Overseas investment norms for Indian corporate relaxed: RBI

The Reserve Bank of India has eased norms for overseas investment by Indian corporates by enhancing their borrowing limit. The apex bank has decided to reinstate the limit of Overseas Direct Investments (ODI)/ Financial Commitment (FC) to be undertaken by an Indian Party under the automatic route to the limit prevailing, as per the extant FEMA provisions, prior to August 14, 2013. However, any financial commitment over $1 billion (or its equivalent) in a financial year would require prior nod of the RBI even when the total FC of the Indian Party is within the eligible limit under the automatic route (i.e., within 400% of the net worth as per the last audited balance sheet).
In 2013, RBI had slashed the ODI limit to 100% of a company’s net worth from 400% for all firms. However, the limitation was not applicable on public sector companies like ONGC Videsh and Oil India.

Month: Current Affairs - July, 2014