However, all other cases for sale or transfer of underlying shares obtained upon the conversion of GDRs or ADRs by persons not resident in India will have to be referred to RBI for necessary permission, the central bank said.

Earlier, the non-resident holder had to approach RBI for permission under the Foreign Exchange Regulation Act (Fera) for sale of shares through any route.

Foreign investors had said that the market was likely to move against the sellers during the time spent in obtaining the necessary approval for sale.

The scheme for issue of ordinary shares through the depository receipt mechanism provides that the holders of GDRs/ADRs seek its redemption from the overseas depository. The latter in turn requests the domestic custodian bank to get the corresponding underlying shares released in favour of the non-resident investor for being sold in the country.

The central bank, in a move aimed at further boosting foreign exchange reserves, has also eased conditions regarding payments made by non-resident Indians (NRIs) and foreigners within the country.

The Reserve Bank exempted NRIs and foreigners visiting India from obtaining any specific permission for payments to anyone residing in the country, in travellers cheques, foreign currency or cheques drawn on banks abroad.

This will be for the purpose of payment for services rendered, sale of goods or in settlement of any lawful obligation, the apex bank said.

However, residents will have to sell the foreign currency to an authorised dealer within seven days.

After the success of the Resurgent India Bonds (RIBs) launched by the State Bank of India and other positive measures by the government the volatility in the country's foreign exchange market has shown considerable improvement. The SBI mopped up over $4 billion from NRIs through the bond.