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