cash reserve ratio and statutory liquidity ratio requirements.
- In NRE deposits, the interest rate will be deregulated on deposits with maturity of 3 years or more, while in FCNR (B) deposits of 3-5 years, the ceiling has been relaxed to LIBOR plus 400 bps from 300 bps.
HIGHER FDI LIMITS
India has raised the cap on foreign direct investment in asset reconstruction companies to 74 percent from 49 percent, to help attract capital inflows to support a sagging rupee.
FOREIGN EXCHANGE OUTFLOWS
The RBI has announced measures to reduce foreign exchange outflows by resident Indians.
- It has cut the limit for overseas direct investments (ODI) under the automatic route for all new transactions to 100 percent of net worth from 400 percent.
- The reduced limit would also apply to remittances made by Indian companies setting up unincorporated entities outside of the country in the energy and natural resources sectors, but would not apply to ONGC Videsh Ltd, the foreign unit of Oil and Natural Gas Corp, or Oil India Ltd.
- The RBI has also reduced the limit for remittances made by resident individuals under the liberalised remittance scheme to $75,000 from $200,000 per financial year.
- It has banned use of remittances for purchases of property outside India.