RBI
ALLOWS INDIAN COMPANIES TO ISSUE NON-CONVERTIBLE DEBENTURES
The Reserve Bank on Monday allowed
Indian companies to issue non-convertible or redeemable preference shares or
debentures to non-resident shareholders from their reserves as bonus.
RBI has allowed Indian companies to issue
non-convertible or redeemable preference shares or debentures to non-resident
shareholders as bonus. In a notification issued from Mumbai today, RBI has said
that the facility will also encompass the depositories that act as trustees for
the American Depositary Receipt / Global Depositary Receipt - ADR/GDR holders.
RBI said the decision has been taken in order to rationalize and simplify
procedures clarifying that the company will issue shares or debentures by way
of distribution as bonus from its general reserves.
RBI has further said that the issue of preference shares, excluding
non-convertible/redeemable preference shares and convertible debentures, except
optionally convertible or partially convertible debentures) would be subject to
Foreign Direct Investment Scheme. So far, RBI was granting permission for such
issuances on a case-to-case basis. In another notification, RBI informed that
'Maintenance, Repairs and Overhaul' - MRO will now be treated as a part of
airport infrastructure so as to facilitate external commercial borrowings for
the sector.
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