Companies may issue debt to non-residents as bonus, says RBI

The Reserve Bank today allowed Indian companies to issue non-convertible or redeemable preference shares or debentures to non-resident shareholders from their reserves as bonus.

"On a review and with a view to rationalising and simplifying the procedures, it has been decided that an Indian company may issue non-convertible/redeemable preference shares or debentures to non-resident shareholders...By way of distribution as bonus from its general reserves," RBI said in a notification.

This facility will also encompass the depositories that act as trustees for the ADR/GDR holders, it said.

So far, RBI was granting permission for such issuances on a case-to-case basis.

RBI said it simplified the norms following references from some Indian companies to issue non-convertible or redeemable bonus preference shares or debentures to non-resident shareholders from the general reserve under a scheme of arrangement by a court, under the provisions of the Companies Act.

The permission has been given only for issue of non- convertible/redeemable preference shares or debentures to non- resident shareholders by way of distribution as bonus from the general reserves.

Further RBI clarified that issue of preference shares (excluding non-convertible/redeemable preference shares) and convertible debentures (except optionally convertible or partially convertible debentures) would be subject to Foreign Direct Investment Scheme.

EDITORIAL OF THE DAY

  • Public musn’t pay for domestic servants for our diplomats

    Nothing seems to have changed in the year and half since the fur that flew thick and fast over the case of diplomat Debjani Khobragade and her maid Sa

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

Economic integration in east Asia

As trade agreements within a global framework have become increasingly ...

Rajgopal Nidamboor

Up the ante of your conscious existence

It sounds cryptic, but is not as complex as it ...

Gautam Gupta

The ‘fake’ issue needs to be taken seriously

E-commerce players are witnessing unbelievable growth globally. Competition is increasing ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture