RBI permits Indian Cos to invest 400% of net worth in overseas JV

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New Delhi, Sept 25 (UNI) Reserve Bank of India (RBI) today liberalised overseas investment norms allowing Indian companies to invest 400 per cent of their net worth in overseas Joint Ventures (JV) / Wholly Owned Subsidiaries (WOS).

The enhanced limit will also be available to registered partnership firms, said a statement.

For listed Indian companies for portfolio investment abroad, the existing limit of 35 per cent of the net worth has been increased to 50 per cent of the net worth.

Further, the requirement of 10 per cent reciprocal share holding in the listed Indian companies by overseas companies for the purpose of portfolio investment abroad by listed companies has been dispensed with.

RBI said that ''On a review of the current macro economic situation and in consultation with the Government of India, it has been decided to accelerate the implementation of the third phase of the recommendations of the Committee on Fuller Capital Account Convertibility (CFCAC) with regard to the foreign exchange outflows.'' RBI has also increased the existing limit for prepayment of External Commercial borrowings (ECBs) without the Reserve Bank approval from 400 million dollars to 500 million dollars, subject to compliance with the minimum average maturity period as applicable to the loan.

The aggregate ceiling for overseas investments by mutual funds, registered with SEBI has also been increased from four billion dollars to five billion dollars.

In addition, the existing facility of investing up to one billion dollars in overseas Exchange Traded Funds, as may be permitted by SEBI by a limited number of qualified Indian mutual funds would continue.

The existing limit under Liberalised Remittance Scheme (LRS) has been enhanced by RBI from 100,000 dollars to 200,000 dollars per financial year.


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