Mumbai: As a fall out of the securities scam, Reserve Bank of India (RBI) on September 16 derecognised the Overseas Corporate Bodies (OCBs) as a "class of investor" and prohibited them from making fresh investments under any route, including foreign direct investment (FDI).

The apex bank said the decision, in consultation with the Union government, follows the recommendations of the Joint Parliamentary Committee on securities market scam.

In a statement RBI said the OCBs would not be permitted to make investments in deposit/loans under the various routes available to the non-residents under extant Exchange Control Regulations.

The facility of opening and maintaining of fresh non-resident external accounts, FCNR (B) and non- resident ordinary account with authorised dealers in India by OCBs, stands withdrawn with immediate effect, the statement added.

Besides, OCBs, no unincorporated entity would be permitted to make fresh investment under FDI scheme, including automatic route, RBI said adding that detailed instructions for existing investments and to process balances in existing bank accounts have been issued to authorised dealers.

The RBI had already prohibited OCBs from making fresh investments under the Portfolio Investment Scheme since November 2001.

The existing facilities for existing NRIs other than OCBs have not been modified or restricted, the statement added.

PTI