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A. |
GOVERNMENT SECURITIES/UNITS |
| Q.1 |
Can
NRIs invest their funds in Government securities
or Units of Unit Trust of India(UTI)? |
| Ans. |
Yes.
NRIs are freely permitted to invest their funds
in Government securities or Units of UTI through
authorised dealers. Units can also be purchased
directly from UTI. |
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| Q.
2 |
Can
NRIs make investments in National Savings Certificates
issued by Post Offices in India? |
| Ans. |
Yes.
Investments in National Savings Certificates can
be made by NRIs subject to the terms and conditions
applicable to the sale/issue of such certificates.
However, NRIs are not permitted to invest in bearer
securities like Indira Vikas Patra/Kisan Vikas
Patra. |
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| Q.3 |
Can
Government securities/units be freely transferred
or sold? |
| Ans. |
Yes,
provided the transfers/sales are arranged through
an authories dealer. Units can, however, be repurchased
directly by UTI. |
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| Q.
4 |
Are
sale/maturity proceeds of Government securities/Units/National
Savings Certificates allowed to be repatriated
abroad? |
| Ans. |
If
such securities were purchased out of funds remitted
from abroad or out of NRE/FCNR accounts, sale/maturity
proceeds can be repatriated. Sale/maturity proceeds
of securities purchased out of funds in NRO accounts
can only be credited to NRO accounts and cannot
be remitted abroad. Interest earned during the
financial year 1994- 95 and onwards can, however,
be remitted to the extent permitted by Reserve
Bank(See Ansers to Questions 59 and 60). |
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B. |
COMPANY SHARES/DEBENTURES |
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NRIs
are permitted to make direct investments in proprietary/partnership
concerns in India as also in shares/debentures
of Indian companies. They are also permitted to
make portfolio investments i.e. purchase of shares/debentures
of Indian companies through stock exchanges in
India. These facilities are granted both on repatriation
and non repatriation basis. |
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B.1 |
Direct Investment without Repatriation benefits |
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| Q.1 |
Is
permission of Reserve Bank required for NRIs to
invest in proprietary/partnership concerns on
non- repatriation basis? |
| Ans. |
No.
Reserve Bank has granted general permission to
non- resident individuals of Indian nationality/origin
to invest by way of capital contribution in any
proprietary or partnership concern in India on
non- repatriation basis provided the investee
concern is not engaged in any agricultural/plantation
activity or real estate business. This facility
is, however, not available to OCBs. |
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| Q.
2 |
Is
permission of Reserve Bank required for making
investments in new issues of Indian companies
on non- repatriation basis? |
| Ans. |
No.
Indian companies have been granted general permission
to accept investments on non-repatriation basis,
in shares/convertible debentures by way of new/rights/bonus
issue provided the investee company is not engaged
in agricultural /plantation activity or real estate
business(excluding real estate development i.e.
development of property and construction of houses).
or chit fund or is not a Nidhi company. |
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| Q.
3 |
Are
any formalities required to be completed by NRIs
for getting the benefit of the above general permission? |
| Ans. |
No.
However, the firms/companies concerned are required
to file declarations with Reserve Bank in form
DIN giving particulars of the investments made.
within ninety days from the date of the investment. |
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| Q.
4 |
Can
NRI individuals make investments in domestic public/private
sector Mutual Funds or Money Market Mutual Funds
floated by commercial banks and public/private
sector financial institution on non/repatriation
basis? |
| Ans. |
Yes. |
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| Q.5 |
Can
Overseas Corporate Bodies make similar investments
in mutual funds on non-repatriation basis? |
| Ans. |
OCBs
can make such investments only in domestic public/
private sector Mutual Funds. They can also make
investments in Money Market Mutual Funds. |
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| Q.6 |
Can
NRIs make investments in non-convertible debentures
of Indian companies? |
| Ans. |
Yes.
Applications for necessary permission should be
made to Reserve Bank (Central Office) by the concerned
Indian Company in form ISD, |
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| Q.
7 |
Can
NRIs purchase existing shares/debentures of Indian
companies by private arrangement? |
| Ans. |
Yes.
Reserve Bank permits NRIs , on application in
form FNC 7, to purchase shares/debentures of existing
Indian companies on non-repatriation basis. An
undertaking about non-repatriation is to be given
in form NRU. |
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| Q.
8 |
Is
it necessary for a resident, holding securities
in Indian companies, to secure any approval from
Reserve Bank on his becoming a non-resident for
holding such securities? |
| Ans. |
No.
Reserve Bank has granted general permission to
companies in India to enter the overseas addresses
of the shareholders in their books in such cases
provided the companies obtain undertakings from
the holders that they will not seek repatriation
of any income or sale proceeds of the security. |
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| Q.
9 |
Is
income/interest earned on investments/deposits
held in India by NRIs on non-repatriation basis
allowed to be repatriated? |
| Ans. |
Yes.
Income/interest accruing during the financial
year 1994-95 and onwards on bank deposits and
investments held by NRIs with non-repatriation
benefits will be eligible for repatriation as
under:
- Up
to U.S. $ 1,000 or its equivalent in full and
one-third of the balance income earned during
the financial year 1994-95;
- Up
to U.S. $ 1,000 or its equivalent in full and
two third of the balance income earned during
the financial year 1995-96;
- The
entire income earned during the financial year
1996-97 and onwards.
- The
entire income earned during the financial year
1996-97 and onwards.
Note : The investment/principal amount of deposits
made/held on non-repatriation basis will, however,
not be allowed to be repatriated abroad. |
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| Q.10 |
What
is the procedure to be followed for seeking repatriation
in such cases? |
| Ans. |
NRIs
should designate a branch of an authorised dealer
through whom the remittance of income is to be
made and make an application in form RCI to the
designated branch giving details of incomes earned
during the previous financial year alongwith a
Chartered Accountant's Certificate. The designated
branch will allow the remittance of net amount
(i.e. after payment of tax) or credit it to NRE/FCNR
account of the applicant. |
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B.
2 |
Direct Investment with Repatriation benefits |
| Q.
1 |
What
are the schemes available to NRIs for direct investments
in India with repatriation benefits? |
| Ans. |
NRIs
can make investments in new issues of shares/convertible
debentures of Indian companies under direct investment
schemes such as 24% scheme/40% scheme/100% scheme.
They can also invest in the schemes of domestic
Mutual Funds floated by public/private sector
institutions/companies and bonds issued by public
sector undertakings, Non-resident investors are
not required to apply for permission to invest
but the company concerned will have to obtain
permission from Reserve Bank. |
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