Iinternational Finance Capital Account Convertability

In: Business and Management

Submitted By amitdalmia
Words 10489
Pages 42
Table of Contents

Capital Account Transactions Pages 03 to 08

FEMA Regulations – Capital Account

Types of Capital A/c Transactions

Foreign Institutional Investors Pages 09 to 11

Foreign Direct Investment Pages 12 to 15

American Depository Receipts Pages 16 to 17

Global Depository Receipts Pages 18 to 19

External Commercial Borrowings Pages 20 to 21

Foreign Currency Convertible Bonds Pages 22 to 25

Capital Account Convertibility Pages 26 to 28

Tarapore Committee and Current Status Pages 29 to 35

What is Capital Account Transaction? Capital account transaction is defined as a transaction which:- ➢ Alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India. In other words, it includes those transactions which are undertaken by a resident of India such that his/her assets or liabilities outside India are altered (either increased or decreased). For example:- (i) a resident of India acquires an immovable property outside India or acquires shares of a foreign company. This way his/her overseas assets are increased; or (ii) a resident of India borrows from a non-resident through External commercial Borrowings (ECBs). This way he/she has created a liability outside India. ➢ Alters the assets or liabilities in India of person resident outside India. In other words, it includes those transactions which are undertaken by a non-resident such that his/her assets or liabilities in India are altered (either increased or decreased). For example, (i) a non-resident acquire immovable property in India or acquire shares of an Indian company or invest in a Wholly Owned Subsidiary or a Joint Venture with a resident of India. This way…...

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