New Delhi: Industry chamber Assocham on Tuesday said non-resident Indians are wrongly being clubbed with FIIs (foreign institutional investors) in the stock markets and the RBI needs to simplify the “complex, cumbersome and archaic” regulations on NRI investments.
Assocham President Sajjan Jindal has asked the Reserve Bank that “investments by NRIs are clubbed with those by FIIs for determining the total FII investment limit in any company.”
Noting that such a practice deprives NRIs of an opportunity to invest in many companies even when the market is down, Jindal said, “the regulations relating to NRI investment in Indian stock market is presently complex, cumbersome and archaic and these need to be simplified.”
The chamber also said NRIs should be permitted to trade in future-and-option segment on lines of FIIs, otherwise this is discriminatory and denies the Indian diaspora an opportunity to trade and hedge using options.
It has also asked the RBI to allow NRIs to hedge their currency risk in rupee and provide regulatory approvals, enabling retail investments in stock markets from them.
Currently, each NRI transaction has to be settled separately in the market. The NRI’s investments in the security market should be allowed to set off their losses earned in the security transactions against the profit earned from the security transactions.
While various fiscal measures taken recently are welcome, it is high time the regulators take more proactive, imaginative and bold initiatives by revisiting a few of the existing regulations and processes in the capital and currency markets.