Conference on Capital Account Convertibility: Opportunities

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Conference on Capital Account ConvertibilityOpp
ortunities ChallengesPresentation to
ASSOCHAMNew Delhi 31 May 2006 Rajiv Kumar
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• Rules Applicable for NRIs/FDIs
• Saving Deposits
• -(NRE FCNR) All interest and deposits -
  Repatriable
• NRO Accounts Repatriable Upto 1 Mill
• Other Investment on Repatriation Basis
• - Govt Dated Securities/treasury bills
• - Units of domestic mutual funds
• - Non-convertible debentures of a company
  incorporated in India
• - Shares in PSE being dis-invested by the
  government of India
• - Shares convertible debentures of
  Indian co Under FDI scheme
• - Shares convertible debentures of
  Indian companies through stock exchange under
  portfolio Investment Scheme
• - perpetual debt instruments and debt
  capital instruments issued by banks in India
• Investment in Immovable Property
• -NRIs can repatriate funds from sales proceeds
  of immovable property to the extent of repatriate
  funds for acquiring the property, upto two
  properties
• Returning NRIs/PIO
• May continue to hold, own, transfer any currency,
  foreign security, property acquired when resident
  outside India
• May open, hold, maintain with an AD, a Resident
  Foreign Currency (RFC) account to transfer
  balances held in NRE/FCNR (B) accounts

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• Prerequisites for CAC
• Fiscal Balance
• Well designed monetary and ex-rate Policies
• Financial sector reforms Arms length regulation