Pledge of non-resident-held listed shares in favour of NBFCs permitted by AD banks subject to compliance and concentration norms. AD Category-I banks may allow pledge of listed equity shares held by non-resident investors in favour of NBFCs to secure credit to the resident investee company, subject to: only listed shares being eligible; transfer on invocation complying with credit concentration norms and rectification within 30 days if breached; optional ex ante board resolution and ex post statutory auditor certificate evidencing utilisation of loan proceeds for declared purpose; and compliance with applicable SEBI disclosure norms. Directions derive from amended FEMA regulations and are issued under sections 10(4) and 11(1) of the FEMA, 1999.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Pledge of non-resident-held listed shares in favour of NBFCs permitted by AD banks subject to compliance and concentration norms.
AD Category-I banks may allow pledge of listed equity shares held by non-resident investors in favour of NBFCs to secure credit to the resident investee company, subject to: only listed shares being eligible; transfer on invocation complying with credit concentration norms and rectification within 30 days if breached; optional ex ante board resolution and ex post statutory auditor certificate evidencing utilisation of loan proceeds for declared purpose; and compliance with applicable SEBI disclosure norms. Directions derive from amended FEMA regulations and are issued under sections 10(4) and 11(1) of the FEMA, 1999.
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