RBI/2009-10/376
A.P. (DIR Series) Circular No.45
April 01, 2010
To
All Category – I Authorised Dealer Banks
Madam / Sir,
Overseas Investments - Liberalisation
Attention of Authorised Dealer Category - I (AD Category - I) banks is invited
to para 3 of
A.P. (DIR Series) Circular No. 48 dated June 03, 2008, in terms of
which Indian entities are permitted to invest in overseas unincorporated
entities in the oil sector, up to 400 per cent of the net worth of the Indian
company, under the automatic route.
- As a measure of further liberalisation, it has now been decided, in
consultation with the Government of India, to allow Indian companies to
participate in a consortium with other international operators to construct and
maintain submarine cable systems on co-ownership basis under the automatic
route. Accordingly, AD Category - I banks may allow remittances by Indian
companies for overseas direct investment, after ensuring that the Indian company
has obtained necessary licence from the Department of Telecommunication,
Ministry of Telecommunication & Information Technology, Government of India to
establish, install, operate and maintain International Long Distance Services
and also by obtaining a certified copy of the Board Resolution approving such
investment. Accordingly, these transactions may be reported by the Indian
entities investing in the consortium to the AD Category - I banks in the format
laid down in
A.P. (DIR Series) Circular No. 68 dated June 1, 2007 and by the AD
Category –I banks to the Reserve Bank in terms of
A.P. (DIR Series) Circular No.
36 dated February 24, 2010 for allotment of Unique Identification Number.
- All such investments would be subject to the reporting requirements as
prescribed in Regulation 15 (iii) of Notification No. FEMA 120/RB-2004 dated
July 7, 2004 [Foreign Exchange Management (Transfer or Issue of any Foreign
Security) Regulations, 2004], as amended from time to time.
- 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, 1999 (42 of 1999) and is
without prejudice to permissions / approvals, if any, required under any other
law.
Yours faithfully,
(Salim Gangadharan)
Chief General Manager-in-Charge