RBI updates Master Direction on Foreign Investment in India as on 2018-04-11

Apr 11, 2018 | by Avantis RegTech Legal Research Team

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The Reserve Bank of India (RBI) has further updated the Master Direction on Foreign Investment in India dated April 06, 2018. Vide this update:

·         New sub-Para has been inserted in Para 5.2 which relates to Sectorial Caps

o   Foreign Investment in investing companies not registered as Non-Banking Financial Companies with the Reserve Bank and in core investment companies (CICs), both engaged in the activity of investing in the capital of other Indian entities, will require prior Government approval.

o   The core investment companies should additionally comply with the regulatory framework prescribed for such entities as NBFCs under the Reserve Bank of India Act, 1934 and regulations framed thereunder.

o   Foreign investment in investing companies registered as Non-Banking Financial Companies (NBFCs) with the Reserve Bank will be under 100% automatic route.

·         An Indian company may issue capital instruments to a person resident outside India under automatic route if the Indian investee company is engaged in a sector under automatic route or with prior Government approval if the Indian investee company is engaged in a sector under Government route against certain portfolios.

[RBI/FED/2017-18/60 FED Master Direction No. 11/2017-18]

URL: https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11200#F5


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