The government today allowed proceeds of American depositary receipts, global depository receipts and foreign currency commercial borrowings (ADR/GDR/FCCB) to be used to fund purchase of government equity through the disinvestment programme.
The Reserve Bank of India (RBI) would shortly issue the necessary notification. As per the existing guidelines, there were no restrictions on the end use of ADR/ GDR/ FCCB funds except for investments in real estate or stock markets to prevent their use for speculation.
The government decision clarifies that funding of disinvestment would not be treated as investment in stocks and hopes to give more options to the bidders.