RBI eases share transfer rules to woo foreign direct investment

It said the RBI nod is not needed if the original and resultant investments are in line with the existing FDI policy and FEMA regulations in terms of sectoral caps,conditionalities such as minimum capitalisation,reporting requirements and documentation.

However,the RBI has made it clear that the transactions will have to comply with Sebi regulations,FDI sectoral caps and the pricing guidelines as specified by the central bank.

Following the move,the central banks nod will not necessary if the pricing for the transaction is compliant with the specific/explicit,extant and relevant Sebi regulations the RBI said.

Currently,the transfer of shares from a resident to a non-resident requires the RBI nod if the transfer does not conform to the pricing guidelines as stipulated by the central bank from time to time. It is also required in cases where FIPB nod is needed and also when the Indian company whose shares are being transferred is engaged financial services or the transfer falls under the regulatory ambit of Sebi.