AP (DIR Series) (2002-2003) Circular No. 48, dated 16-11-2002
Attention
of authorised dealers is invited to paragraph 2 of AP (DIR Series) Circular No.
40 dated April 29, 2002, in terms which banks have been permitted to invest
upto 25 per cent of their unimpaired Tier 1 capital or USD 10 million whichever
was higher in overseas money market investments and/or debt instruments.
2. With a
view to accord further flexibility in funds management to banks in India it has
been decided that banks may now invest upto 50 per cent (as against the
existing ceiling of 25 per cent) of their unimpaired Tier 1 capital or USD 25
million (as against the existing ceiling of USD 10 million) whichever is higher
in overseas money market instruments and/or debt instruments.
3. All the
other existing instructions including the limit for borrowing from overseas
market remain unchanged.
4. Necessary
amendments to the Foreign Exchange Management (Borrowing or Lending in Foreign
Exchange) Regulations, 2000 are being notified separately.
5. The
directions contained in this circular have been issued under section 10 (4) and
section 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999).