Thursday, December 15, 2011

FIIs NRIs ALLOWED TO REPATRIATE IDF MONEY

The Reserve Bank of India (RBI) has decided to allow Non-Resident investors, including Foreign Institutional Investors (FIIs), to repatriate investments in rupee and Foreign Currency-Denominated Bonds issued by Infrastructure Debt Funds (IDFs) registered as Non-Banking Financial Companies (NBFCs) as also of rupee- denominated units issued by IDFs set up as SEBI-registered domestic MFs. The investors can be sovereign wealth funds, multilateral agencies, pension funds, insurance funds and endowment funds or High Net worth Individuals (HNI), which are registered with Securities and Exchange Board of India (SEBI) as eligible Non-Resident investors in IDFs.

  • The original or initial maturity of the securities at the time of first investment by an NRI shall be five years subject to a lock in period of 3 years. However they can trade among themselves within this lock-in period.
  • Foreign currency denominated bonds issued by IDFs would have to comply with conditions of Foreign Exchange Management Act (FEMA) guidelines and regulations for External Commercial Borrowing (ECB).
  • All Non-resident investment in IDFs, other than NRIs, (in both rupee and foreign currency denominated securities) would be within an overall cap of $ 10 billion only. For NRIs there is no as such restriction.
  • Refinance by IDF would be up to 85% of the total debt covered by the concession agreement. IDFs set up as MFs would invest minimum of 90% of its funds in debt securities of infrastructure companies or SPVs across all infrastructure sectors, project stages and project types.

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