Dollar norms eased for investments

Dollar norms eased for investments

Our Banking Bureau / Mumbai March 28, 2006

The Reserve Bank of India (RBI) today liberalised overseas investment norms to grant more operational flexibility to Indian corporations in exiting ventures abroad, provision of guarantees for overseas ventures, and setting up of new ventures abroad by proprietary and unregistered partnership firms.

The easing of overseas investment norms comes a few days after the setting up of a committee headed by former RBI Deputy Governor SS Tarapore for recommending a road map for capital account convertibility.

Companies have been allowed to sell their investments in overseas ventures without prior approval of the RBI if the joint venture or the wholly owned subsidiary is listed in overseas stock exchanges or if the Indian promoter company is listed in India and has a net worth of not less than Rs 100 crore.

Indian promoters of foreign ventures having investments of up to $10 million in overseas ventures are also no longer required to seek RBI permission.

Hitherto, all disinvestments that involve a