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Overseas Corporate Bodies (OCB) are known as the companies, partnership firms, overseas trusts, societies, and other corporate bodies that are directly or indirectly held by NRIs (Non-Resident Indians) having at least 60% beneficial ownership. OCB existed until September 16, 2003, and was allowed to conduct transactions under the Foreign Exchange Management Regulations' broad authority. Continue reading to learn more about the Overseas Corporate Body (OCB) and the regulations that govern it. 

OCB was de-recognized as an eligible class of investors in September 2003 and was thus barred from investing in the Portfolio Investment Scheme, which is exclusively available to NRIs. 

Which Overseas Corporate Bodies (OCBs) are subject to the requirements outlined in the Foreign Exchange Management Act notification of October 2003? 

The requirements apply to OCBs that received facilities to invest in India under various schemes/routes as of September 2003 under multiple Foreign Exchange Management Regulations. For the Overseas Corporate Body (OCB), which could include: 

• On a repatriation and non-repatriation basis, investing in shares/convertible debentures of an Indian firm under the FDI scheme via the Government Route/Automatic RBI's Route. Or 
• OCBs who invested in Indian firm shares/convertible debentures on a repatriation and non-repatriation basis under the PIS program. Or 
• OCBs who made non-repatriation or repatriation investments in Indian securities other than shares and convertible debentures. Or 
• Who had a savings, current, recurring, or fixed deposit account with an authorized bank as an NRE or NRO? Or  
• Who had non-repatriation deposits with an Indian company (including NBFCs registered with the RBI)? Or 
• Who invested in a company founded in India's non-convertible debentures (NCDs) on a repatriation and non-repatriation basis? 
• Who lent money to someone in India? (In foreign currency). 

Is it possible for an overseas corporate organization, such as an OCB, to invest in Indian stock? 

Since September 16, 2003, Overseas Corporate Bodies (OCBs) have been de-recognized as a category of qualified investors in India. OCBs are prohibited from opening new accounts under the Foreign Exchange Management Regulations of 2003. As a result, OCBs are unable to invest in Indian stocks. 

Is it possible to transfer shares to OCBs using the permission/in-principal approval obtained by the FIPB, SIA, and RBI prior to September 16, 2003? 

Yes, after receiving special approval from the FIPB/SIA and RBI approval. 

Is it possible for an overseas corporate organization, such as an OCB, to invest in Indian stock? 

Since September 16, 2003, Overseas Corporate Bodies (OCBs) have been de-recognized as a category of qualified investors in India. OCBs are prohibited from opening new accounts under the Foreign Exchange Management Regulations of 2003. As a result, OCBs are unable to invest in Indian stocks. 

Is it possible to transfer shares to OCBs using the permission/in-principle approval obtained by the FIPB, SIA, and RBI prior to September 16, 2003? 

Yes, after receiving special approval from the FIPB/SIA and RBI approval. 

Is it possible for one OCB to sell shares to another OCB after September 16, 2003? 

No, OCBs are unable to sell their shares to another OCB. 

Can OCBs receive new ADRs or GDRs? 

Because OCBs are no longer recognized as a type of investor, no new ADRs or GDRs can be issued to them. 

What happens to an OCB's shares under the Portfolio Investment Scheme? 

OCBs can keep the shares they bought through the portfolio investment program until they sell them on a recognized stock exchange. 

What happens to an OCB's existing NRO (savings) account? 

OCBs' current NRO (savings) account will be converted to an NRO (current) account. 

Can ADs close out their existing investments by opening a new NRO (current) account in the name of an OCB? 

No. However, ADs may open a new NRO (current) account for OCBs with RBI's prior approval for the sole purpose of shutting down previous assets. 

Conclusion  

NRIs must consult market specialists before investing in the Indian market in order to make informed selections. At Afinoz, you may get extensive investing advice from specialists. You can ask any queries about NRI investment, NRI account opening online, and tax filing in India by downloading the Afinoz App from the Google Play Store or App Store. Click the button below to ask for any investment-related inquiries. For additional information, please visit Afinoz.com.