Q1). Are foreign Institutional
Investors (FIIs), Non-Resident Indians (NRIs), and Persons of
Indian Origin (PIOs) allowed to invest in Indian
Ans: Yes, they are allowed to invest
in the primary and secondary capital markets in India
through the portfolio
investment scheme (PIS). Under
this scheme, FIIs/NRIs can acquire shares/debentures of
Indian companies through the stock exchanges in India.
What are the maximum overall investments one FII, NRI or
Ans: The upper limit for overall
investment for FIIs is 24%, of the paid up capital of the
Indian company, and 10% for NRIs and PIOs. The limit is 20%
of the paid up capital in case of public sector banks,
including the State Bank of India.
the upper limit of the investments be raised under any special
cases for FII, NRI or PIO?
Ans: Yes, the upper limit of 24% for
FII investment can be raised up to sectoral cap/statutory
ceiling, subject to the approval of the board and the
general body of the company passing a special resolution to
that effect. And the maximum limit of 10 % can be raised to
24% subject to the approval of the general body of the
company passing a resolution, to that effect.
Non-convertible debentures of Indian companies, can NRIs
investments still be made?
Ans: Yes, an NRI can make investment
in non-convertible debentures but they need to require
necessary permission (submit application) from Reserve Bank
(Central Office) by the concerned Indian Company in form
OCBs (Overseas Corporate Bodies) make similar investments in
mutual funds on non-repatriation basis?
Ans: Overseas Corporate Bodies can
make such investments only in domestic public/ private
sector Mutual Funds. They can also make investments in Money
Market Mutual Funds.
the ceiling for FIIs dependent of the ceiling of 10/24 per
cent for NRIs/PIOs?
monitors the maximum limits on FII, NRI or PIO investment in
Indian companies on a daily basis?
Ans: The Reserve Bank of India
Q8). Does it require permission from
the Reserve Bank required by NRIs for sale/transfer of
shares/debentures of Indian companies to other NRIs?
Ans. No. Transfer of
shares/debentures of Indian companies by NRIs to other
non-residents does not require permission of Reserve Bank.
However, the transferee NRI would need permission for
purchase of such shares for which an application is required
to be made to Reserve Bank in form FNC.
Q9). Is permission of RBI required if
an NRI intends to invest in new issues of Indian companies on
Ans. No. Indian companies have been
granted general permission to accept investments on
non-repatriation basis, in shares/convertible debentures by
way of new/rights/bonus issue provided the investee company
has not undertaken agricultural/plantation activity and/or
real estate business excluding real estate development i.e.
development of property and construction of