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RBI for proper monitoring of foreign direct investment

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The Reserve Bank of India (RBI) has revamped its overseas direct investment application process to provide banks fast and easy accessibility to data for reference purposes and to improve the “coverage and ensure proper monitoring of the flows in a dynamic environment”.
The new process will be much more nuanced than earlier, where the Indian party has to furnish more details about its investments and remittances. The new scheme is for more nuanced information on direct investments in joint ventures, wholly-owned subsidiaries and any remittances and other forms of financial commitments by an Indian party (which can be any Indian corporate entity or individual).
It is not clear yet if the same set of rules will apply for remitting money abroad under the liberalised remittance scheme (LRS), but if so, it will be dissemination of information on a granular basis. Under the LRS scheme, an individual can freely take out $250,000 every year. A company can invest up to a certain percentage of its net worth (equity plus reserves) in overseas subsidiaries and hence, there is no absolute cap prescribed by RBI.
Business Standard New Delhi, 15th April 2016

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