The Reserve Bank of India (RBI), which has taken a firm stand against allowing external commercial borrowings (ECBs) in the real estate sector, now wants to clamp down on overseas investments in the sector through instruments that carry a fixed or variable internal rate of return. The central bank seems to be clear on allowing only pure foreign direct investment (FDI) in real estate where not firms but only specified projects can accept these foreign funds.In what could choke a crucial source of funding for the sector, the RBI has, in recent months, rejected investment proposals through the aforementioned instruments from foreign investors, including private equity firms, sources privy to the process told FE.
Source: Financial Express
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