Debentures

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  • Topic: Bond, Stock, Debenture
  • Pages : 9 (3259 words )
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  • Published : August 24, 2010
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DEBENTURES
I. Sale/Transfer of Shares/Bonds/Debentures by NRIs to Residents In order to facilitate quick transfer of shares/bonds/debentures held by NRIs to residents, Reserve Bank has granted general exemptions for sale/transfer of shares/bonds/debentures through stock exchanges in India subject to fulfillment of certain conditions. Applications for sale/transfer of shares/bonds/debentures held by NRIs/OCBs by private arrangement i.e. other than through stock exchange should be made to Reserve Bank in TS 1 either by the transferor or the transferee, attaching therewith the letter of consent of the other party irrespective of whether the shares/bonds/debentures are listed on a stock exchange or not. While conveying its approval, Reserve Bank will stipulate the conditions subject to which the sale/transfer should be effected. In case of sale/transfer of shares/bonds/debentures acquired on repatriation basis, repatriation of such proceeds of bulk holding (i.e. shares/bonds/debentures exceeding Rupee one lakh in face value or 5% of the company’s paidnup capital whichever is lower) will be permittted only on production of a certificate from a Chartered Accountant or the concerned company’s secretary stating that shares with necessary transfer form duly signed have been received/lodged with the company for registration in favour of the transferee. II. Sale/Transfer of Shares/Bonds/ Debentures of Indian companies through a Stock Exchange acquired without repatriation benefit. Reserve Bank has exempted the transfer of shares, bonds or debentures of Indian companies made by NRIs through stock exchange in India in case where (a) such transfers are made in favour of an Indian citizen or person of Indian origin resident in India or in favour of a company or other body corporate incorporated in India and (b) sale proceeds of shares are credited to the NRO account of the transferor with no right of repatriation outside India. In such cases, authorised dealers may credit the sale proceeds to the seller’s NRO account after verifying the contract notes issued by recognised stock exchange brokers through whom the sale was effected. This exemption is available in respect of shares, bonds, or debentures acquired by NRIs under the Portfolio Investment Scheme as well as under any Direct Investment Scheme. (ii) For sale/transfer of shares, bonds or debentures by OCBs acquired on non-repatriation basis through a stock exchange in India, a consolidated application giving full particulars may be submitted to the concerned office of Reserve Bank. Permission will be granted by Reserve Bank for a specific period subject to renewal. III. Sale/Transfer of shares/Bonds/ Debentures of Indian companies through a Stock Exchange acquired without repatriation benefits under the Portfolio Investment Scheme. Reserve Bank exempted transfer of shares, bonds, or debentures of Indian companies registered in India previously acquired by NRIs/OCBs with repatriation benefits under the Portfolio Investment Scheme to person residents in India or persons of Indian origin resident in India or in favour of companies or bodies corporate, incorporated under any lay in force in India on the following conditions: (a)The transferor had purchased such shares, bonds or debentures from the stock market through a member of a recognised stock exchange in India and delivery of shares, bonds, or debentures so purchased has been taken by him or on his behalf by the concerned authorised dealers or its nominee. (b) The shares, bonds or debentures are sold in the stock market through member of a recognised stock exchange in India and sale transaction is effected at the ruling market price as determined on the floor of the stock exchange by normal bid and offer method and through the same designated branch of the authorised dealer through which the shares, bonds or debentures were earlier purchased. (c) The sale proceeds are paid to the said designated branch. Consequently, it is not...
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