2 min readMumbaiAug 17, 2013 04:20 AM IST
First published on: Aug 17, 2013 at 04:20 AM IST
The Reserve Bank of India RBI has clarified that its measures to put curbs on outflows were only a roll-back of its measures announced six years ago and companies can still approach the central bank directly for overseas investments above the stipulated limit.
The RBI had rolled back some measures which it had taken 6 or 7 years back. Theres no truth in the rumours about bringing capital controls, an RBI official said. Under Liberalised Remittance Scheme LRS,Indians can take out 75,000 now. China allows remittances of 50,000 a year only despite holding forex reserves of 3 trillion, the RBI source said.
On its move to slash the amount Indian companies can invest overseas without seeking approval to 100 per cent of their net worth from 400 per cent,the official said,people havent read our notification closely. We have said Indian companies can still apply for 400 per cent of their net worth through the approval route. They should approach the RBI directly.
The only measure which we have introduced is banning of property purchase abroad, the RBI official said. We advanced the cap on remittances six years ago. This has been rolled back now. The notification says,Any ODI overseas direct investment in excess of 100 per cent of the net worth shall be considered under the Approval Route by the RBI.
Under the LRS,the RBI allowed residents to remit up to an amount of 200,000 a financial year for any permitted current or capital account transactions or a combination of both with effect from September 26,2007. The scheme was introduced in February 2004 to freely remit up to 25,000 a year. The amount was enhanced to 50,000 a financial year in December 2006,then further to 100,000 a financial year in May 2007 before enhancing it to 200,000 in September 2007.
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