RBI SAYS NO OVERSEAS FDI OR ODI IF OLD LAPSES NOT FIXED

 

RBI SAYS NO OVERSEAS FDI OR ODI IF 

OLD LAPSES NOT FIXED

The RBI  will be cracking down on corporates with unresolved ODI of FDI violations, setting an August 25, 2025 deadline.

NON-RECTIFICATION PAST LAPSES

Companies failing to rectify past lapses face compounding or adjudication before making further foreign financial commitments.

FACE ADJUDICATION BY THE ENFORCEMENT DIRECTORATE

In an email sent in late April, the RBI instructed bank compliance heads to notify all corporate clients that failure to rectify past lapses by August 25, 2025, would require them to either undergo the compounding process or face adjudication by the Enforcement Directorate before making any further foreign financial commitments, according to banking industry sources.

WHAT ARE THE UNREPORTED  ODIs

·      Incorporating an offshore subsidiary company

·      Acquiring a stake in an unlisted foreign company

·      Acquiring in excess of 10% of any foreign listed company

·      Extending loans  or guarantee to a foreign company

At present  an company Indian company can invest as ODI 4 times of its net-worth.

Contraventions pertain to a company’s failure to disclose financial details of earlier ODIs either inadvertently or due to lack compliance.

Now companies have to rectify past lapses by August 25, 2025 else they can not make any further ODI investments.

R V Seckar FCS , LLB 79047 19295