Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (NDI Rules) has been amended vide Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2024 (NDI Amendment Rules) thereby enabling issuance of partly paid units to persons resident outside India by investment vehicles.

In view of the above-mentioned amendment RBI vide Circular RBI/2024-25/36 A.P. (DIR Series) Circular No. 7 dated May 21, 2024 has decided to regularise the issuances of partly paid units by

Alternative Investment Funds (AIFs) to persons resident outside India prior to the above-mentioned amendment of NDI Rules through compounding under Foreign Exchange Management Act, 1999.

AIFs before approaching RBI for compounding, AD Category-I banks may ensure that the necessary administrative action, including the reporting of such issuances by AIFs to the RBI, through the FIRMS Portal and issuing of conditional acknowledgements for such reporting, is completed.

The link for the aforesaid Notification is as follows:
https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NT362F5EF8FA0945436394C9B0488117D492.PDF