The Reserve Bank of India (RBI) has continued to liberalize policies and procedures governing foreign direct investment and has relaxed the requirement of RBI approval for the transfer of shares between residents and non-residents. The RBI announced these changes in circular 43 on 4 November.
Earlier position
Previously, under regulation 10(A)(c) of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, the transfer of shares from a resident to a non-resident required prior RBI approval if:
- The transfer did not conform with the pricing guidelines as stipulated by the RBI;
- The transaction did not fall under the automatic route and the approval of the Foreign Investment Promotion Board (FIPB) had been obtained;
- The activities of the Indian company whose shares were being transferred fell under the financial services sector; or
- The transfer fell within the purview of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
You must be a
subscribersubscribersubscribersubscriber
to read this content, please
subscribesubscribesubscribesubscribe
today.
For group subscribers, please click here to access.
Interested in group subscription? Please contact us.
你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章，欢迎成为我们的订阅会员成为我们的订阅会员。
The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
