The RBI has released a list of terms and conditions to be met by a proprietorship concern or unregistered partnership firmbefore raising ODIs through the approval route. The five conditions highlighted are-
- The proprietorship concern or unregistered partnership firm must be classified as ‘Status Holder’ as per the Foreign Trade Policy issued by the Ministry of Commerce and Industry, Government of India from time to time,
- The proprietorship concern or unregistered partnership firm must have a proven track record, i.e., the export outstanding does not exceed 10% of the average export realisation of the preceding three years and a consistently high export performance,
- The banks dealing with such proprietorship concern or unregistered partnership firm must be satisfied that such concern or firm is KYC (Know Your Customer) compliant, engaged in the proposed business and has adequate turnover as required,
- The proprietorship concern or unregistered partnership firm has not come under the adverse notice of any Government agency like the Directorate of Enforcement, Central Bureau of Investigation, Income Tax Department, etc. and does not appear in the exporters’ caution list of the Reserve Bank or in the list of defaulters to the banking system in India, and
- The amount of proposed investment outside India does not exceed 10 per cent of the average of last three years’ export realisation or 200 per cent of the net owned funds of the proprietorship concern or unregistered partnership firm, whichever is lower.
January 22nd, 2015