Cabinet increases the limit for foreign investment in Stock Exchanges

Cabinet increases the limit for foreign investment in Stock Exchanges from 5% to 15%

Question: Recently the Union Cabinet has given its approval for raising foreign shareholding limit from 5% to-
(a) 20%
(b) 25%
(c) 15%
(d) 18%
Ans: (c)
Related facts:

  • On 27 July 2016 the Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for raising foreign shareholding limit from 5% to 15% in Indian Stock Exchanges.
  • The Cabinet has also approved the proposal to allow foreign portfolio investors to acquire shares through initial allotment, besides secondary market, in the stock exchanges.
  • The approval is in pursuance of implementation of the Budget Announcement made by the Finance Minister Shri Arun Jaitley while presenting the Union Budget 2016-17.
  • The move will help in enhancing global competitiveness of Indian stock exchanges by accelerating/facilitating the adoption of latest technology and global best practices.

Reference:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=147855