The Reserve Bank of India has proposed to allow core investment companies to invest up to 200% of their owned funds in overseas financial assets and up to 400% of their funds in overseas non-financial assets.
In draft norms released on Friday, the central bank said that core investment companies that are not under the purview of the RBI’s regulation will have to register with the bank if they wish to invest in financial assets overseas.
?CICs that are presently exempted from the regulatory framework of RBI, would be required to be registered with the Bank, for the purpose of overseas investment in financial sector,? the central bank said.
Core investment companies are non-banking finance companies (NBFCs) that buy stock in other companies for the purpose of holding. These companies do not carry out any other activity besides buying and holding stake in other companies.
The central bank said that such companies will not be allowed to set up branches overseas but can establish subsidiaries.
Such subsidiaries must not be a shell company and must not be a vehicle to raise funds in India for the parent company. The core investment company must provide periodic details of the balance sheets of its overseas arms, the central bank said.
RBI asks UCBs to verify I-T returns before opening businessmen a/cs
In a bid to check frauds, the Reserve Bank of India on Friday asked the Urban Cooperative Banks (UCBs) to verify I-T returns and other documents before opening bank accounts of businessmen as part of the KYC exercise. The UCBs, RBI said should verify “complete income tax return in the name of the sole proprietor where the firm’s income is authenticated by the I-T authorities”. It further said they should also look into the “utility bills such as electricity, water and landline telephone bills in the name of the proprietary concern”. PTI