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Repatriation of Refund of Funds Received for Purchase of Shares
A.P.
(DIR Series) Circular No. 45 dated 12th November 2002
Under
the current exchange control regulations authorised dealers require prior
permission of the Reserve Bank to allow repatriation of funds received for
purchase of shares.
2.
It has now been
decided to delegate the authority to authorised dealers to allow repatriation of
surplus funds/ refund of remittance received for purchase of shares to a person
resident outside India in the following cases:
(a)
Refund of funds received towards allotment of shares under Regulation 5
(1) of the Reserve Bank Notification No. FEMA 20/ 2000-RB dated May 3, 2000.
(b)
Remittance of surplus funds received for purchase of shares offered on
rights basis.
(c)
Remittance on account of surplus funds received for purchase of shares or
on account of cancellation of trade, under Two-way fungibility of ADRs/ GDRs.
3.
Authorised dealers may, accordingly allow remittances representing refund
of funds received from a person resident outside India for purchase of shares,
in the cases listed in paragraph 2 above, provided that the authorised dealers
are satisfied:
(i)
with the bonafides of the applicant;
(ii)
that the repatriation represents refund of funds received for purchase of
shares, by way of inward remittance from outside India or by debit to NRE/ FCNR
account maintained with an authorised dealer in India;
(iii)
that no part of remittance represents interest on the funds received.
4.
Authorised dealers may bring the contents of this circular to the notice
of their constituents concerned.
5.
The directions contained in this circular have been issued under Section
10 (4) and Section 11 (1) of the Foreign Exchange Management Act, 1999 (42 of
1999).
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