Conference on

Capital Account Convertibility: Opportunities & Challenges Presentation to ASSOCHAM New Delhi 31 May 2006 Rajiv Kumar

Rules Applicable for NRIs/FDIs

Saving Deposits -(NRE FCNR) All interest and deposits - Repatriable 2. NRO Accounts Repatriable Upto $ 1 Mill 3. 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

4. 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

5.

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

Prerequisites for CAC 1. Fiscal Balance 2. Well designed monetary and ex-rate Policies 3. Financial sector reforms: Arms length regulation