RBI/2013-14/629
A.P. (DIR Series) Circular No.139
June 5, 2014
To
All Category – I Authorised Dealer Banks
Madam/ Sir,
Foreign investment in the Insurance Sector – Amendment to the Foreign
Direct Investment Scheme
Attention of Authorised Dealers Category – I (AD Category - I) banks is
invited to Annex B of Schedule 1 to the Foreign Exchange Management (Transfer or
Issue of Security by a Person Resident Outside India) Regulations, 2000 (the
Principal Regulations), notified vide
Notification No. FEMA. 20/2000-RB dated
May 3, 2000, as amended from time to time, wherein entry route, sectoral cap and
other conditions for sectors/activities in which FDI is permitted are specified.
In terms of the Schedule ibid, Foreign Direct Investment (FDI) up to 26 per cent
is permitted under automatic route in insurance sector.
- The extant FDI policy for insurance sector has since been reviewed.
Accordingly, effective from February 4, 2014, foreign investment by way of
FDI, investment by FIIs/FPIs and NRIs up to 26% under automatic route shall
be permitted in insurance sector subject to the conditions specified in the
Press Note 2 (2014 Series) dated February 4, 2014.
- A copy of Press Note No.2 (2014 Series) dated February 4, 2014 issued in
this regard by Department of Industrial Policy and Promotion, Ministry of
Commerce & Industry, Government of India is enclosed.
- Reserve Bank has since amended the Principal Regulations through the
Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) (Fourth Amendment) Regulations, 2014 notified vide
Notification No. FEMA. 301/2014-RB dated April 4, 2014
c.f. G.S.R. No.
361(E) dated May 27, 2014.
- AD Category - I banks may bring the contents of the circular to the
notice of their customers/constituents concerned.
- The directions contained in this circular have been issued under Sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999)
and are without prejudice to permissions / approvals, if any, required under
any other law.
Yours faithfully,
(B P Kanungo)
Principal Chief General Manager