| The Reserve Bank of India (RBI) has liberalised overseas investment norms to grant more operational flexibility to Indian corporations in exiting ventures abroad, provision of guarantees for overseas ventures, and setting up of new ventures abroad by proprietary and unregistered partnership firms. |
| The easing of overseas investment norms comes a few days after the setting up of a committee headed by former RBI Deputy Governor SS Tarapore for recommending a road map for capital account convertibility. |
| Companies have been allowed to sell their investments in overseas ventures without prior approval of the RBI if the joint venture or the wholly owned subsidiary is listed in overseas stock exchanges or if the Indian promoter company is listed in India and has a net worth of not less than Rs 100 crore. |
| Indian promoters of foreign ventures having investments of up to $10 million in overseas ventures are also no longer required to seek RBI permission. |
| Hitherto, all disinvestments that involve a "write off", where the amount repatriated on disinvestment is less than the amount of the original investment, needed prior approval. |
| Investment bankers closely associated with a series of overseas buyout deals said the move was important, particularly in the context of the aggressive overseas expansion plans of Indian corporations. |
| The RBI has allowed proprietary and unregistered partnership firms, with a proven track record and a consistently high export performance, to set up joint ventures or wholly owned subsidiaries outside India, to enable recognised star exporters to reap the benefits of globalisation and liberalisation. |
| The central bank has also enlarged the scope of guarantees provided to overseas ventures under the automatic route. |
| It has allowed a group company, a sister concern or an associate company in India "" apart from the promoter company "" to provide guarantees without its prior approval. |
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