Dividend

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Kalpana (Querist)

14 June 2013 When CLB permission is required for payment of dividend? What is the procedure for paying dividend out side India (all the shares)? Please help on this

Ajay Mishra

Ajay Mishra (Expert)

14 June 2013 Hi

The Reserve Bank of India (RBI) had vide its Circular AD (M.A. Series) No. 9, dated 10-4-1993 simplified the procedure for the payment of dividend to foreign shareholders. The power has been delegated to the authorised dealer (AD) concerned. The company is required to approach its authorised dealer with the following documents duly completed:—
(i) Form A2 in duplicate duly filled up and signed by the applicant.
(ii) Certified copy of the company's audited balance sheet and profit and loss account statement for the year/period to which the dividend relates.
(iii) Certified copy of the resolution passed at the annual general meeting of the company declaring the dividend.
(iv) Certified copies of Reserve Bank's approvals obtained for issue/purchase/holding of the shares on which dividend is to be remitted abroad.
On receipt of the abovesaid documents, the authorised dealer should confirm on Form A2 that they have verified the Reserve Bank's approval for purchase/holding/issue of the shares held by the non-resident beneficiary and it does not prohibit the remittance of dividend. Authorised dealer should also separately intimate the office of Reserve Bank within whose jurisdiction the Registered Office of the company is situated.
Dividend paid to NRIs/OCBs may be either repatriable outside India or may be kept in India in NRI rupee accounts. In the first case the company shall apply to an AD for remitting the dividend overseas or crediting the same to the NRI account with a bank in India. In the latter case the dividend may be paid to the bank in India for credit in the NRI rupee account.

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