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RBI allots wider opening to FII investments in Commex

29 Jun 2012 Evaluate

With a view to boost the Indian economy, RBI decided to garner more foreign investments into the country. Accordingly, it has decided to allow FIIs to invest up to 23% in commodity exchanges without seeking prior approval. These amendments were already approved by the Department of Industrial policy and Promotion (DIPP) on 10 April. The reserve bank has urged banks to notify about the changes to their constituents and customers concerned.

DIPP comes out with a consolidated FDI circular every year, keeping in view the national priorities and socio-economic objectives. To discourage import of sub-standard machinery, it had stopped the facility of giving equity alternative to the import of second hand equipment.

At present, foreign investment in commodity market, within a composite (FDI and FII) cap of 49 percent is allowed under the government approval route.

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