5 January 2023
The Reserve Bank of India simplifies the reporting in Single Master Form on the FIRMS portal
The Reserve Bank of India (RBI) vide its circular RBI/2022-23/160 A.P. (DIR Series) No. 22 dated 4 January 2023 has simplified the reporting of Foreign Direct Investment (FDI) in Single Master Form (SMF) on the Foreign Investment Reporting and Management System (FIRMS) Portal.

The gist of amendments through the aforesaid circular is summarized in the below table:
Sr. No. Particulars Amendment Comments
1 Extended timeline for the Authorized Dealer (AD) banks to verify forms Under this amendment, the timeline for AD banks to verify and approve the forms has been extended to five working days of their filing. Earlier, the AD banks had only three working days to approve or reject the forms or forward them to RBI under exceptional cases. Under this circular, the timeline has been extended from three working days to five working days.

Henceforth, the AD banks will now have some additional time, i.e., five working days, to verify and respond to the forms filed on the FIRMS portal.
2 Auto computation of Late Submission Fee (LSF) The system shall automatically identify the delay in reporting and calculate the LSF.

The computed LSF amount is to be informed to the applicant and to the concerned Regional Office (RO) of RBI through email and upon payment of LSF, the concerned RO will update the status on FIRMS portal and the same will be communicated to the applicant.
Currently, the AD banks are bound to forward the delayed forms to the RBI's concerned RO, and the RO processes the form, calculates the LSF, and then approves it. This was a time-consuming and cumbersome process. The auto calculation of the delay period and LSF shall reduce human involvement, thereby drastically reducing the time required for the final approval of forms.
3 Processing the delayed forms The forms filed after the prescribed due date shall be verified and approved by the AD Banks subject to payment of LSF. Currently, the AD banks are bound to forward the delayed forms to the concerned RO of the RBI and thereafter, the RBI approves the forms.

However, this amendment empowers the AD banks to verify even the forms filed with delay and approve the same as well, reducing the time taken to approve forms. Furthermore, as the AD Banks are more approachable than RBI, it would become easy for the applicants to liaise to rectify any deficiencies in the forms.
4 Delayed forms beyond three years AD banks to approve forms filed beyond three years from the prescribed due date subject to the compounding of contravention. AD banks can now approve the forms filed beyond three years and advice for compounding such contravention. This move further streamlines the process of reporting on the FIRMS portal and will certainly curtail the turnaround time of reporting compliances.
Our Comments
The developments brought under this circular certainly aim to reduce the dependency of stakeholders on the RBI for approval of forms filed post-prescribed due date. It will increase the role and responsibility of AD banks wherein they are empowered to approve the delayed forms and advice on LSF and compounding of contravention as the case may be. At the same time, it also streamlines the reporting process with a swift response on the forms so filed on the FIRMS portal and auto-generated emails to the applicant help to keep them aware of the status at each stage. This development simplifies the overall reporting process of SMF on the FIRMS portal and its benefits can be witnessed in the coming days.
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