Mumbai: Reserve Bank on Monday issued a guide draft to liberalize the regulatory framework that regulates foreign investment with a view to promote the convenience of doing business.
RBI has been placed on the website of two documents – Draft Foreign Exchange Management (Non-Debt Instruments – Foreign Investment) Regulation, 2021 and Draft Management of Foreign Exchange Management (Foreign Investment), 2021.
Foreign investment and the acquisition of property not moving outside India by people living in India is currently regulated by the provisions of foreign exchange management (transfers or foreign security issues) Regulation, 2004 and foreign exchange management (acquisition and transfer of non-moving property outside India) respectively.
“With a view to further liberalize the regulatory framework and also to promote the ease of doing business, it has been decided to rationalize existing provisions that regulate foreign investment,” said the reserve bank.
Rules and regulations will be resolved after public consultation, he added.
Reserve banks have been looking for comments and feedback from stakeholders in two drafts on August 23, 2021.
Draft Management of Foreign Exchange (Non-Debt Instruments – Foreign Investment), 2021 has described restrictions on foreign investment.
In accordance with the draft, someone who lives in India is prohibited from making direct investment abroad (ODI) in foreign entities involved in real estate activities; Gambling in any form; and offers financial products related to Indian Rupees except for products offered in IFSC.
Also, foreign investment will continue to ban foreign entities located in the country / jurisdiction that is not a unit of financial action assignments (FATF) and the state in accordance with international organizations (iOSCO) or other countries / jurisdictions that can be prescribed by the central government.
, it said.
Other designs in foreign exchange management regulations (foreign investment), 2021 proposed that Indian entities can lend or invest in every debt instrument issued by foreign entities subject to loans supported by loan agreements and interest rates will be charged.
On the basis of the arm, among others.