Seeking to assuage foreign investors, the government said Tuesday there were no changes in the April 10 Sebi circular and overseas Indians would continue to be allowed to invest up to 5 per cent in any security under current regulations.
Economic Affairs Secretary S C Garg asserted that capital markets regulator Sebi last month extended the deadline of the circular until December and wondered that why there was much ado about the proposed guidelines.
Sebi also said that it was "preposterous and highly irresponsible" to claim that USD 75 billion will move out of India because of the April 10 regulatory move.
Stock markets fell for the fifth straight session Tuesday on sustained capital outflows by foreign funds after an investor lobby group AMRI flagged Monday the new Sebi KYC norms, if not amended, could lead to outflows of USD 75 billion from India, hurting the rupee and equities.
Speaking with reporters here, Garg said, "April 10 circular has been put off to December. There is nothing in operation at the moment ... why there is so much ado."