.
Inward Remittance of Foreign Direct Investments (FDI) by a person resident outside India is regulated by Foreign Exchange Management (Transfer or issue of security by a person resident Outside India) Regulations, 2017.
The documents required for filing Form FC-GPR form are:
- Copy of FIRC (Foreign Inward Remittance Certificate);
- Copy of KYC (Know your customer) report of the remitter;
- Declaration by authorized representative of the Indian Company as per format provided in SMF- user manual;
- Certificate by a Company Secretary as per format given in the RBI user manual stating that all requirements have been complied with;
- Valuation Report by Chartered Accountant/Merchant Banker indicating the manner of arriving at the price of the capital instruments issued to the person resident outside India;
- Copy of FIPB (Foreign Investment Promotion Board) approval, if required;
- Board resolution for the Allotment of Securities along with list of allottees;
- Letter of Debit Authorization;
- Declaration for conversion of CCPS
- Pricing guidelines declaration;
- Reasons for delay in submission, if required.
While filing Form FCGPR with the Reserve Bank of India (RBI), there are several reasons for rejection of the application. The common reasons for rejection of the same is not restricted to, but includes:
- Incomplete or Incorrect Information: Providing incomplete or inaccurate details on the form like
a. Incorrect FIRC number instead of serial number on the portal.
b. Mismatch of the details of the investor as per FIRC, KYC and SMF Form.
c. Mismatch of fair value of shares in the Form and Valuation Report.
d. Missing membership number of Chartered Accountant in Valuation Report.
e. Incomplete details regarding face value of equity shares in FC-GPR as in SMF Form.
f. Incomplete details about the terms and conditions of issue of Compulsorily Convertible Securities in the Board Resolution such as conversion price, ratio of conversion, maturity date, etc - Non-enclosure of required attachments such as
a. Delay declaration.
b. Press Note 3 by Investee and Remitter. - The valuation Report by Chartered Accountant/Merchant Banker is more than 90 days old from the date of allotment.
- The Certificate given by the Company Secretary and the enclosed Declaration by the authorized representative is not as per the latest format.
- The Certificate given by the Company Secretary is not duly signed and stamped by the Company Secretary.
It is important to stay up to date with the latest RBI regulations and guidelines and ensure that the application and supporting documents are as per the specific requirements, complete, accurate, and in compliance with all relevant laws and regulations to minimize the risk of rejection.
If you are looking for FC-GPR filing support, we can help you with the same. SimplyCorp is a solution that offers comprehensive and end-end management of Corporate Governance & Secretarial Compliances covering all stages of entity life cycle. If want to know more on the compliance requirements and outsource the same to us, please write to our Product Head – Vaishali Vohra at the mail ID vaishali@simplybiz.in or SimplyCorp@simplyBiz.in.
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