Mumbai, April 27 (KNN) The Reserve Bank of India (RBI) has unveiled draft regulations relating to merger, demerger, amalgamation and arrangement between Indian companies and foreign companies under the Foreign Exchange Management (Cross Border Merger) Regulations, 2017.

The draft guidelines proposed to be issued on cross border merger transactions pursuant to the Rules notified by Ministry of Corporate Affairs through Companies (Compromises, Arrangements and Amalgamation) Amendment Rules, 2017 on April 13, 2017 have been placed on its website.

Section 234 of the Companies Act, 2013 provides for mergers and amalgamations between Indian companies and foreign companies. Accordingly, Ministry of Corporate Affairs has issued Companies (Compromises, Arrangements and Amalgamation) Amendment Rules, 2017 on April 13, 2017 to operationalize this section.

The Reserve Bank of India has proposed these Regulations under the Foreign Exchange Management Act, 1999 (FEMA) in order to address the issues that may arise when an Indian company and a foreign company enter into Scheme of merger, demerger, amalgamation, or rearrangement. These Regulations stipulate conditions that should be adhered to by the companies involved in the Scheme. The Regulations shall be named Foreign Exchange Management (Cross Border Merger) Regulations.

The central bank has invited members of the public, including the stakeholders and experts in the area, to offer their views and comments on the proposed regulations latest by May 9.