Resident-NRI share transfers to be easier

The Reserve Bank of India (RBI) is understood to be relaxing norms for private transfer of shares between resident and non-resident Indians (NRIs).

It plans to make such transfers 'automatic', meaning they would not require its permission. It will be left to the discretion of custodian banks to allow such trasfers.

The government recently relaxed norms foreign investments whereby transfer of shares from residents to NRIs, including transfer of subscribers' shares to NRIs, were brought under the general permission route.

Besides, such transfers would be subject to compliance with the provisions of the Securities and Exchange Board of India relating to Substantial Acquisition of Shares and Takeover Regulation 1997.

Under the new guidelines which are likely to be issued soon, such transfers will be done through the banks which will be deciding authority to permit.

The discretion of banks will be restricted to the domain of transactions and dealing already notified by RBI in its circular to the authorised dealers.

However, transfer of shares under portfolio investment will not be guided under these norms and will continue to be under the RBI general permission route.