SCHEDULE 04 - Purchase and sale of shares/ convertible debentures by a Non-resident Indian (NRI) on non-repatriation basis - [See Regulation 5 (3) (ii)] - Foreign Exchange Management (Transfer or Issue Of Security By A Person Resident Outside India) Regulations, 2000

These rules have been superseded vide New Regulations New Regulations of 2017 14 [ Schedule-4 [See Regulation 5(3) (ii)] Acquisition of Securities or units by a Non-Resident Indian (NRI), on Non-Repatriation basis Permission to purchase 1. A Non-resident Indian (NRI), including a company, a trust and a partnership firm incorporated outside India and owned and controlled by non-resident Indians, may acquire and hold, on non-repatriation basis, equity shares, convertible preference shares, convertible debenture, warrants or units, which will be deemed to be domestic investment at par with the investment made by residents. Without loss of generality, it is stated that a. An NRI may acquire, on non-repatriation basis, any security issued by a company without any limit either on the stock exchange or outside it. b. An NRI may invest, on non-repartition basis, in units issued by an investment vehicle without any limit, either on the stock exchange or outside it. c. An NRI may contribute, on non-repatriation basis, to the capital of a partnership firm, a proprietary firm or a Limited Liability Partnership without any limit. Explanation: Investment Vehicles and Units and shall have the same meaning as defined in sub-regulation (ii g) and (xi A) of Regulation 2 of these Regulations. Prohibition on purchase 2. Notwithstanding what has been stated in paragraph 1, an NRI shall not make any investment, under this Schedule, in equity shares, convertible preference shares, convertible debenture, warrants or units of a Nidhi company or a company engaged in agricultural/plantation activities or real estate business or construction of farm houses or dealing in Transfer of Development Rights. Explanation: For the purpose of this paragraph, Real estate business means dealing in land and immovable property with a view to earning profit therefrom and does not include development of townships, construction of residential commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships. Further, earning of rent income on lease of the property, not amounting to transfer, will not amount to real estate business . Investment in units of Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) regulations 2014 shall also be excluded from the definition of real estate business . Method of payment for purchase 3. The consideration for investment under this Schedule shall be paid by way of inward remittance through normal banking channel from abroad or out of funds held in NRE/FCNR/NRO account maintained with a bank in India: Sale/ Maturity proceeds 4. The sale/maturity proceeds (net of applicable taxes) of the securities or units acquired under this Schedule shall be credited only to NRO account irrespective of the type of account from which the considerations for acquisition were paid. 5. The amount invested under this Scheme and the capital appreciation thereon shall not be allowed to be repatriated abroad.] ************* Note : 1. Substituted vide Notification No. 179/2008 dated 22/08/2008 , before substitution as inserted vide Notification No. 094/2003 dated 18/6/2003 , it was read as, Provided that the person to whom the shares are being transferred, has obtained prior permission of Central Government to acquire the shares if he has previous venture or tie up in India through investment in shares or debentures or a technical collaboration or a trade mark agreement or investment by whatever name called in the same field or allied field in which the Indian company whose shares are being transferred is engaged. Provided further that this restriction shall not apply to the transfer of shares to International financial institutions such as Asian Development Bank(ADB), International Finance Corporation(IFC), Commonwealth Development Corporation (CDC), Deutsche Entwicklungs Gescelscchaft(DEG) and transfer of shares of an Indian company engaged in Information Technology sector. 2. Omitted vide Notification No. FEMA 229/2012-RB, Dated 23-4-2012 , before it was read as;- Provided that the person to whom the shares are being transferred, shall obtain prior permission of the Central Government to acquire the shares if he has, as on 12th day of January 2005, an existing joint venture or technology transfer/trademark agreement in the same field as that of the company of which the shares or convertible debentures to be acquired by him. Provided further that no prior permission of Central Government shall be required for: (a) transfer of shares to multinational financial institutions such as Asian Development Bank (ADB), International Finance Corporation (IFC), Commonwealth Development Corporation (CDC),. Deutsche Entwicktungs Gescelscchaft (DEG). (b) transfer of shares of an Indian company engaged in Information Technology sector or in the mining sector, if the existing joint venture or technology transfer/trade mark agreement of the person to whom the shares are to be transferred are also in the Information Technology sector or in the mining sector for same area/mineral. (C) investment to be made by Venture Capital: Funds registered with SEBI; investments by multinational financial institutions or where in the existing joint-venture investment by either of the parties is less than 3%; or where the existing joint venture/collaboration is defunct or sick. 3. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 4. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 5. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 6. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 7. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 8. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 9. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 10. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 11. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 12. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 13. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares or convertible debentures 14. Substituted vide Not. 361/2016-RB - Dated 15-2-2016 , before it was read as, SCHEDULE 4 [See Regulation 5 (3) (ii)] Purchase and sale of 3 [shares or convertible debentures or warrants] by a Non-resident Indian (NRI) [***] on non-repatriation basis 1. Prohibition on purchase of 4 [shares or convertible debentures or warrants ] of certain companies No purchase of 13 [shares or convertible debentures or warrants] of an Indian company shall be made under this Scheme if the company concerned is a Chit Fund or a Nidhi company or is engaged in agricultural/plantation activities or real estate business or construction of farm houses or dealing in Transfer of Development Rights. Explanation : For the purpose of this paragraph, real estate business shall not include development of township, construction of residential/ commercial premises, roads, bridges, etc. 2. Permission to purchase and/or sell 5 [shares or convertible debentures or warrants] of an Indian company Subject to paragraph 1, a Non-resident Indian [***] may, without any limit, purchase on non-repatriation basis, 6 [shares or convertible debentures or warrants ] of an Indian company issued whether by public issue or private placement or right issue. 1 [ 2 [***]] 3. Method of payment for purchase of 7 [shares or convertible debentures or warrants ] The amount of consideration for purchase of 8 [shares or convertible debentures or warrants] of an Indian company on non-repatriation basis, shall be paid by way of inward remittance through normal banking channels from abroad or out of funds held in NRE/FCNR /NRO/NRSR/NRNR account maintained with an authorised dealer or as the case may be with an authorised bank in India. Provided that in the case of an NRI [***] resident in Nepal and Bhutan, the amount of consideration for purchase of 9 [shares or convertible debentures or warrants] of an Indian company on non-repatriation basis, shall be paid only by way of inward remittance in foreign exchange through normal banking channels. 4. Sale/ Maturity proceeds of 10 [shares or convertible debentures or warrants] (i) The sale/maturity proceeds (net of applicable taxes) of 11 [shares or convertible debentures or warrants ] purchased under this Scheme shall be credited only to NRSR account where the purchase consideration was paid out of funds held in NRSR account and to NRO or NRSR account at the option of the seller where the purchase consideration was paid out of inward remittance or funds held in NRE/FCNR/NRO/NRNR account. (ii) The amount invested in 12 [shares or convertible debentures or warrants] under this Scheme and the capital appreciation thereon shall not be allowed to be repatriated abroad.