 "RBI says proven track record must for ODIs by proprietorship concern")
The Reserve Bank of India (RBI) has made it mandatory to have a proven track record for considering the proposal of Overseas Direct Investments (ODI) by a proprietorship concern/unregistered partnership firm in India under the approval route.
"The proprietorship concern/unregistered partnership firm in India has a proven track record, i.e, the export outstanding does not exceed 10% of the average export realisation of the preceding three years and a consistently high export performance," said RBI highlighting the terms and conditions on Thursday.
The changes in terms and conditions have been made keeping in view the changes in the definition/classification of the exporters as per the Foreign Trade Policy of the Ministry of Commerce and Industry issued from time to time.
The proprietorship concern/unregistered partnership firm in India is classified as 'Status Holder' as per the Foreign Trade Policy issued by the Ministry of Commerce and Industry from time to time.
RBI also said that banks should be satisfied that the proprietorship concern / unregistered partnership firm in India is KYC (Know Your Customer) compliant, engaged in the proposed business and has turnover.
It is also necessary that the proprietorship concern / unregistered partnership firm in India has not come under the adverse notice of any government agency or in the list of defaulters to the banking system in India.
Besides that the central bank has said that the amount of proposed investment outside India should not exceed 10% of the average of last three years' export realisation or 200% of the net owned funds of the proprietorship concern/unregistered partnership firm in India, whichever is lower.