TMI BlogOverseas Direct Investments – Rationalization/ClarificationsX X X X Extracts X X X X X X X X Extracts X X X X ..... this circular along with the answers / clarifications. 2. It is clarified that all the financial commitments made on or before August 14, 2013, in compliance with the earlier limit of 400% of the networth of the Indian Party under the automatic route will continue to be allowed. In other words, such investments shall not be subject to any unwinding or approval from the Reserve Bank. 3. Attention of Authorised Dealer Category - I (AD Category - I) banks is also invited to the provisions under Regulation 6 of the Notification ibid, in terms of which the limit of financial commitments for an Indian Party (presently 100% of its net worth) shall not apply to the financial commitments funded out of EEFC account of the Indian Party or out of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revised limit of 100%, under the automatic route. Any financial commitment beyond the 100% cap shall require prior approval of the Reserve Bank under the approval route for ODI. 2. What happens if the fresh financial commitments, which are up to the earlier limit of 400%, have been committed on or before August 14, 2013 by the Indian Party? Would such cases attract the provisions of the present circular? In case of an already contracted/committed financial commitment for an existing JV/WOS, the earlier limit of 400%, under the automatic route, would apply. The onus of ensuring the veracity/authenticity of the contract/commitment before permitting remittances will lie with the designated AD bank. Such cases should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated as fresh financial commitment by the new Indian Party and it would have to be within the revised limit of 100%, under the automatic route. 7. In para 3 of the Circular, term Government of India has been prescribed. Keeping in view that all the proposals of ODI by Navratna PSUs / OVL / OIL are not approved by the GoI, whether all the proposals need to be approved by the GoI for being eligible under the automatic route without any limit? The term Government of India may be considered to read as the 'Competent Authority . Competent Authority , depending on the amount involved, would be (1) Board of Directors of the respective PSU, (2) Empowered Committee of the Secretaries (ECS); and (3) Cabinet Committee on E ..... X X X X Extracts X X X X X X X X Extracts X X X X
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