RBI clarifies on revised overseas direct investment by cos

The Reserve Bank on Wednesday issued clarifications on revised guidelines pertaining to overseas direct investment (ODI) by Indian companies, which was notified on August 14, 2013. The guidelines were given to facilitate genuine outward investment requirements of the Indian companies.

The apex bank clarified that investment curbs are not applicable for deals done before August 14. "It was not the intention of the Reserve Bank of India to restrict bona-fide and genuine overseas direct investment transactions by Indian companies," the clarification stated.

The RBI also said that funding of overseas direct investments by External Commercial Borrowings (ECB) will continue with the limit of 400 percent networth. The central bank  had earlier cut the limit from 400 percent to 100 percent.

Meanwhile, it eased norms for raising forex debt from foreign equity holder company and specified that 100 percent networth limit will not be applicable to funds raised from ADR/GDR accounts.