ARTICLE · 24 JULY 2007

Foreign Investments In Debentures

Mulla & Mulla & Craigie Blunt & Caroe

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In order to regulate debt flows into India, the Reserve Bank of India ("RBI") had vide its Notification dated 3rd May 2000 regulated the prohibition, restriction of the transfer or issue security by a person resident outside India.

IndiaGovernment, Public Sector

Shardul Thacker

In order to regulate debt flows into India, the Reserve Bank of India ("RBI") had vide its Notification dated 3^rd May 2000 regulated the prohibition, restriction of the transfer or issue security by a person resident outside India.

Indian companies were raising funds under the Foreign Direct Investment ("FDI") route through the issue of optionally convertible, partially convertible debentures to persons resident outside India.

The Reserve Bank of India ("RBI") has on 8^th June 2007 revised the guidelines pertaining to issue of optionally convertible, partially convertible debentures pursuant to which only those instruments, fully and mandatorily convertible into equity, would be eligible to be issued to a person resident outside India under the FDI scheme.

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