The RBI has updated the Cross Border Merger Regulations under FEMA, expanding the term 'Competent Authority' to include any authority under the Companies Act, thereby facilitating merger approvals.
RBI Amends Cross Border Merger Regulations
The Reserve Bank of India (RBI) has made amendments to the Foreign Exchange Management Act (FEMA) Cross Border Merger Regulations. The revisions replace references to the National Company Law Tribunal (NCLT) with the broader term 'Competent Authority', thereby recognizing approvals granted by any authority empowered under the Companies Act.
This change is designed to facilitate smoother processing of cross-border mergers and acquisitions, allowing for a more inclusive approach to regulatory approvals. It reflects the RBI's aim to improve the accessibility and efficiency of the merger process in the context of foreign investments.
Legal practitioners involved in mergers and acquisitions should take note of this amendment as it broadens the scope for obtaining necessary approvals, which could expedite transactions in the increasingly globalized investment landscape.
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