Personal Website of R.Kannan
Learning Circle - Facilities to Non-Resident Indians
Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident Outside India)
Regulations, 2000

Home Table of Contents Feedback



To Main Page to View Table of Contents

Project Map

Purchase and Sale of Shares/ Convertible Debentures by a Non-resident Indian (NRI) or an
Overseas Corporate Body (OCB), on Non-Repatriation Basis
[Schedule 4: Regulation 5 (3) (ii) of Foreign Exchange Management (Transfer or issue of
security by a person resident outside India) Regulations, 2000]

Prohibition on purchase of shares/ convertible debentures of certain companies(Clause: 1)

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.

Explanation: For the purpose of this paragraph, real estate business shall not include development of township, construction of residential/ commercial premises, roads, bridges, etc.

Permission to purchase and/or sell shares/ convertible debentures
of an Indian company(Clause: 2)

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.

Method of payment for purchase of shares/ convertible debentures(Clause: 3)

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.

    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.

Sale/ Maturity proceeds of shares or convertible debentures (Clause: 4)

  1. 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.

  2. The amount invested in shares or convertible debentures under this Scheme and the capital appreciation thereon shall not be allowed to be repatriated abroad.


- - - : ( Purchase and sale of securities other than shares or convertible debentures of an Indian company
by a person resident outside India ) : - - -
Previous                  Top                  Next

[ last updated on 30.09.2004 ]<>[ chkd-apvd-ef ]