No RBI nod required for FDI
The central bank clarified that an Indian company receiving funds through the foreign direct investment route would not need its prior approval
Mumbai: The Reserve Bank of India (RBI) clarified on Friday that an Indian company receiving funds through the foreign direct investment (FDI) route would not need its prior approval.
The clarification came after a PTI report on 19 May stated that in order to attract foreign investments, the government was thinking of doing away with the mandatory RBI approval required after the Foreign Investment Promotion Board (FIPB) approved an FDI proposal.
In a statement on its website, the central bank said FDI could come in through two routes—the automatic route, where no prior approval from any authority is needed for an Indian company to receive investments, and the approval route, where the company receiving FDI requires prior FIPB approval.
“It is only required to report the capital inflow and subsequently the issue of shares to the RBI in a prescribed format," the bank said.
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