RBI Issues Draft Proposals to Liberalise Overseas Investments Normns

The Reserve Bank of India (RBI) has

Issued two draft documents viz, Foreign

Exchange Management (FEM) (Non-debt Instruments Overseas Investment (O1)) Rules, 2021 and FEM (O) Regulations, 2021 by rationalizing the existingProvisions that are governing overseasInvestment.

• Objective: To liberalize the regulatory

Framework of overseas investments

And promote ease of doing business.

•The Draft FEM (Non-debt Instruments

O1) Rules, 2021 has outlined the

Restrictions on overseas investments.

• The draft on FEM (O) Regulations,

2021 enables the Indian entity to lend

Or invest in any debt instruments

Issued by a foreign entity subject to

Such loans duly backed by a loan

Agreement.

• RBI imposed a monetary penalty of Rs

1 crore on Cooperatives Rabobank UA,

Mumbai, Maharashtra, for Contravention of certain provisions of

The Banking Regulation Act, 1949 and

Directions related to ‘transfer to reserve

Funds’

About Reserve Bank of India (RBI):

Reserve Bank of India has four fully

Owned subsidiaries.They are

i.Deposit Insurance and Credit Guarantee

Corporation of India (DICGC)

ii.Bharatiya Reserve Bank Note Mudran

Private Limited (BRBNMPL)

iii. Reserve Bank Information Technology

Private Limited (ReBlIT)

iv.Indian Financial Technology and Allied

Services (IFTAS)

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