Ocbs May Escape Ban, But Face Stiff Capital Norms

The finance ministry is likely to put overseas corporate bodies on par with foreign institutional investors even as the Securities and Exchange Board of India (Sebi) suggested a ban on OCBs for their role in the stock market crash immediately after the Budget.

This would mean that OCBs would be required to beef up their paid-up capital, adhere to similar investment norms and reveal the identity of end-buyers of stocks in the Indian market.

Further, the ministry might also allow only restricted access to OCBs for taking the participatory note route to invest in the markets.

While the ministry is unlikely to ban OCBs from investing in the capital markets, ministry officials said the recommendations of the high level committee on capital markets which had thread bare discussed how OCBs exploited the markets by taking concentrated positions in certain scrips and indulging in circular trading, are now currently awaiting the finance minister