10C.31
- Document type
- Manual
- Dated
- Category
- Exchange Management Manual
Conversion of Holdings of Securities into Joint Holdings Between Residents/Non-residents
By its Notification No. FERA.145/93-RB dated 26th April 1993 issued under sub-sections (1) and (5) of Section 19 of FERA 1973,Reserve Bank has granted general permission to NRIs/resident Indian citizens for conversion of their holdings in securities issued or registered in India, into joint holdings by addition of the names of persons of Indian nationality or origin subject to the following conditions:
a)An NRI to convert his holding into joint holding by addition of name/s of person/s of Indian nationality/origin resident in India provided
(i) transfer formalities as required under the Companies Act, 1956 are complied with and
(ii) dividend income or sale proceeds of the securities accruing to the person resident in India are not repatriated outside India in the event of his becoming a non-resident sole (or joint named) holder of the security by succession, gift or otherwise.
b)A resident Indian citizen to convert his holding into a joint holding by addition of name/s of an NRI/s provided
(i) the resident holder continues to be the first holder;
(ii) the joint holding is treated as non-resident holding in the books of the company;
(iii) any dividend or income or sale proceeds becoming payable to NRIs are credited to his NRO account and
(iv) the securities are not sold or disposed of otherwise than through a member of a recognised stock exchange in India, except with the permission of Reserve Bank.
Note: See paragraph 10C 24A regarding repatriation of income/interest earned during the financial year 1994-95 and onwards.