At present, 100% FDI is permitted in exploration and production of oil and gas under automatic route, requiring no prior approval. But now even cases like UK’s BP Plc buying 30% interest in 23 oil and gas blocks of RIL for $7.2 billion would be treated as FDI for the purpose of reporting under FEMA
Mumbai: The Reserve Bank of India (RBI) has notified that all transfer of stake or interest in an oil and gas field to non-residents will be treated as foreign direct investment (FDI) and will have to be reported under the Foreign Exchange Management Act (FEMA), reports PTI.
At present, 100% FDI is permitted in exploration and production of oil and gas under automatic route, requiring no prior approval.
But now even cases like UK’s BP Plc buying 30% interest in 23 oil and gas blocks of Reliance Industries (RIL) for $7.2 billion would be treated as FDI for the purpose of reporting under FEMA.
“It has now been decided, in consultation with the government, to treat the issue/transfer of ‘participating interest/rights’ in oil fields to a non-resident as FDI transaction under the extant FDI policy and the Foreign Exchange Management Act (FEMA regulations),” the RBI said in a notification.
It said that such transactions will have to be reported as FDI transactions under provisions of FEMA.
Transfer or sale of stake or participating interest in an oil field like Reliance’s KG-D6 is permitted under present rules. Since 100% FDI under automatic route is permitted in exploration and production, the transfer to non-residents was not covered under FEMA reporting rules.
As per the FEMA regulations, transfer of equity shares or fully and mandatorily convertible debentures or convertible preference shares of an Indian company, from a resident to a foreigner or vice-versa has to be reported to an authorised dealer bank within 60 days of transactions.
Further, the receipt of consideration for issue of shares of an Indian company to a non-resident has to be reported to the RBI though such a bank within 30 days of the transaction.
This will also entail reporting the transfer of participating interest/rights under the ‘other’ category in the FC-TRS declaration form.
The RBI said that necessary amendments to the FEMA will be notified separately for facilitating the new changes.
Reliance had earlier this year sold 30% interest in its 23 oil and gas blocks, including the showpiece eastern offshore KG-D6 fields, to Europe’s second-largest energy firm BP Plc for $7.2 billion, the single largest foreign investment in the country.
Morgan Stanley sees India’s GDP growth at 7.3% this fiscal and 7.4% in the following year, but warns that the Eurozone crisis can impact the country’s exports
Singapore: The Indian government must accelerate implementation of major policy reforms to attract investments and keep up with projected economic growth, reports PTI quoting Morgan Stanley Asia’s managing director Chetan Ahya.
India should undertake strengthening of its institutional capacity to allocate critical national resources such as land and minerals to public and private corporate sector in a transparent manner for rapid industrialisation, Mr Ahya told reporters at the two-day Morgan Stanley Asia Pacific Summit that started here today.
Mr Ahya pointed out that India’s two-pronged strategy needed strengthening of institutional capacity to manage transparent awarding of major infrastructure projects under public-private route.
India should also build a comprehensive plan for energy security along with a systematic programme for energy pricing reforms, Mr Ahya said while stressing on the need for initiating aggressive fiscal consolidation.
He said the country should allow foreign direct investment in multi-brand retail distribution, insurance and other areas to build a sustainable source of capital inflows.
Mr Ahya called on India not to delay any further the 25-30 planned infrastructure projects as quick executions of these investment-oriented developments would bring in the much needed foreign investments and capitals.
He noted India’s good initiatives including the awarding of national highway contracts and reducing the environmental approval delays for coal mining.
However, Mr Ahya cautioned that clear signs of Indian economic slowdown have emerged in the last three to four months, even though the economy had till March this year maintained relatively strong growth.
Morgan Stanley sees India’s gross domestic product (GDP) growth at 7.3% this fiscal and 7.4% in the following year, but warns that the Eurozone crisis can impact the country’s exports.
According to experts, while borrowings by the industry and services sectors have been affected by high interest rates, the festive season has led sustained demand in the personal loans segment
Mumbai: Non-food credit offtake from banks grew by 18.5% to over Rs43.11 lakh crore in the 12 months to 4th November, in spite of high interest rate regime in the economy, reports PTI.
According to the Reserve Bank of India (RBI) data, credit offtake during the period stood at Rs43.11 lakh crore, as against Rs36.36 lakh crore during the 12 months to 5 November 2010.
However, this is the first time since August that the year-on-year credit growth has fallen below the 19% mark.
Meanwhile, deposits have risen to over Rs58.12 lakh crore as of 4th November this year, as against Rs49.57 lakh crore as of 5 November 2010.
According to experts, while borrowings by the industry and services sectors have been affected by high interest rates, the festive season has led sustained demand in the personal loans segment.
In its first quarterly monetary policy review for FY11-12 in July, the RBI had said that credit growth was likely to slow down as a result of its rate hikes.
The RBI said credit growth would be around 17%-18% this fiscal, as against the earlier projection of 19%, while deposit growth has been pegged at 17%.
During FY2010-11, bank credit offtake increased by 21.5%, while deposits grew by only 15.5%.
Corporate India has complained that frequent rate hikes have resulted in slowing down of investment and industrial growth.
Industrial growth slowed to a two-year low of 1.9% in September. The country’s economic growth also slowed to 7.7% in the April-June period, the lowest rate in six quarters.
The RBI has raised key policy rates by 350 basis points through 13 hikes since March 2010 to curb inflation, which has been above the 9% mark since December last year. The rate of price rise stood at 9.73% in October.