Reserve Bank of India
Foreign Exchange Department
Central Office
Mumbai – 400 001
Notification No. FEMA. 366/2016-RB
March 30, 2016
Foreign Exchange Management (Transfer or Issue of Security by a
Person Resident outside India) (Fifth Amendment) Regulations, 2016
In exercise of the powers conferred by clause (b) of sub-section (3) of
Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of
1999), the Reserve Bank of India hereby makes the following amendments in the
Foreign Exchange Management (Transfer or issue of Security by a Person Resident
outside India) Regulations, 2000 (Notification No. FEMA. 20/2000-RB dated 3rd
May 2000) namely:-
1. Short Title & Commencement
(i) These Regulations may be called the Foreign Exchange Management (Transfer
or Issue of Security by a Person Resident outside India) (Fifth Amendment)
Regulations, 2016.
(ii) They shall come into force from the date of their publication in the
Official Gazette.
2. Amendment of the Schedule 1
In the Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) Regulations, 2000, (Notification No. FEMA 20/2000-RB
dated 3rd May 2000), in Schedule 1, in the existing Annex B,
i. The existing entry F.7, F.7.1 and F.7.2 shall be substituted by the
following:
| F.7. |
Insurance |
% of equity/FDI Cap |
Entry route |
| F.7.1 |
Insurance
(i) Insurance Company
(ii) Insurance Brokers
(iii) Third Party Administrators
(iv) Surveyors and Loss Assessors
(v) Other Insurance Intermediaries appointed under the provisions of
Insurance Regulatory and Development Authority Act, 1999 (41 of 1999)
|
49% |
Automatic |
| F.7.2 |
Other Conditions |
| |
- No Indian Insurance company shall allow the aggregate holdings by way of total
foreign investment in its equity shares by foreign investors, including
portfolio investors, to exceed forty-nine percent of the paid up equity capital
of such Indian Insurance company.
- The foreign investment up to forty-nine percent of the total paid-up equity of
the Indian Insurance Company shall be allowed on the automatic route subject to
approval/verification by the Insurance Regulatory and Development Authority of
India.
- Foreign investment in this sector shall be subject to compliance with the
provisions of the Insurance Act, 1938 and the condition that Companies receiving
FDI shall obtain necessary license /approval from the Insurance Regulatory &
Development Authority of India for undertaking insurance and related activities.
- An Indian Insurance company shall ensure that its ownership and control remains
at all times in the hands of resident Indian entities as determined by
Department of Financial Services/ Insurance Regulatory and Development Authority
of India as per the rules/regulation issued by them from time to time
- Foreign portfolio investment in an Indian Insurance company shall be governed by
the provisions contained in sub-regulations (2), (2A), (3) and (8) of Regulation
5 of FEMA Regulations, 2000 and provisions of the Securities and Exchange Board
of India (Foreign Portfolio Investors) Regulations, 2014.
- Any increase in foreign investment in an Indian Insurance company shall be in
accordance with the pricing guidelines specified by Reserve Bank of India under
the FEMA Regulations.
- The foreign equity investment cap of 49 percent shall apply on the same terms as
above to Insurance Brokers, Third Party Administrators, Surveyors and Loss
Assessors and Other Insurance Intermediaries appointed under the provisions of
the Insurance Regulatory and Development Authority Act,1999 (41 of 1999).
- Provided that where an entity like a bank, whose primary business is outside the
insurance area, is allowed by the Insurance Regulatory and Development Authority
of India to function as an insurance intermediary, the foreign equity investment
caps applicable in that sector shall continue to apply, subject to the condition
that the revenues of such entities from their primary (i.e., non-insurance
related) business must remain above 50 percent of their total revenues in any
financial year.
- The provisions of paragraphs F.2.2 (4) (i) (b) & (d), relating to
‘Banking-Private Sector’, shall be applicable in respect of bank promoted
insurance companies.
- Terms ‘Control’, ‘Equity Share Capital’, ‘Foreign Direct Investment’ (FDI),
‘Foreign Investors’, ‘Foreign Portfolio Investment’, ‘Indian Insurance Company’,
‘Indian Company’, ‘Indian Control of an Indian Insurance Company’, ‘Indian
Ownership’, ‘Non-resident Entity’, ‘Public Financial Institution’, ‘Resident
Indian Citizen’, ‘Total Foreign Investment’ will have the same meaning as
provided in Notification No. G.S.R 115 (E), dated 19th February, 2015 issued by
Department of Financial Services and regulations issued by Insurance Regulatory
and Development Authority of India from time to time.
|
(R L Sharma)
Chief General Manager
Foot Note:-
The Principal Regulations were published in the Official Gazette vide G.S.R.
