Reserve Bank Of India
A.P. (DIR Series) Circular No. 36
September 26, 2012
To
All Category - I Authorised Dealer banks
Madam / Sir,
Foreign Direct Investment (FDI) in India -
Allotment of Shares to person resident outside India under Memorandum of
Association (MoA) of an Indian company - Pricing guidelines
Attention of Authorised Dealers Category-I (AD Category - I) banks is invited to
the Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) Regulations, 2000 notified vide
Notification No. FEMA 20
/ 2000 -RB dated May 3, 2000 (hereinafter referred to as Notification No. FEMA
20), as amended from time to time.
- In terms of sub-regulation (1) of Regulation 5 of the Notification ibid, a
person resident outside India or an entity incorporated outside India may
purchase shares or convertible debentures of an Indian company under Foreign
Direct Investment Scheme, subject to compliance with the issue price specified
in para 5 of Schedule 1 of the Notification ibid.
- It has been decided that in cases, where non-residents (including NRIs) make
investment in an Indian company in compliance with the provisions of the
Companies Act, 1956, by way of subscription to Memorandum of Association, such
investments may be made at face value subject to their eligibility to invest
under the FDI scheme.
- AD Category - I banks may bring the contents of the circular to the notice of
their concerned constituents and customers.
- 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,
(Rudra Narayan Kar)
Chief General Manager
RBI/2012-13/223