RBI/2014-15/117
A.P. (DIR Series) Circular No.1
July 3, 2014
To
All Category – I Authorised Dealer Banks
Madam/ Sir,
Financial Commitment (FC) by Indian Party under Overseas Direct
Investments (ODI) – Restoration of Limit
Attention of the Authorised Dealer (AD - Category I) banks is invited
to the provisions of the
Notification No. FEMA.120/RB-2004 dated July 7, 2004
[Foreign Exchange Management (Transfer or Issue of any Foreign Security)
(Amendment) Regulations, 2004] (the Notification), as amended from time to time
and the
A.P.(DIR Series) Circular No. 23 dated August 14, 2013 and
A.P.(DIR
Series) Circular No. 30 dated September 04, 2013.
- 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).
- All the other provisions under the Notification ibid shall remain unchanged.
- AD - Category I banks may bring the contents of this Circular to the notice
of their constituents and customers concerned.
- The directions contained in this Circular have been issued under Sections
10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999)
and are without prejudice to permissions/ approvals, if any, required under any
other law.
Yours faithfully
(C.D. Srinivasan)
Chief General Manager