Notification/Circular No. – S.O. 2549(E) dated June 11, 2025
Applicable Act/Rule – Foreign Exchange Management Act, 1999; Foreign Exchange Management (Non-debt Instruments) Rules, 2019
Applicable Section/Rule – Rule 7
Effective Date – June 11, 2025
Rule 7 has been renumbered as 7(1) thereof and after clause (h) of renumbered sub-rule (1) the following sub-rule shall be inserted, namely:
“(2) An Indian company, engaged in a sector or activity prohibited for foreign direct investment, may issue bonus shares to its pre-existing shareholders who are persons resident outside India, provided that the shareholding pattern of such shareholders is not changed pursuant to the issuance of bonus shares and any bonus shares issued to such shareholders prior to the date of commencement of this sub-rule shall be deemed to have been issued in accordance with the provisions of these rules or the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000 or the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017, as the case may be.”.
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