This
Regulatory Alert summarizes the circulars no. A.P.(DIR Series) Circular No. 23
& A.P.(DIR Series) Circular No. 24 issued by the Reserve Bank of India on
14 August 2013 amending the investment conditions prescribed under the Overseas
Direct Investment Regulations and Liberalized Remittance Scheme.
These
latest measures taken by the Central Bank are intended to arrest the declining
Indian currency by curbing the outflow of foreign exchange. The reduction in
investment limit for outbound investment would restrict Indian company’s
overseas expansion plan and will also impact Merger & Acquisition activities
of the Indian companies overseas. Further, by permitting the individuals within
LRS limit to invest under the ODI scheme has given flexibility to Individuals to
invest abroad at the same time it has also ensured that individuals comply with
the ODI guidelines and reporting requirements which will help RBI to monitor
these investments.
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