RESERVE BANK OF INDIA
FOREIGN EXCHANGE DEPARTMENT
CENTRAL OFFICE
MUMBAI - 400 001
RBI/2004/188
A.P. (DIR Series) Circular No.90
May 3, 2004
To
All Authorised Dealers in Foreign Exchange
Sirs / Madam,
Acquisition of Foreign
Securities by Resident Individuals under ESOP Scheme
Attention of Authorised Dealers
is invited to Regulation 19 of Notification
No.FEMA.19/2000-RB dated May 3, 2000 and subsequent AP
(DIR Series) Circulars No.32 dated April 28, 2001, No.16
dated December 15, 2001 and No.68
dated January 13, 2003 in terms of which, a resident individual who
is an employee or director of an Indian office or branch of a foreign company
in which the foreign holding is not less than 51% is permitted to acquire foreign
securities under ESOP Scheme, without any monetary limit, provided the shares
under ESOP are offered at a concessional price.
2. As a measure of further liberalisation,
it has now been decided to dispense with the condition that the shares should
be offered at a concessional price. It has also been decided to permit sale
of the shares so acquired, without obtaining prior permission of the Reserve
Bank, provided the proceeds thereof are repatriated to India.
Authorised Dealers may accordingly
allow remittances for acquisition of shares under ESOP Schemes as per the terms
of the offer.
3. Necessary amendments to the
Foreign Exchange Management (Transfer or issue of any foreign security) Regulations,
2000 are being issued separately.
4. Authorised Dealers may bring
the contents of this Circular to the notice of their constituents concerned.
5. The directions contained
in this circular have been issued under Sections 10(4) and 11(1) of the Foreign
Exchange Management Act 1999 (42 of 1999).
Yours faithfully,
Grace Koshie
Chief General Manager