RBI Issues an Operational Framework for Reclassification of Foreign Portfolio Investment to Foreign Direct Investment
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- Last Updated on 12 November, 2024
Circular No. RBI/2024-25/90 A.P. (DIR Series) Circular No. 19; Dated: 11.11.2024
RBI has issued a framework for reclassifying foreign portfolio Investments (FPI) to foreign direct Investments (FDI). Currently, an investment made by a foreign portfolio investor must be less than 10% of the total paid-up equity capital on a fully diluted basis. Any FPI investing in breach of the prescribed limit can divest their holdings or reclassify such holdings as FDI subject to conditions specified by RBI and SEBI within 5 trading days from the date of settlement of trades causing a breach.
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