No.406 (E) dated May 8, 2000 in Part II, Section 3, sub-Section (i) and
subsequently amended as under:-
G.S.R.No. 158(E) dated 02.03.2001
G.S.R.No. 175(E) dated 13.03.2001
G.S.R.No. 182(E) dated 14.03.2001
G.S.R.No. 4(E) dated 02.01.2002
G.S.R.No. 574(E) dated 19.08.2002
G.S.R.No. 223(E) dated 18.03.2003
G.S.R.No. 225(E) dated 18.03.2003
G.S.R.No. 558(E) dated 22.07.2003
G.S.R.No. 835(E) dated 23.10.2003
G.S.R.No. 899(E) dated 22.11.2003
G.S.R.No. 12(E) dated 07.01.2004
G.S.R.No. 278(E) dated 23.04.2004
G.S.R.No. 454(E) dated 16.07.2004
G.S.R.No. 625(E) dated 21.09.2004
G.S.R.No. 799(E) dated 08.12.2004
G.S.R.No. 201(E) dated 01.04.2005
G.S.R.No. 202(E) dated 01.04.2005
G.S.R.No. 504(E) dated 25.07.2005
G.S.R.No. 505(E) dated 25.07.2005
G.S.R.No. 513(E) dated 29.07.2005
G.S.R.No. 738(E) dated 22.12.2005
G.S.R.No. 29(E) dated 19.01.2006
G.S.R.No. 413(E) dated 11.07.2006
G.S.R.No. 712(E) dated 14.11.2007
G.S.R.No. 713(E) dated 14.11.2007
G.S.R.No. 737(E) dated 29.11.2007
G.S.R.No. 575(E) dated 05.08.2008
G.S.R.No. 896(E) dated 30.12.2008
G.S.R.No. 851(E) dated 01.12.2009
G.S.R.No. 341 (E) dated 21.04.2010
G.S.R.No. 821 (E) dated 10.11.2012
G.S.R.No. 606(E) dated 03.08.2012
G.S.R.No. 795(E) dated 30.10.2012
G.S.R.No. 796(E) dated 30.10.2012
G.S.R. No. 797(E) dated 30.10.2012
G.S.R.No. 945 (E) dated 31.12.2012
G.S.R. No.946(E) dated 31.12.2012
G.S.R. No.38(E) dated 22.01.2013
G.S.R.No.515(E) dated 30.07.2013
G.S.R.No.532(E) dated 05.08.2013
G.S.R. No.341(E) dated 28.05.2013
G.S.R.No.344(E) dated 29.05.2013
G.S.R. No.195(E) dated 01.04.2013
G.S.R.No.393(E) dated 21.06.2013
G.S.R.No.591(E) dated 04.09.2013
G.S.R.No.596(E) dated 06.09.2013
G.S.R.No.597(E) dated 06.09.2013
G.S.R.No.681(E) dated 11.10.2013
G.S.R.No.682(E) dated 11.10.2013
G.S.R. No.818(E) dated 31.12.2013
G.S.R. No.805(E) dated 30.12.2013
G.S.R.No.683(E) dated 11.10.2013
G.S.R.No.189(E) dated 19.03.2014
G.S.R.No.190(E) dated 19.03.2014
G.S.R.No.270(E) dated 07.04.2014
G.S.R.No.361 (E) dated 27.05.2014
G.S.R.No.370(E) dated 30.05.2014
G.S.R.No. 371(E) dated 30.05.2014
G.S.R.No. 435 (E) dated 08.07.2014
G.S.R.No. 400 (E) dated 12.06.2014
G.S.R.No. 436 (E) dated 08.07.2014
G.S.R.No. 487 (E) dated 11.07.2014
G.S.R.No. 632 (E) dated 02.09.2014
G.S.R.No. 798 (E) dated 13.11.2014
G.S.R.No. 799 (E) dated 13.11.2014
G.S.R.No. 800 (E) dated 13.11.2014
G.S.R.No. 829 (E) dated 21.11.2014
G.S.R.No. 906(E) dated 22.12.2014
G.S.R.No. 914 (E) dated 24.12.2014
G.S.R.No. 30 (E) dated 14.01.2015
G.S.R.No. 183 (E) dated 12.03.2015
G.S.R.No. 284 (E) dated 13.04.2015
G.S.R.No. 484 (E) dated 11.06.2015
G.S.R.No. 745 (E) dated 30.09.2015
G.S.R.No. 759 (E) dated 06.10.2015
G.S.R.No. 823 (E) dated 30.10.2015
G.S.R.No. 858 (E) dated 16.11.2015
G.S.R.No. 165 (E) dated 15.02.2016
G.S.R.No. 166 (E) dated 15.02.2016
Published in the Official Gazette of Government of India –
Extraordinary – Part-II, Section 3, Sub-Section (i) dated 30.03.2016-
G.S.R.No.369(E)
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