Almost a month ahead of union budget, Rserve Bank of India released its sixth bi-monthly Monetary Policy Statement for 2015-16 today. Merely two weeks after the launch of Startup India action plan, RBI has highlighted the steps being taken in keeping with the Government’s initiatives to promote the ease of doing business and contribute to an ecosystem conducive for growth of entrepreneurship, particularly in respect of the startups.
The statement issued by RBI said,
These measures are aimed at creating an enabling framework for receiving foreign venture capital, differing contractual structures embedded in investment instruments, deferring receipt of considerations for transfer of ownership, facilities for escrow arrangements and simplification of documentation and reporting procedures.
RBI has proposed following regulatory changes for easing the cross-border transactions, particularly relating to the operations of the start-up enterprises, in consultation with the Government of India.
Apart from the above mentioned, following proposals are under consideration:
Issues that are permissible under the existing regime like issue of shares without cash payment through sweat equity or against any legitimate payment owed by the company remittance of which does not require any permission under FEMA and collection of payments by start-up enterprises on behalf of their subsidiaries abroad
The Reserve Bank has created a dedicated mailbox(firstname.lastname@example.org) to provide assistance and guidance to the start-up sector. Electronic reporting of investment and subsequent transactions will be made on e-Biz platform only. Submission of physical forms will be discontinued with effect from February 8, 2016.
With these steps, RBI seems to be batting for Indian startups, but with caution. The central banking institution of India will also be observing the performance of Startup India campaign to roll out the next phase of regulations/proposals for easing out things for startups and SMEs.
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