Reserve Bank of India (RBI) on 29 December 2014 liberalised norms for Indian companies investing abroad. The liberalization of norms was part of series of amendment done by RBI from time to time in the Foreign Exchange Management (Transfer or Issue of any Foreign Security) (Amendment) Regulations, 2004.
Liberalised norms
• Bank may permit creation of charge on the shares of the Joint Venture/Wholly Owned Subsidiary/Step down Subsidiary (JV/WOS/SDS) of an Indian party in favour of a domestic or overseas lender for securing funded and/or non-funded facility.
• The loan availed by the JV/WOS/SDS from the domestic/overseas lender shall be utilized only for its core business activities overseas and not for investing back in India in any manner whatsoever.
• Bank may permit creation of charge on the domestic assets of an Indian party in favour of an overseas lender for securing the funded and/or non-funded facility.
• Bank may permit creation of charge on the overseas assets (excluding the shares) of the JV/WOS/SDS of an Indian party in favour of a domestic lender for securing the funded and/or non-funded facility.
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