Dear All,

A person resident of india can transfer by way of sale shares of an Indian Company of sector other than financial sector (i.e. Banks, NBFC, Insurance and infrastructure companies) subject to guidelines as given in Annex 3

Reporting of transfer is required to be made in form FC-TRS (in quadruplicate) within 60 days of th receipt of acount of consideration to the Authorised Dealer category I Bank. The onus to submit form FC-TRS is on the Transfer / Transferee resident in India. AD Bank will collect and consolidate the report and send a monthly report to RBI.

Pricing guidelines would be applicable. Price should not be less that the market price in case the shares are listed on any stock exchange ortherwise fair v alue of shares bone by a CA. A certificate of CA is required to be submitted with form FC-TRS.

The sale consideration shall be remitted to india through normal banking channel. In case the buyer is FII the payment should be made by debit to its Special Non Resident Rupee Account. In case the buyes is NRI payment shall be made by way of debit to his NRE/ FCNR A/c.

However, if the shares are acquired on non repatriation basis by NRI the consideration shall bee remitted to india through normal banking channel or paid out of funds held in NRE/ FCNR/ NRO A/c..

Following documents are also required to be send along with form FC-TRS.

-Consent letter by the sellor and buyer duly signed by them for sell and purchase of shares along with details.

- Shareholding pattern or the investee company afte the acquisiiton by NRI.

-CA Certificate for pricing of shares.

Thus only form FC-TRS is required to be filed with Authorised Dealer- Category I Bank along with necessary annexures. RBI may ask the reason for delay in filing.

Dear Mr. Shah,

Since the investment is made by NRI out of his normal bank (NRO) a/c in India in INR on non- repatriable basis, hence in my opinion, there is no need of informing RBI and to file Form FC-TRS with RBI. It is as good as transfer of shares to a Resident India.

Thanks,

 CA. Satendar Kumar

Dear Satendar Kumar,

Please refer to the below lines from RBI Master Circular...
 

"However, if the shares are acquired on non repatriation basis by NRI the consideration shall be remitted to India through normal banking channel or paid out of funds held in NRE/ FCNR/ NRO A/c.."

In sucha a case also reporting of transfer is required.

Hi Friends

Suppose the payment is made by cash or the payment is made from a bank account where the NRI has not yet intimated to the bank about the change in his residential status i.e he is still the resident  in their records ?

Dear Ankur,

Thanks for correcting me regarding filing of FC-TRS with RBI.

Pl clarify -

We have allotted 100000 shares to an NRI and all RBI procedures has been complied with.
Now we look to transfer those shares to a resident Indian. Pl clarify whether the procedure I've  understood is correct -

1. Make outward remittance througn AD.

2. approve the transfer of shares in a board meeting.

3. Submit FC-TRS form to RBI along with the necessary documents through AD.

4.  Get the documents approved by RBI.

Is this the procedure or is there any other formalities to be complied. ???