The Reserve Bank of India (RBI) has imposed late submission fees amounting to ₹2,000 crore on four major public sector undertakings namely, ONGC Videsh Ltd, Indian Oil Corp. Ltd, GAIL (India) Ltd, and Oil India Ltd for failing to promptly report their overseas investments.
The delayed reporting has prompted RBI to take restrictive measures, affecting further remittances and transfers until the discrepancies are resolved. These includes:
Ceasing outward remittances
In response to the delayed reporting, the authorized dealer banks have been directed not to facilitate any outward remittance or financial commitments by individuals residing in India towards foreign entities until the reporting issues are regularized. This regulatory measure has raised concerns among the affected companies regarding the smooth functioning of their overseas subsidiaries.
Penalty for delayed submission has been implemented
The RBI’s Foreign Exchange Management (Overseas Investment) Regulations, 2022, clearly outline the consequences for failing to submit investment evidence within the prescribed timeframe. The late submission fee has been introduced with retrospective effect, covering a significant number of ODI (Overseas Direct Investment) remittances processed since 2000. The companies involved, including SBI, have reported all ODIs based on the documents provided by the remitting
Companies Seek Extension from RBI to Prevent Disruptions and Comply with Regulations
In an attempt to prevent operational disruptions and ensure compliance with RBI’s regulations, the companies have sought additional time from the central bank. Indian Oil Corp. executive, speaking on the condition of anonymity, emphasized their efforts to avoid any potential interruptions in operations and reiterated their commitment to reconciling the late submission fee along with the SBI ODI (Overseas Direct Investment) Cell.
Key takeaways for competitive examinations
- Biggest government company in India in terms of Revenue: Indian Oil Corporation Limited