OPENING AN ESCROW ACCOUNT IN INDIA BY FOREIGN INVESTORS FOR FDI WITHOUT PRIOR APPROVAL OF RBI

 OPENING AN ESCROW ACCOUNT IN INDIA BY FOREIGN INVESTORS FOR FDI WITHOUT PRIOR APPROVAL OF RBI

It has been decided to permit AD Category – I banks to open and maintain, without prior approval of the Reserve Bank, non-interest bearing Escrow accounts in Indian Rupees in India on behalf of residents and/ or non-residents, towards payment of share purchase consideration and/or provide Escrow facilities for keeping securities to facilitate FDI transactions subject to certain terms and conditions as given in Annex. It has also been decided to permit SEBI authorised
 

Depository Participants, to open and maintain, without prior approval of the Reserve Bank, Escrow account for securities subject to certain terms and conditions.

In both cases, the Escrow agent shall necessarily be an AD Category- I bank or SEBI authorised Depository Participant (in case of securities’ accounts). These facilities will be applicable for both issue of fresh shares to the non- residents as well as transfer of shares from/ to the non- residents.

Ref _ [A.P. (DIR Series) Circular No. 58 dated May 2, 2011]


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