Sebi, RBI issue circular on changes in monitoring of FPI holdings

Move triggered by shareholding limit breach at HDFC Bank in 2017

The Securities and Exchange Board of India (Sebi), and the Reserve Bank of India (RBI), have issued a circular on changes in the monitoring of foreign investment holdings in listed companies. 

This was triggered by a breach in the rule on foreign shareholding at HDFC Bank a year before. 

Under the new framework, companies will have to appoint a depository for monitoring of foreign shareholding, including foreign portfolio investors (FPIs) and non-resident Indians. In a breach, foreign investors will be required to divest the excess quantity by selling these to domestic investors within five trading days of the date of