Mr Raghuram Rajan in his policy statement, mentioned,”In keeping with the government’s Startup India initiative, the RBI will take steps to ease doing business and contribute to an ecosystem that is conducive for growth of startups,”
The RBI plans to help startups across sectors receive foreign venture capital investment and also enable transfer of shares from foreign venture capital investors (FVCIs) to other residents or non-residents.
RBI measures that are likely to benefit startups:
- The relaxation from sector restrictions for investments by FVCIs in startups is a welcome move. The existing requirement to approach FIPB for specific approvals only enhanced the timeline for deal closures.
- To improve the ease of doing business and make compliance easier, the RBI would now enable online submission of forms for outward remittances and allow a document-upload facility, if required.
- The RBI is also in discussion with the government to allow startups to raise rupee-denominated loans from foreigners and permit them to use innovative convertible instruments to raise funds.
- Startups can now raise debt and also convertibles. So far, we had only compulsorily convertible notes.