With a view to provide enhanced opportunities to invest overseas, the Reserve Bank of India ("RBI"), had on 16th November 2006, increased the ceiling on investments by Mutual Funds registered with the Securities and Exchange Board of India ("SEBI"), pursuant to which the aggregate ceiling for overseas investments by SEBI registered Mutual Funds was enhanced from the then existing limit of USD 2 billion to USD 3 billion.
As per the Annual Policy Statement announced for the year 2007 - 2008 and RBI’s Circular dated 8th May 2007, in order to provide greater opportunity for investment overseas, the aggregate ceiling for overseas investments by Mutual Funds registered with SEBI has been enhanced from USD 3 billion to USD 4 billion.
Subsequently SEBI, on 14th May 2007, pursuant to RBI’s enhancement of the limit of investment by Mutual Funds overseas, has permitted mutual funds to invest in American Depository Receipts / Global Depository Receipts / Foreign Securities within an overall limit of USD 4 billion with a sub-ceiling for individual mutual funds not exceeding 10% of the net assets managed by them as on 31st March of each year and subject to a maximum of USD 200 million per mutual fund.
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