The Reserve Bank of India on Thursday relaxed norms for overseas 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 RBI even when the total financial commitment of the Indian Party is within the eligible limit under the automatic route...," said the apex bank in a notification.
The financial commitment should be limited within 400 per cent compared to earlier level of 100 per cent of the net worth as per the last audited balance sheet of the company, it said. “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 FEMA provisions, prior to August 14, 2013,” it said.
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