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RBI simplifies FDI disclosure norms and procedure for preference shares issue to NRIs, OCBs

The Reserve Bank of India today issued necessary amendments to its earlier notifications (dated January 13 and February 10), making it mandatory for the Indian companies to report the receipt of foreign remittance within a period of 30 days from the date of receipt of funds.

This requirement is in addition to the submission of the prescribed documents within 30 days from the date of issue of shares.

Accordingly, the RBI release said, Indian companies receiving funds from their foreign investors should immediately report (in any case, not later than 30 days) the investment particulars like name of the foreign investors and their country, name of the authorised dealers, address and date of receipt of remittances and its rupee equivalent, to the regional RBI office having jurisdiction over the company.

These amendments are aimed to simplify the procedures for foreign direct investment laid down by the RBI under the Foreign Exchange Regulation Act.

As a measure of further liberalisation, the RBI also extended the general permission for issue of equity shares to preference shares issue to foreign investors, non-resident Indians and overseas corporate bodies.

The permission also was extended to the issue of equity upto 100 per cent in respect of items like generation and transmission of electric energy through hydro and thermal power plants.

UNI

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