Acceptance of deposits by Indian companies from a person resident outside India for nomination as Director

As per the Foreign Exchange Management(Deposit), Regulations 2000, no person resident in India shall accept any deposit from a person resident outside India. But as per Section 160 of Companies Act, 2013, A Person who intends to nominate himself or any other person as a director in an Indian company is required to place a deposit with the said company. Keeping deposit with an Indian company by persons resident outside India, in accordance with section 160 of the Companies Act, 2013, is a current account (payment) transaction and therefore it doesn’t require approval of Reserve Bank.

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