Pledge of shares for business purposes in favour NBFCs

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..... (DIR Series) Circular No. 57 dated May 2, 2011, in terms of which shares of an Indian company held by the non-resident investor can be pledged in favour of a bank in India to secure the credit facilities being extended to the resident investee company for bonafide business purposes subject to the conditions stipulated therein. 2. With a view to further rationalising the process and reducing the .....

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..... 2013 as amended from time to time; * (i) The AD may obtain a board resolution 'ex ante', passed by the Board of Directors of the investee company, that the loan proceeds received consequent to pledge of shares will be utilised by the investee company for the declared purpose; (ii) The AD may also obtain a certificate 'ex post', from the statutory auditor of investee company, that the loan procee .....

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..... anks may bring the contents of this circular to the notice of their constituents and customers 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) and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully (B.P. Kanungo) Principal Chie .....

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