MUMBAI, February 4: The corporates no longer need the Reserve Bank of India's (RBI's) nod for foreign-direct investment (FDI) proposals, which have got prior government approval.The RBI, which issued a note to this effect on Wednesday, last month had relaxed FDI norms in areas where prior government approval was not needed and which fell under its automatic-approval route. Under the new format, investment proposals, already cleared by either the Foreign Investment Promotion Board (FIPB) or the Secretariat for Industrial Approvals, will now be allowed to bring in investments under the Foreign Exchange Regulation Act (Fera).
Till recently, the companies had to approach the central bank's regional office for its in-principle approval to bring in remittances from abroad after receiving the centre's clearance. They also needed another in-principle approval to issue shares to the foreign investors after the remittances were made.
"It will no longer be necessary for companies to approach the regional officesof the RBI for "in-principle" permission before receiving overseas investment or at a later stage for issuing shares to the foreign investor," an RBI release says.
After the amendment's notification, firms can allow their overseas partners to bring in their investments and issue shares after getting government clearance without the RBI's permission. "Necessary notification under Fera to give effect to the revised simplified procedure is under issue," the release said. The new norms will be applicable only for new approvals. "Cases pending with the RBI will be dealt with expeditiously as per the procedure prevailing before the date of the new notification," the release adds.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
