SEBI Eases Norms for Foreign Portfolio Funds to Lure Precious Dollars
RED-TAPE TO GREENBACKS FIIS, QFIS merged into one category. Measures aimed at reviving growth sentiment
Capital market regulator Securities and Exchange Board of India (SEBI) on Tuesday announced a catalogue of measures including simplifying
rules and registration procedures for foreign investors aimed at attracting dollars, vital to spin jobs and multiply income in a slowing economy.
Foreign funds are important to prop up the rupee and avoid dipping into India’s $290-billion foreign exchange reserves, enough to cover imports for seven months, to finance a record current account deficit (CAD) — the difference between dollar inflows and outflows.
The string of measures that SEBI approved at its Board meeting on Tuesday are primarily based on recommendations that a panel headed by KM Chandrashekhar had announced earlier this month.
Under the new set of rules, which will need to be approved by the government, India will classify overseas investors into three broad categories depending on their risk profile (see graphic) — a move that analysts said will hasten fund flow by removing bureaucratic and procedural hurdles.
Hindustan Times, New Delhi, 26-06-2013