Pledge of shares for business purposes

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....ledge of shares for business purposes Under the extant FEMA regulations, powers have been delegated to the Authorised Dealer Category - I (AD Category - I) banks to convey 'no objection' to the resident eligible borrowers under the extant External Commercial Borrowings (ECB) guidelines for pledge of shares held by the promoters, in accordance with the Foreign Direct Investment (FDI) policy, in ....

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.... (i) Shares of an Indian company held by the non-resident investor can be pledged in favour of an Indian bank in India to secure the credit facilities being extended to the resident investee company for bonafide business purposes subject to the following conditions : (a) in case of invocation of pledge, transfer of shares should be in accordance with the FDI policy in vogue at the time of crea....

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....tilized for genuine business purposes overseas and not for any investments either directly or indirectly in India; (c) overseas investment should not result in any capital inflow into India; (d) in case of invocation of pledge, transfer should be in accordance with the FDI policy in vogue at the time of creation of pledge; and (e) submission of a declaration/ annual certificate from a Cha....