Banks reporting on NRI investment to continue even after new monitoring system: RBI

Mumbai: The Reserve Bank of India (RBI) on Thursday said that reporting by custodian banks on the investment made by their foreign clients, including non-resident Indians (NRIs), in listed companies would continue even after the new system for such monitoring is implemented.

“Upon implementation of the new monitoring system, all Authorised Dealer banks would be required to provide the details of investment made by their respective NRI clients to the depositories in the format as provided by the depositories/SEBI. In addition, the reporting to Reserve Bank in the existing system, viz., LEC (NRI) and LEC (FII) (type of forms), would continue,” it notified.

In a circular, on 5 April, Securities and Exchange Board of India (Sebi) had said that it has, in consultation with the RBI, decided to put in place a new system for monitoring the foreign investment limits in listed Indian companies.

Under this system, the monitoring will be implemented and housed at depositories such as National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The system will be made operational from 18 May.

Currently, authorised dealer banks and custodians provide information on investment made by their clients in listed Indian companies. Based on this data, the RBI imposes a restriction if the threshold for such investments is breached, the central bank said.