India central bank partially relaxes overseas investment curbs

Reuters

MUMBAI (Reuters) - The Reserve Bank of India on Wednesday partially relaxed some of the restrictions imposed last month on capital outflows from residents, including allowing Indian companies more leeway if they are raising funds via external commercial borrowings.

Companies raising ECBs will be allowed to invest up to 400 percent of their net worth abroad. The RBI had last month reduced the overseas direct investment limit to 100 percent of a company's net worth for all companies, except for a few state-run firms.

The RBI also clarified on Wednesday that overseas direct investment limits would not be applicable on commitments made on or before August 14.

The RBI also said the restriction of 100 percent of net worth shall not apply to financial commitments funded out of exporters' forex account or if funds are raised via either American or global depositary receipts.

(Reporting by Suvashree Dey Choudhury; Editing by Rafael Nam)

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