Loan Defaulters & Those Under Investigation Must Have NOC To Invest Abroad

In an effort to curb investment for loan defaulters and those under investigation by investigative agencies, the finance ministry made it more difficult for them to invest in overseas companies on Tuesday. According to the new rules notified by the department of economic affairs (DEA), foreign investors will have to obtain a no objection certificate (NOC) from lenders, probe agencies, or regulators before making an investment overseas.

Those with bank accounts classified as non-performing assets will be required to gain a NOC, as will those identified as wilful defaulters by banks, under investigation by regulators such as the Central Board Of Investigation (CBI) or the Enforcement Directorate (ED).

It may be presumed, however, that lenders or regulatory bodies and investigative agencies have no obligations to a proposed deal if they fail to provide their NOC within 60 days.

“Indian firms will be able to invest abroad easily and expand their global footprint with the revised overseas investment norms, which simplify the existing framework on overseas investments, “explains V. Swaminathan, the executive chairman of Andromeda Loans, one of India’s leading loan distribution companies.

A DEA notification states that Indian residents are not permitted to invest in foreign companies involved in real estate, financial products, or gambling that is in relation to the rupee the central bank of India’s permission.

According to a statement made by the finance ministry, there is now clarity about overseas portfolio investments and overseas direct investments. The automatic route has been introduced to various overseas investment-related transactions, significantly improving the ease of doing business.

According to the ministry, the Foreign Exchange Amendment Act, 2015’s amendment, as part of its consultation with the central bank, the government has framed rules regarding outward investments. The Foreign Exchange Management Regulations, 2004, and the Foreign Exchange Management Regulations, 2015, govern a resident of India’s overseas investment.

In addition, the Reserve Bank Of India will continue to administer the FEMA or Foreign Exchange Management Act Overseas Investment Rules and Regulations. Overseas investment and immovable property acquisitions and transfers outside the country will be governed by these regulations.

A growing global economy mandates Indian corporations to be part of global value chains to meet the needs of Indian businesses. Overseas investment regulations have been simplified and aligned with current business and economic dynamics through the revised regulatory framework for overseas investment claimed by the finance ministry.

Mumbai-based Andromeda Sales & Distribution Private Limited is one of India’s largest loan distributors. It was founded in 1991 as a Citibank Direct Sales Associate under the inspiring leadership of Mr. V. Swaminathan. In order to help customers find the best financial products suited to their needs, the company integrates its expertise with the latest trends in digital technology.

Over 25,000 partners and more than 1,000 branches make up the company’s distribution network, which spans 100+ cities. And Andromeda disburses over INR 50,000 crores worth of loans each year. You can learn more about them here.