Reserve Bank of India
July 20, 1998
Indian Companies Seeking NRI/OCB
Investments RBI simplifies procedure
In order to simplify the procedure for investments from non-resident Indians/Overseas Corporate Bodies (NRI/OCB) in Indian companies, the Reserve Bank of India (RBI) has decided to grant general permission under the Foreign Exchange Regulation Act (FERA) 1973, in respect of 100 per cent scheme. It will no longer be necessary for the Indian companies to approach the Reserve Bank of India for permission to receive remittances from NRIs/OCBs and issue shares thereagainst. Necessary Notification No. F.E.R.A. 184/98-RB dated 14 July 1998 under FERA to give effect to the revised simplified procedure has been issued.
Henceforth, Indian companies will not require RBI permission for the purpose of receiving inward remittances and issue of shares to the NRI/OCB investors under the 100 per cent scheme. These companies will, however, have to file the required documents with the concerned Regional Offices of the Reserve Bank within 30 days after the issue of shares to NRIs/OCBs.
Applications pending with the Reserve Bank of India requiring examination will be dealt with expeditiously as per the procedure prevailing before the date of the notification.
RBI had already liberalised the procedure for foreign investments in priority sector industries in January, 1998. At that time, NRIs (and foreign companies owned by NRIs) were not eligible. RBI has now allowed NRIs & their foreign companies to invest in priority sector industries, without any prior approval from RBI. Priority sector covers thousands of items & services where NRIs can invest upto 100% of the equity capital.