Sale/Transfer of Shares/Securities

Is permission of Reserve Bank required for sale/transfer of Government securities/units ?

No. Authorised dealers have been permitted to undertake sale of Government securities/units on behalf of NRIs without prior approval. Sale/ maturity proceeds can be remitted abroad if the original investment was made out of funds remitted from abroad or funds in NRE/FCNR accounts. Otherwise, they will have to be credited to NRO account of the holder.

Is permission of Reserve Bank required by NRIs for sale/transfer of shares/debentures of Indian companies to other NRIs ?

No. Transfer of shares/debentures of Indian companies by NRIs to other non-residents does not require permission of Reserve Bank. However, the transferee NRI would need permission for purchase of such shares for which an application is required to be made to Reserve Bank.

Is permission of Reserve Bank required for sale/transfer of shares/ debentures by NRIs to residents ?

Yes.

What is the procedure to be followed by NRIs for transfer/sale of shares/debentures held by them on non-repatriation basis to residents ?

General exemption has been granted by Reserve Bank for transfer/sale of shares/debentures by NRI individuals through stock exchange if such transfers are made in favour of an Indian citizen or a person of Indian origin or a company incorporated in India and sale proceeds thereof are credited to NRO account. For sale/transfer of shares/ debentures held by overseas corporate bodies through stock exchange, permission from Reserve Bank is required to be obtained.

What is the procedure for sale/transfer of shares held by NRIs with repatriation benefits ?

In the case of shares acquired by NRI individuals through stock exchange under the Portfolio Investment Scheme, general exemption has been granted for transfer through stock exchange, provided the sale is arranged through the same designated branch through whom they were purchased. In other cases, application for necessary permission is required to be made to Reserve Bank in the prescribed form.

What is the procedure to be followed by NRIs for sale/transfer of shares/debentures to residents by private arrangements ?

NRIs are required to submit application in form TS1 to Reserve Bank for sale of shares/debentures by private arrangements.

What is the procedure for issue of rights entitlement to NRIs ?

The concerned company should approach Reserve Bank for issue of rights entitlement to NRIs in the prescribed form if on repatriation basis. However, rights entitlement on non-repatriation basis would be covered by the general permission.

Can shares/debentures be given away as gifts to relatives ?

Yes. Reserve Bank has granted general permission to NRIs to transfer by way of gift shares, bonds and debentures of an Indian company held by them with Reserve Bank's permission to their resident close relative/s.

What is the procedure required to be followed by NRIs for renunciation of rights entitlement ?

NRIs can make an application to Reserve Bank by a letter detailing therein the folio number of the shares held and the manner in which the rights are being sold.

What is the procedure for issue of bonus shares ?

The concerned Indian company should approach Reserve Bank for issue of bonus shares to NRIs if the original investment is on repatriation basis. Issue of bonus shares in respect of investment on non-repatriation basis is covered by general permission.