RBI eases FDI norms, allows ‘optionality’ clauses

The Reserve Bank of India (RBI) has eased foreign direct investment norms by allowing optionality clauses to facilitate investors to exit from investments in both equity and debentures. In a notification, the central bank said that henceforth, call and put options can be included in such investments, subject to the minimum lock-in period and without assured return. A call option allows a holder to buy shares in an entity at an agreed price while a put option allows an investor to sell.