Section 6(3) in The Foreign Exchange Management (Transfer Or Issue Of Security By A Person Resident Outside India) Regulations, 2000
(3)The right shares or debentures purchased by the person resident outside India shall be subject to same conditions including restrictions in regard to repatriability as are applicable to the original shares against which right shares or debentures are issued:Provided that the amount of consideration for purchase of right shares or debentures is paid by way of inward remittance in foreign exchange through normal banking channels or by debit to NRE/FCNR account, when the shares or debenture are issued on repatriation basis:Provided further that in respect of shares or debentures issued on non-repatriation basis, the amount of consideration may also be paid by debit to NRO/NRSE/NRNR account.[6-A. Acquisition of bonus shares. [Inserted by G.S.R. 558(E), dated 18.6.2003 (w.e.f. 22.7.2003).]- An Indian company may issue bonus shares to its non-resident shareholders, subject to the following conditions:-(a)the shares against which bonus shares are issued by the company(hereinafter referred to as "the original shares") were acquired or held by the non-resident shareholder in accordance with the rules/ regulations applicable to such acquisition;(b)the bonus shares acquired by the non-resident shareholder shall be subject to the same conditions including restrictions in regard to repatriability as are applicable to the original shares.
