RBI eases share transfer rules to woo foreign direct investment
November, 05th 2011
Liberalising and rationalising the procedures and policies governing foreign direct investment (FDI) in India, the Reserve Bank of India (RBI) has said transfer of shares between Indians and non-residents will not require its permission in several key areas such as financial services.
The RBI permission has also been done away with for transfer of shares between residents and non-residents in cases where the Foreign Investment Promotion Board (FIPB) has already given its clearances and the Sebi guidelines are met.
It said the RBI nod is not needed if the original and resultant investments are in line with the existing FDI policy and FEMA regulations in terms of sectoral caps, conditionalities (such as minimum capitalisation, reporting requirements and documentation.
However, the RBI has made it clear that the transactions will have to comply with Sebi regulations, FDI sectoral caps and the pricing guidelines as specified by the central bank.