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| * The overseas investment limit (total financial commitments) for Indian companies investments in joint ventures (JVs)/ wholly owned subsidiaries (WOS) abroad to be enhanced from the existing 200 per cent of net worth to 300 per cent of net worth, as per the last audited balance sheet.
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* It has been decided to introduce a revised reporting framework on overseas investments for monitoring capital flows.
* The limit for portfolio investment abroad in listed overseas companies by listed Indian companies enhanced from 25 per cent of net worth to 35 per cent of net worth.
* The aggregate ceiling on overseas investment by mutual funds to be increased from $3 billion to $4 billion.
* Prepayment of external commercial borrowings (ECBs) up to $400 million to be allowed as against the existing limit of $300 million by authorised dealer banks without prior approval of the Reserve Bank, subject to compliance with stipulated minimum average maturity period as applicable to loans.
* The present remittance limit of $50,000 to be enhanced to $100,000 per financial year for any permitted current or capital account transaction or a combination of both by individuals.
* The range of hedging tools available to the market participants to be expanded.
* Authorised dealer Category-I banks to be allowed to permit domestic
producers/users to hedge their price risk on aluminium, copper, lead, nickel and zinc in international commodity exchanges, based on their underlying economic exposures and to permit actual users of aviation turbine fuel (ATF) to hedge their economic exposures in the international commodity exchanges based on their domestic purchases.
* At present, forward contracts booked by importers and exporters of goods and services in excess of 50 per cent of the eligible limits have to be on deliverable basis and cannot be cancelled. This limit is to be enhanced to 75 per cent.
* The forward contracts entered by residents for hedging overseas direct
investments to be allowed to be cancelled and rebooked.
* Small and medium enterprises (SMEs) to be permitted to book forward contracts without underlying exposures or past records of exports and imports through authorised dealers with whom the SMEs have credit facilities. The SMEs are also to be permitted to freely cancel and rebook the contracts.
* Resident individuals to be permitted to book forward contracts without production of underlying documents up to an annual limit of $100,000 which can be freely cancelled and rebooked.
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| * A Working Group to be set up on Currency Futures to study the international experience and suggest a suitable framework to operationalise the proposal, in line with the current legal and regulatory framework.
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In respect of resident corporates, authorised dealers be allowed to:
* Permit remittances on account of donations by corporates for specified
purposes, subject to a limit of 1 per cent of their foreign exchange earnings
during the previous three financial years or US $ 5 million, whichever is lower.
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| * Permit Indian companies to remit up to US $ 10 million as against the current limit of US $ 1 million for consultancy services for executing infrastructure projects.
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| * Allow remittance of foreign exchange towards reimbursement of preincorporation expenses incurred in India where the remittance does not exceed 5 per cent of the investment brought into India or US $ 100,000 whichever is higher, on the basis of certification from statutory auditors.
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| * Permit remittances on account of cash calls for the purpose of oil exploration, provided the operator/ consortium member in India submits documents to the satisfaction of the authorised dealer.
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| * Allow remittances on account of requests from Business Process Outsourcing (BPO) companies towards payment of the cost of equipment to be installed at overseas sites in connection with setting up of International Call Centres, subject to specified terms and conditions.
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| * Open foreign currency accounts in India for ship manning/ crew managing agencies that are rendering services to shipping companies incorporated outside India.
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* Remit winding up proceeds of companies under liquidation, subject to orders issued by the official liquidator or a court in India or under any scheme framed by the Government of India and also subject to tax compliance.
* A uniform period of 6 months for surrender of received/ unspent/ unused foreign exchange from the date of receipt/ purchase/ acquisition/ date of return of the resident individual traveller.
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| * Authorised dealers to be allowed to open escrow/ special accounts on behalf of non-residents corporates, subject to specific conditions where such accounts are required to be opened in terms of the SEBI regulations for open offers/delisting offers/exit offers and the like.
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| * The facility of operation of accounts by power of attorney holder is to be extended to NRO account holders.
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| * At the request of the depositor, authorised dealers to be allowed to permit remittance of the maturity proceeds of FCNR (B) deposits to third parties outside India, provided the authorised dealer is satisfied about the bonafides of the transaction. |
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