Deposit by NRI in Indian Companies

[prem suman]

Hi,

 

Please suggest whether an NRI-Foreign Citizen can make deposit in Indian companies? If yes, is there any lock-in period? What should be minimum rate of interest on such deposits? 

 

 

 Thanks & Regards

 

CA Prem Suman 

2, Garstin Place, 5th Floor, Kolkata -01 

Mobile:98315 - 46721

E-mail: capremsuman@gmail.com

 

 

 

 

 

[Kalidas Ramaswami]

The conditions to be complied with in this regard are contained in schedule 7 of the foreign Exchange Management (Deposit)Regulations 2000.
Thease are summarized as under:
1)Company can raise deposits either under a private arrangement or under a public depoait scheme.
2)If the company is an NBFC it should be registered with RBI and should have obtained the credit rating stipulated by RBI.
3)Deposit period cannot exceed 36 months.
4)For NBFC rate of interest shall be as per RBI guidelines.for others the rate shall be as per Deposit rules.
5)Deposit should be received only through internal banking channel or by debit to NRE/FCNR(B)/NRO Account.Maturity proceeds should be credited to NRO Account and cannot be repatriated.
6)Company should ensure compliance with all laws for raising such deposits.
7)Deposits shall not be received for agricultural/plantation activities or for real estate or for investment in any other company engaged in the above activities.
8)Deposits shall not be repatriable.
Regard
Kalidas 
 

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Date: Thu, 11 Oct 2012 12:38:18 +0530
Subject: [CA RUNGTA P D] Deposit by NRI in Indian Companies
From: capre...@gmail.com
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