The Hindu Business Line : `NRI-owned overseas firms on par with foreign investors'

THE Reserve Bank of India has today permitted overseas entities owned by non-resident Indians (NRIs) to enjoy all the facilities available to any foreign investor, including automatic route for foreign direct investment.

However, these entities will not be able to enjoy any special facilities such as holding NRE, NRO, FCNR(B), savings or current accounts.

They will also not be permitted to invest in instruments such as domestic mutual funds and Government dated securities.

These facilities will be available only to NRI and Persons of Indian origin.

The apex bank issued this statement today as a clarification in response to queries.

The apex bank had in a circular issued earlier this week barred OCBs from foreign direct investment by stating that "an unincorporated entity and OCB shall not make fresh investment under FDI Scheme (including Automatic Route).'' However, the circular had not mentioned the case of the overseas entities owned by non-resident Indians.

In a press release issued today the RBI said: "It may be recalled that the Reserve Bank of India, on September 16, 2003, had, in consultation with the Government of India derecognised overseas corporate bodies (OCBs) in India as an eligible class of investor under various rules and schemes available for foreign investment.

The RBI has clarified that derecognition of OCBs as a separate category of investor meant withdrawal of special facilities made available to OCBs and that entities owned by NRIs would continue to enjoy all the facilities available to other foreign investors.''

This means the same entities, which were derecognised as OCBs can continue to make foreign direct investments like any other foreign investor.

Article E-Mail :: Comment :: Syndication

Stories in this Section
SC ruling on paddy puts Centre, UP Govt in a bind

Rains fill up 58% level in reservoirs

Bankers give Reliance credit -- plenty of it!

Sensex sheds 101 points on overbought futures position

`NRI-owned overseas firms on par with foreign investors'

RIB outflows will not impact markets: RBI