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Fresh OCB investments snuffed out

Mumbai, Sept. 16: The RBI has decided to de-recognise with immediate effect overseas corporate bodies (OCBs) as an eligible class of investors and has barred them from making any fresh investments.

The decision has been taken in consultation with the government. Henceforth, OCBs will not be permitted to make investments under the foreign direct investment (FDI) scheme (including automatic route) and other investments / deposits / loans under various routes / schemes available under the existing foreign exchange regulations.

The central bank also said the facility of opening fresh non-resident (external) (NRE) accounts (savings, current, recurring or fixed), foreign currency (non-resident) accounts (banks) [FCNR(B)] and non-resident ordinary (NRO) accounts with authorised dealers in the country by OCBs stood withdrawn with immediate effect.

The RBI said the decision was a follow-up of the review of OCB investment activities based on the recommendations of the joint parliamentary committee on security market scam.

The central bank had already prohibited OCBs from undertaking fresh purchases under the portfolio investment scheme since November 2001.

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