Module: | MODULE A: INTERNATIONAL BANKING
Q215: Consider the following statements regarding investments by Non-Resident Indians and the structuring of Family Investment Funds in the GIFT City International Financial Services Centre:
Statement 1: Under the liberalized Fund Management Regulations, Non-Resident Indians and Overseas Citizens of India are permitted to contribute up to 100 percent of the total capital corpus in a Foreign Portfolio Investor regulated by the centre's authority.
Statement 2: Family Investment Funds established in the centre are strictly restricted to investing solely in publicly listed securities and face a mandatory 25 percent concentration limit on investments in any single company.
Statement 2: Family Investment Funds established in the centre are strictly restricted to investing solely in publicly listed securities and face a mandatory 25 percent concentration limit on investments in any single company.
✅ Correct Answer: A
The regulatory landscape for overseas diaspora wealth and family offices has been heavily liberalized to attract capital.
Statement 1 is correct.
A major structural reform now allows up to 100 percent contribution by Non-Resident Indians and Overseas Citizens of India in the corpus of Foreign Portfolio Investors regulated by the centre's unified authority.
This is a substantial shift from previous historical restrictions that capped their aggregate contributions at 50 percent, thereby channeling more diaspora wealth through professionally regulated pooled structures.
Statement 2 is incorrect.
Family Investment Funds in the centre enjoy a highly flexible regulatory regime designed for ultra-high-net-worth individuals.
They can invest across both listed and unlisted securities in global and domestic markets, and they are notably exempt from the standard investment concentration limits that apply to traditional non-retail investment funds.
Statement 1 is correct.
A major structural reform now allows up to 100 percent contribution by Non-Resident Indians and Overseas Citizens of India in the corpus of Foreign Portfolio Investors regulated by the centre's unified authority.
This is a substantial shift from previous historical restrictions that capped their aggregate contributions at 50 percent, thereby channeling more diaspora wealth through professionally regulated pooled structures.
Statement 2 is incorrect.
Family Investment Funds in the centre enjoy a highly flexible regulatory regime designed for ultra-high-net-worth individuals.
They can invest across both listed and unlisted securities in global and domestic markets, and they are notably exempt from the standard investment concentration limits that apply to traditional non-retail investment funds.