Guarantee on Behalf of NRI Investments

New Delhi,Reserve Bank of India (RBI) has informed that in order to provide operational flexibility and ease the procedures, it has been decided to permit Authorised Dealer (AD) Category-I banks to issue bank guarantee, without prior approval of the RBI, on behalf of a non-resident acquiring shares or convertible debentures of an Indian company through open offers/delisting/exit offers, provided,
 the transaction is in compliance with the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) [SEBI (SAST)] Regulations; 

 the guarantee given by the AD Category-I bank is covered by a counter guarantee of a bank of international repute. The guarantee shall be valid for a tenure co-terminus with the offer period as required under the SEBI (SAST) Regulations. In case of invocation of the guarantee, the (AD) Category-I bank is required to submit to RBI, a report on the circumstances leading to the invocation of the guarantee. 
This information was given by the Minister of State for Finance, Smt. Nirmala Sitharaman in written reply to a question in Lok Sabha today.

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