Wooing global investors by easing foreign direct investment procedures, the Reserve Bank said on Friday that transfer of shares between Indians and non-residents will not require its permission in several key areas like financial services.
Amending the Foreign Exchange Management Regulations, the RBI said that its prior permission would not be necessary where the company whose shares are being transferred is engaged in any financial service.
The liberalisation would help the entire financial services sector, including the non-banking finance companies.
Besides, the RBI permission has also been done away with for transfer of shares between residents and non-residents in cases where the Foreign Investment Approval Board has already given its clearances and the Securities and Exchange Board of India guidelines
These steps have been taken 'as a measure to further liberalise and rationalise the procedures and policies governing foreign direct investment in India,' the RBI said.
However, it was made clear that the transactions will have to comply with the Sebi regulations, FDI sectoral caps, and the pricing guidelines as specified by RBI.
Although FDI inflows during April-August have gone up by 95 per cent to $17.37 billion, the government and the Reserve Bank are keen to maintain robust foreign exchange reserves in the wake of volatility in the stock market leading to outflows by institutional investors.
The country has foreign exchange reserves of $318 billion but the pressure on rupee is matter of concern for an economy which depends on large commodity imports.
Overseas investments by Indian companies in September was $3.46 billion.
