The Reserve Bank of India has now liberalised overseas investment norms and allows corporates to invest more money abroad.
In its notification issued here on Friday, RBI hiked the overseas investment limit from 200 per cent of the net worth to 300 per cent of the net worth as on the date of the last audited balance sheet for joint ventures and wholly-owned subsidiaries of Indian entities.
However, the investment limit for partnership firms would still remain unchanged at 200 per cent.In effect, direct investment continues to include equity and loans, while RBI has rationalised the amount of guarantees that will be reckoned as ‘financial commitment.’
From now, 100 per cent of the amount guaranteed will be considered as against 50 per cent of the amount guaranteed earlier. The revised norms are applicable with immediate effect, for new and existing investments.
