Regulatory Update – April 19, 2016

Acceptance of deposits by Indian companies from a person resident outside India for nomination as Director

The Reserve Bank of India ("RBI") has clarified that keeping deposits with an Indian company by persons resident outside India, in accordance with section 160 of the Companies Act, 2013, is a current account (payment) transaction and, as such, does not require any approval from the RBI. Refunds of such deposits, arising in the event of selection of the person as director or getting more than twenty-five (25) percent votes, will be accorded the same treatment. (Reference: A.P. (DIR Series) Circular No.59 of April 13, 2016).

Review of FDI policy –Insurance sector

FDI limits in the insurance sector has been enhanced from twenty-six (26) percent to forty-nine (49) percent under the automatic route subject to certain terms and conditions which have been notified (through Notification No. FEMA. 366/2016-RB dated March 30, 2016), including without limitation: