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Non-resident investors can buy scrips under FDI scheme: RBI

A non-resident may acquire shares of a listed domestic company on the stock exchanges through a registered broker under FDI scheme, RBI says

September 10, 2013 11:19 IST | India Infoline News Service
The Reserve Bank of India (RBI) has allowed non-resident investors, including NRIs, to buy shares of Indian companies listed on recognised stock exchanges under FDI (foreign direct investment) scheme however subject to certain conditions.

At present, FIIs (foreign institutional investors), QFIs (qualified foreign investors) and NRIs are eligible to acquire shares on the recognised stock exchanges in compliance with FEMA regulations, but a non-resident is not permitted to acquire shares on stock exchanges under the FDI scheme.

"It has been decided that a non-resident, including an NRI, may acquire shares of a listed domestic company on the stock exchanges through a registered broker under FDI scheme, if the investor has already acquired and continues to hold the control in accordance with SEBI (Substantial Takeover Code)," RBI said in a notification on Friday.

The amount of consideration for transfer of shares to non-residents consequent to purchase may be paid through inward remittance using normal banking channels or debit to the NRE/FCNR account of the person with an authorised dealer/bank, the RBI added.

They can also debit to non-interest bearing escrow accounts maintained in India, the RBI said.

The pricing for subsequent transfer of shares to non-resident shareholders shall be in accordance with the pricing guidelines under FEMA, it added.

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