India Regulatory Brief: EPFO Relaxes PF Withdrawal Procedure, RBI Liberalizes Foreign Borrowing Norms

Posted by Reading Time: 5 minutes

Regulatory brief logo

New EPF Regulation Changes Withdrawal Procedure

The Employees Provident Fund Organization (EPFO) has issued a circular informing that employees who are Aadhar-seeded Universal Account Number (UAN) holders will no longer need their employer’s approval in order to withdraw their Provident Fund. This will allow for fast settlement of claims as employees can submit claims in Form 19, Form 10c and Form 31 directly to the commissioner without their employer’s signature.

Previously, EPF (Employment Provident Fund) subscribers had to submit their PF claims manually through their present or former employers, compulsorily requiring their attestation of forms. The new facility therefore, makes the EPFO more subscriber-friendly, and helps employees avoid harassment from employers.

The EPFO today has a cumulative corpus of US$ 119 billion, which includes direct funds and funds from exempted trusts and company trusts that manage their own EPF under the EPFO.

Professional Service_CB icons_2015RELATED: Pre-Investment and Entry Strategy Advisory
RBI Relaxes Foreign Borrowing Norms

The Reserve Bank of India (RBI) has approved the liberalization of external commercial borrowing (ECB) norms, which will be effective from April 1, 2016. This relaxation enables Indian firms to finance rupee resources from overseas lenders without incurring currency risks. Such rupee-denominated bonds are popular in the financial market, particularly with Japanese retail investors. The RBI relaxation will also increase the number of bonds issued and assist in making the rupee more international. According to new RBI guidelines, rupee resources can now be borrowed from sovereign wealth funds, pension funds and insurance companies, apart from the usual lenders like banks.

Meanwhile for ECB in foreign currency, the RBI has increased the limit for small-value bonds, with a minimum average maturity of three years, to US$ 50 million from the current US$ 20 million. For ECB of more than US$ 50 million, the minimum maturity period should be five years. The all-in cost for such ECB has been reduced by 50 basis points. Long-term ECB will see the all-in cost at 50 basis points higher. On the other hand, the rate for the rupee-denominated ECB will be commensurate with the prevailing market conditions.

Related Link Icon-IBRELATED: India’s Economic Initiatives: A Magnet for Investments
Regulations Stymie Foreign Media Groups

The recent liberalization of FDI norms has opened up India’s US$ 7 billion broadcasting sector to foreign investors. Foreign firms can now own 100 percent of cable and direct-to-home (DTH) satellite operators, up from the previous limit of 74 percent. While the liberalization targets investments from top global media groups such as Time Warner and Comcast, regulatory obstructions to cross-media ownership remains a problem.

This has meant that global media corporations, many of which are in effect diversified media companies (those with both satellite and content production divisions), cannot benefit from the new FDI norms. Currently, India’s regulations prevent diversified media groups from owning more than 20 percent of satellite businesses, which is why Star India – an arm of 21st Century Fox – has been unable to expand beyond a 20 percent stake in Tata Sky, a satellite joint venture with India’s Tata group.

Cable and satellite operators have expressed concerns over the regulatory barriers because they need to find fresh investments to refurbish broadband infrastructure to compete with telecom groups offering entertainment on smartphones. India’s television industry is projected to be worth US$ 15 billion by 2020, and was pegged at around US$ 7.1 billion in 2014. India is also one the largest broadcasting markets in the world, based on viewership, according to research group Broadcast Audience Research Council (BARC), with 154 million TV homes and an audience totaling 675 million.


About Us

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

Related Reading-IB

Cover 90 x 126

Managing Your Accounting and Bookkeeping in India
In this issue of India Briefing Magazine, we spotlight three issues that financial management teams for India should monitor. Firstly, we examine the new Indian Accounting Standards (Ind-AS) system, which is expected to be a boon for foreign companies in India. We then highlight common filing dates for most companies with operations in India, and lastly examine procedures and regulations for remitting profits from India.

Taking Advantage of India’s FDI Reforms
In this edition of India Briefing Magazine, we explore important amendments to India’s foreign investment policy and outline various options for business establishment, including the creation of wholly owned subsidiaries in sectors that permit 100 percent foreign direct investment. We additionally explore several taxes that apply to wholly owned subsidiary companies, and provide an outlook for what investors can expect to see in India this year.

An Introduction to Doing Business in India 2015 (Second Edition)
Doing Business in India 2015 is designed to introduce the fundamentals of investing in India. As such, this comprehensive guide is ideal not only for businesses looking to enter the Indian market, but also for companies who already have a presence here and want to keep up-to-date with the most recent and relevant policy changes. We discuss a range of pertinent issues for foreign businesses, including India’s most recent FDI caps and restrictions, the key taxes applicable to foreign companies, how to conduct a successful audit, and the procedures for obtaining an employment visa.