Rajan for easing ecosystem for start-ups; smooth access to ECBs, foreign venture capital

By: | Updated: April 5, 2016 2:04 PM

Steps are being taken with respect to the Government’s initiatives to promote ease of doing business for start-ups.

Raghuram Rajan - rbi The Reserve Bank of India is examining the possibility of easing the external commercial borrowing (ECB) regime to allow easier access start-ups to raise funds abroad.

The Reserve Bank of India is examining the possibility of easing the external commercial borrowing (ECB) regime to allow easier access start-ups to raise funds abroad.

In the credit policy RBI Governor Raghuram Rajan said the central bank is in talks with the Ministry of Finance on this.

“The simplification of process for dealing with delayed reporting of foreign direct investment (FDI) transactions and provisions for an enabling external commercial borrowing regime for start-ups are being examined by the Government and the Reserve Bank,” Rajan said on Tuesday.

In addition, guidelines in respect of deferred payment through escrow/indemnity arrangement for transfer of shares, enabling investment by foreign venture capital investors (FVCIs) in start-ups and overseas investment operations for start-ups will be issued soon in consultation with the Government.

Rajan said that Reserve Bank had highlighted the steps being taken with respect to the Government’s initiatives to promote ease of doing business for start-ups which included guidelines and clarifications issued in areas such as online submission of form for outward remittances up to certain thresholds, issue of shares without cash payments and acceptance of 11 payments by the Indian start-ups on behalf of their overseas subsidiaries.

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