Date:13/05/2005 URL: http://www.thehindubusinessline.com/2005/05/13/stories/2005051301410600.htm

Back Overseas investment ceiling raised to 200 pc of networth

Our Bureau

Mumbai , May 12

THE Reserve Bank of India has announced that the ceiling of overseas investment for Indian companies has been raised from 100 per cent of their networth to 200 per cent, said a press release from RBI.

Under the automatic route for overseas investment, eligible Indian entities were permitted to invest in overseas joint ventures and in wholly owned subsidiaries up to 100 per cent of their net worth.

In the monetary policy of 2005/2006, RBI had liberalised this to allow companies to invest up to 200 per cent of their networth. This was done with a view to promoting Indian investment abroad and to enable Indian companies to reap the benefits of globalisation.

The ceiling is not applicable to the investments made out of balances held in EEFC accounts and out of the proceeds of ADR / GDR issue.

Authorised dealer banks may allow remittances under the automatic route up to 200 per cent of the net worth as on the date of the last audited balance sheet of the investing companies.