Wednesday, January 15, 2014

FDI buyback with guaranteed return – Prohibited

The Reserve Bank of India (RBI) has held that the guiding principle would be that the non-
resident investor is not guaranteed any assured exit price at the time of making such investment/ agreement and shall exit at the price prevailing at the time of exit, subject to lock-in period requirement, as applicable. All existing contracts will have to comply with the above conditions to qualify as FDI compliant.

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