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 (Clause: 1)

1. 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;

2. 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;

3. 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;

4. 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;

    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;

5. the NRI or OCB investor takes delivery of the shares purchased and gives delivery of shares sold;

6. 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;

7. 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.

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 -

1. Name of the Non resident Indian, or OCB.

2. Company-wise number of shares and/or debentures and paid-up value thereof , purchased and/or sold by each NRI /OCB.

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,

1. 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

2. 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

3. 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.