Mumbai:
Foreign banks operating in India have now been permitted
to remit net profits / surplus (net of tax) earned on
a quarterly basis to their head offices. The remittance
can be made following quarterly audit, without prior the
Reserve Bank of India (RBI) approval.
This
move comes as a relaxation since earlier remittances to
the head offices could be sent only on an annual basis
at the close of each financial year following an audit.
According
to a notification from the RBI, the profits from the course
of business out of Indian operations may be remitted on
a quarterly basis, to head offices without prior approval
of the RBI provided the accounts of the bank are audited
on a quarterly basis and appropriate transfer to statutory
reserves are made as per the provisions of the Banking
Regulation Act, 1949, and directions issued by the RBI
in this regard are complied with.
In
the event of excess remittance, the foreign banks' head
office should immediately make good the shortfall. However,
most foreign banks in India only have an annual audit
and in order to use this provision, a quarterly audit
will have to be worked out.
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