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Securities Ltd.
|
"Those who are wise won't be busy, and those who are too busy can't
be wise." -- A quote from The Importance
of Living - The Noble Art of Leaving Things Undone, by the great
Chinese-American philosopher Lin Yutang. |
Portfolio Investment Scheme of RBI
for Investing in Indian stocks by Non-resident Indians
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Notification No. FEMA 20 /2000-RB dated 3rd May
2000
SCHEDULE 3
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[ See Regulation 5 (3) (i) ]
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Purchase/sale of shares and/or convertible debentures
by an NRI /OCB on a Stock Exchange In India on repatriation
and/or non-repatriation basis under Portfolio Investment Scheme
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1.
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A Non-resident Indian (NRI) or an Overseas Corporate Body (OCB)
may purchase/sell shares and/or convertible debentures of an Indian
company, through a registered broker on a recognised stock exchange,
subject to the following conditions :
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i)
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the NRI/OCB designates a branch of an authorised dealer for routing
his/its transactions relating to purchase and sale of shares/ convertible
debentures under this Scheme, and routes all such transactions only
through the branch so designated;
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ii)
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the paid-up value of shares of an Indian company, purchased by
each NRI or OCB both on repatriation and on non-repatriation basis,
does not exceed 5 percent of the paid-up value of shares issued
by the company concerned;
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iii)
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the paid-up value of each series of convertible debentures purchased
by each NRI or OCB both on repatriation and non-repatriation basis
does not exceed 5 percent of the paid-up value of each series of
convertible debentures issued by the company concerned;
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iv)
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the aggregate paid-up value of shares of any company purchased
by all NRIs and OCBs does not exceed 10 percent of the paid up capital
of the company and in the case of purchase of convertible debentures
the aggregate paid-up value of each series of debentures purchased
by all NRIs and OCBs does not exceed 10 percent of the paid-up value
of each series of convertible debentures;
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Provided that the aggregate ceiling of 10 per cent referred to
in this clause may be raised to 24 per cent if a special resolution
to that effect is passed by the General Body of the Indian company
concerned;
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v)
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the NRI or OCB investor takes delivery of the shares purchased
and gives delivery of shares sold;
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vi)
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payment for purchase of shares and/or debentures is made by inward
remittance in foreign exchange through normal banking channels or
out of funds held in NRE/FCNR account maintained in India if the
shares are purchased on repatriation basis and by inward remittance
or out of funds held in NRE/FCNR/NRO/NRNR/NRSR account of the NRI/OCB
concerned maintained in India where the shares/debentures are purchased
on non-repatriation basis;
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vi)
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the Overseas Corporate Body (OCB) informs the designated branch
of the authorised dealer immediately on the holding/interest of
NRIs in the OCB becoming less than 60 per cent.
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2.
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Report to Reserve Bank
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The link office of the designated branch of an authorised dealer
referred to in paragraph 1, shall furnish to the Chief General Manager,
Reserve Bank of India (ECD), Central Office, Mumbai a report on
daily basis giving the following details -
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a)
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Name of the Non resident Indian, or OCB.
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b)
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Company-wise number of shares and/or debentures and paid-up value
thereof , purchased and/or sold by each NRI /OCB.
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3.
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Remittance/credit of sale/maturity proceeds of shares and/or
debentures
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The net sale/maturity proceeds (after payment of taxes) of shares
and/or debentures of an Indian company purchased by NRI or OCB under
this Scheme, may be allowed by the designated branch of an authorised
dealer referred to in paragraph 1,
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a)
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to be credited to NRSR account of the NRI or OCB investor where
the payment for purchase of shares and/or debentures sold was made
out of funds held in NRSR account, or
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b)
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at the NRI or OCB investor’s option, to be credited to his/its
NRO or NRSR account, where the shares and/or debentures were purchased
on non-repatriation basis, or
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c)
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at the NRI or OCB investor’s option, to be remitted abroad
or credited to his/its NRE/ FCNR/ NRO/NRSR account, where shares
and/or debentures were purchased on repatriation basis.
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SCHEDULE 4
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{ See Regulation 5 (3) (ii) }
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Purchase and sale of shares/ convertible
debentures by a Non-resident Indian (NRI) or an Overseas Corporate
Body (OCB), on non-repatriation basis
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1.
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Prohibition on purchase of shares/ convertible debentures
of certain companies
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No purchase of shares or convertible debentures of an Indian company
shall be made under this Scheme if the company concerned is a Chit
Fund or a Nidhi company or is engaged in agricultural/plantation
activities or real estate business or construction of farm houses
or dealing in Transfer of Development Rights.
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Explanation: For the purpose of this paragraph, real estate business
shall not include development of township, construction of residential/
commercial premises, roads, bridges, etc.
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2.
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Permission to purchase and/or sell shares/ convertible
debentures of an Indian company
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Subject to paragraph 1, a Non-resident Indian or an Overseas Corporate
Body may, without any limit, purchase on non-repatriation basis,
shares or convertible debentures of an Indian company issued whether
by public issue or private placement or right issue.
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3.
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Method of payment for purchase of shares/ convertible
debentures
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The amount of consideration for purchase of shares or convertible
debentures of an Indian company on non-repatriation basis, shall
be paid by way of inward remittance through normal banking channels
from abroad or out of funds held in NRE/FCNR /NRO/NRSR/NRNR account
maintained with an authorised dealer or as the case may be with
an authorised bank in India.
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Provided that in the case of an NRI/OCB resident in Nepal and Bhutan,
the amount of consideration for purchase of shares or convertible
debentures of an Indian company on non-repatriation basis, shall
be paid only by way of inward remittance in foreign exchange through
normal banking channels.
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4.
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Sale/ Maturity proceeds of shares or convertible debentures
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i)
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The sale/maturity proceeds (net of applicable taxes) of shares
or convertible debentures purchased under this Scheme shall be credited
only to NRSR account where the purchase consideration was paid out
of funds held in NRSR account and to NRO or NRSR account at the
option of the seller where the purchase consideration was paid out
of inward remittance or funds held in NRE/FCNR/NRO/NRNR account.
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ii)
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The amount invested in shares or convertible debentures under this
Scheme and the capital appreciation thereon shall not be allowed
to be repatriated abroad.
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