What investments can an NRI make on Non-Repatriation basis?
Schedule IV of notification No. 20/2000-RB deals with provisions relating to such type of investments. Briefly the provisions are as follows:- • General Prohibition Investments in shares or convertible debentures of an Indian Company engaged in following type of activities are not permitted. • Chit Fund or Nidhi Company • Agricultural or Plantation activities • Real Estate Business • Construction of farm houses or • Dealing in Transfer of Development Rights (TDRs) • General Permission Subject to above, NRIs are free to invest without any limit on non-repatriation basis in shares or convertible debentures of an Indian Company. However, only direct investment in the form of public issue, private placement or right issue is covered here. It follows that secondary investment, on private arrangement basis, would require prior RBI approval.
