RBI Relaxes Abroad Investment Norms For Indian Corporates
The Reserve Bank of India has eased the norms for foreign investment by Indian corporates by raising their borrowing limit.
"It has, however, been decided that any financial commitment exceeding $1 billion (or its equivalent) in a financial year would require prior approval of the Reserve Bank even when the total financial commitment of the Indian Party is within the eligible limit under the automatic route...," RBI said in a notification.
"It has been decided to restore the limit of Overseas Direct Investments (ODI) or Financial Commitment (FC) to be undertaken by an Indian Party under the automatic route to the limit prevailing, as per the extant Foreign Exchange Management Act (FEMA) provisions, prior to August 14, 2013," it said.
Last year, due to the prevailing macro-economic situation, the RBI had reduced the ODI limit to 100% of a company's net worth from 400% for all companies. But the restriction was not applicable on public sector firms like Oil India and ONGC Videsh.
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