RBI Circular on ‘Financial Commitment (FC) by Indian Party under Overseas Direct Investments (ODI) – Restoration of Limit’

RBI Circular on ‘Financial Commitment (FC) by Indian Party under Overseas Direct Investments (ODI) – Restoration of Limit’

1. The Reserve Bank of India issued a Circular on ‘Financial Commitment (FC) by Indian Party under Overseas Direct Investments (ODI) – Restoration of Limit’ on July 03, 2014. The web-link of the said Circular is as below for ready reference:
https://rbidocs.rbi.org.in/rdocs/notification/PDFs/01APR030714F.pdf

2. Highlights of said Circular are as below:
A.P. (DIR Series) Circular No. 1 dated July 03, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Financial Commitment (FC) by Indian Party under Overseas Direct Investments (ODI) – Restoration of Limit’

On a review, it has been decided to restore the limit of Overseas Direct Investments (ODI)/ 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 has, however, been decided that any financial commitment exceeding USD 1 (one) billion (or its equivalent) in a financial year would require prior approval of the Reserve Bank even when the total FC of the Indian Party is within the eligible limit under the automatic route (i.e., within 400% of the net worth as per the last audited balance sheet).

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