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Aug 19 2013, 16:00 IST
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The RBI has restricted overseas direct investment under automatic route to 100 per cent of net worth from 400 per cent under the approval route. (AP) The RBI has restricted overseas direct investment under automatic route to 100 per cent of net worth from 400 per cent under the approval route. (AP)
SummaryThe RBI has restricted overseas direct investment under automatic route to 100 per cent of net worth from 400 per cent under the approval route.

The RBI has restricted overseas direct investment under automatic route to 100 per cent of net worth from 400 per cent under the approval route. This can save $2-3 billion as a large number of FDI seekers will have to do a lot more paperwork.

Outward remittances by resident Indians slashed to $75,000 from $2,00,000 now.

The RBI has allowed banks to pay above the domestic deposit rate (of say, 8.75 per cent) for INR-denominated nonresident Indian NRE deposits of 3+ year maturity. It hiked the cap on FCNRB deposits of 3-5 year maturity by 100 bps to 400 bps + Libor. It exempted these deposits from CRR and SLR.

The government also hopes to gain addition $1 billion in inflows from liberalizing non-resident deposit schemes

Curbing imports on oil, gold, and non-essential imports. So far, the government has announced an increase in import duties on gold, silver and platinum from 8 per cent to 10 per cent. The government also increased duties on gold/silver dore bars and gold ore/concentrate by 2 percentage points. Details on the steps to curb oil and non-essential imports have yet to be revealed. In total, the government expected to save around $ billion on the import bill from these measures

Allowing government-owned financial institutions such as IIFC, IRFC (Indian railway finance corporation) and Power Finance Corporation to issue quasi-sovereign bonds ($4 billion).

PSU oil companies can now raise external commercial borrowings (ECBs) while ECB norms have also been also further liberalise ($6 billion).

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