RBI/2004-05/176
A.P.(DIR Series) Circular No. 11
September 13, 2004
To
All Banks Authorised to Deal in Foreign Exchange
Madam/ Sirs,
Foreign Investments in India
Attention of Authorised Dealer Banks is invited
to the Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident Outside India) Regulations, 2000 relating to Foreign Investments in
India notified vide FEMA
20/2000-RB dated May 3, 2000 as amended from time to time.
2. In terms of Regulation 5(1) of the Notification
ibid, a person resident outside India (other than a citizen of Bangladesh or
Pakistan or Sri Lanka) or an entity incorporated outside India (other than an
entity in Bangladesh or Pakistan), may purchase shares or convertible debentures
of an Indian company under Foreign Direct Investment Scheme, subject to the
terms and conditions specified in Schedule I.
3. It has since been decided by the Government
of India to lift the restriction imposed on investment in Indian companies by
Sri Lankan citizens. Accordingly, persons resident outside India (other than
a citizen of Bangladesh or Pakistan) including citizens of Sri Lanka would henceforth
be eligible to purchase shares or convertible debentures of an Indian company
under Foreign Direct Investment scheme subject to specified terms and conditions.
4. Amendment to the Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident Outside India) Regulations,
2000 is being issued separately.
5. The direction contained in this circular
has been issued under Sections 10(4) and 11(1) of the Foreign exchange Management
Act, 1999(42 of 1999) and is without prejudice to permissions/approvals, if
any, required under any other law.
6. Authorised Dealer Banks may bring the contents
of this circular to the notice of their constituents and customers.
Yours faithfully,
Grace Koshie
Chief General
Manager
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