Mumbai: Following the budgetary announcements on relaxation of capital account transactions, Reserve Bank of India has permitted Indian corporates to invest upto $ 100 million in overseas ventures through the automatic route in diversified sectors.

Corporates would also be allowed to prepay external commercial borrowings (ECBs) of over $ 100 million under the automatic route, RBI said in a release in Mumbai on March 2.

Earlier, they could prepay ECBs only upto $ 100 million without RBI approval and this relaxation in ceiling would be available until further notice, subject to review, it said.

Corporates were up to now permitted to invest in overseas joint venture or wholly owned subsidiary engaged in the same core activity, which contributed atleast 50 per cent of its average turnover, under the automatic route.

The apex bank said the corporates would be allowed make overseas investment up to 100 per cent of net-worth as against the previous ceiling of 50 per cent.

PTI