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Pledge of shares for business purposes: AD Category I banks may permit non resident share pledges subject to compliance conditions. Authorised Dealer Category I banks are delegated authority to permit non resident investors to pledge shares of Indian companies in conformity with the Foreign Direct Investment policy to secure credit. For pledges to Indian banks securing credit to the investee company, transfer on invocation must follow prevailing FDI policy, an auditor's declaration on utilisation of proceeds is required, SEBI disclosure norms must be observed, and pledges must comply with banking regulation. For pledges to overseas banks securing credit to non resident borrowers, loans must be from overseas banks, used abroad without capital inflow to India, transfers on invocation must follow FDI policy, and a CA/CPA declaration on utilisation is required.
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 shares for business purposes: AD Category I banks may permit non resident share pledges subject to compliance conditions.
Authorised Dealer Category I banks are delegated authority to permit non resident investors to pledge shares of Indian companies in conformity with the Foreign Direct Investment policy to secure credit. For pledges to Indian banks securing credit to the investee company, transfer on invocation must follow prevailing FDI policy, an auditor's declaration on utilisation of proceeds is required, SEBI disclosure norms must be observed, and pledges must comply with banking regulation. For pledges to overseas banks securing credit to non resident borrowers, loans must be from overseas banks, used abroad without capital inflow to India, transfers on invocation must follow FDI policy, and a CA/CPA declaration on utilisation is required.
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