 "RBI relaxes norms on overseas direct investments")
New Delhi: The Reserve Bank today relaxed various norms on overseas direct investments to offer more flexibility to the Indian companies and individuals.
“To grant more flexibility to the Indian party, it has been decided to further liberalise various provisions or regulations of overseas direct investments…” the RBI said in a notification.
“…proposals from the Indian party for creation of charge in the form of pledge or mortgage on the immovable or movable property and other financial assets of the Indian Party and their group companies may be considered by the RBI,” it said.
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On bank guarantee for computation of financial commitment, the RBI said, “…the bank guarantee issued by a resident bank on behalf of an overseas JV or WOS of the Indian party, which is backed by a counter guarantee or collateral, shall be reckoned for computation of the financial commitment.”
Keeping in view the nature of the compulsorily convertible preference shares (CCPS), the RBI said, CCPS shall be treated at par with equity shares and the Indian party is allowed to undertake financial commitment based on the exposure to JV by way of CCPS.
Meanwhile, the RBI also relaxed various norms overseas investments by resident individuals as well.
“It has been decided to grant general permission to resident individuals various norms such as acquiring qualification shares of an overseas company for holding the director post, acquiring shares in a foreign company through ESOP scheme etc…” it added.
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