The Reserve Bank of India has proposed a penalty of 1 per cent of the total amount of investment in the event of a delay in reporting by an investee company that receives foreign direct investment against issue of shares. The penalty could be imposed if the reporting delay is beyond the prescribed period (30 days from receipt of funds in case of report via advance remittance form and 30 days from issue of shares in case of report via foreign currency-gross provisional reporting). In the changes that have been proposed in the timeframe for issue of shares and reporting of FDI, the RBI said the penalty is subject to a minimum of Rs. 5,000 and a maximum of Rs. 5 lakh a er month or part thereof for the first six months of delay and twice that rate thereafter.

Source - http://www.thehindubusinessline.com