Regulation 5 - Withdrawal of general permission and unwinding of investments and transactions - Foreign Exchange Management [Withdrawal of General Permission To Overseas Corporate Bodies (OCBS)] Regulations, 2003

Withdrawal of general permission and unwinding of investments and transactions 5. On the commencement of these Regulations - (1) a) no fresh account by whatever name called shall be opened or maintained in the name of an OCB. , b) the Regulations specified in column 1 of the Schedule shall be amended as mentioned in Column 2. c) an existing NRE (Saving and Current) Account held or maintained in the name of an OCB shall be closed and balances repatriated forthwith; d) an existing NRO (Saving) Account held or maintained in the name of an OCB shall be closed and balances transferred to non-interest bearing NRO (Current) Account. The disposal of balances in such NRO (Current) account shall require specific approval of the Reserve Bank except in the following cases: i) all local payments in rupees; ii) remittance outside India of current income in India of the account holder net of applicable taxes;. e) an existing NRE (Recurring/Fixed Deposit) Account or FCNR (B) Account held in the name of an OCB, may be continued till original maturity and on maturity the proceeds shall be repatriated forthwith; f) an existing NRO (Recurring/Fixed) Account held or maintained in the name of an OCB may be continued till original maturity and on maturity the proceeds shall be credited to NRO (Current) Account; g) no facility of any nature whatsoever shall be granted on the security of an account held in the name of an OCB; h) any loan or other facility granted against the security of a Recurring/Fixed Deposit Account held in the name of an OCB, shall not be renewed and shall be closed by adjustment of the proceeds on maturity of the deposit; (2) a) no investment in any security shall be made by an OCB; b) an OCB may - i) transfer an existing investment in the form of shares or convertible debentures held by it, by sale or gift to any non-resident Indian (NRI); ii) dispose of the existing investment in the form of shares held by it, by sale at a rate not exceeding the prevailing market rate through a registered stock broker on a recognised stock exchange in India; c) an OCB shall not be eligible to purchase equity or preference shares or convertible debentures offered on right basis by an Indian company, and no Indian company shall offer equity or preference shares or convertible debentures on right basis to an OCB; d) where any offer on right basis made to an OCB before the date of commencement of these Regulations, is existing on that date, the OCB may renounce it in favour of any person resident in India or a person resident outside India who is eligible to invest in a security of an Indian company under the Regulations ; 3. a) no person resident in India shall borrow from, or lend to, an OCB either in foreign exchange or in Rupees; b) where any borrowing from or loan to an OCB, whether in foreign exchange or in Rupees made in accordance with the Regulations as applicable, is outstanding on the date of commencement of these Regulations, such borrowing or loan shall not be renewed on becoming due, and no interest thereon shall accrue after it falls due for repayment.