RBI allows Navratna PSUs to invest in oil cos abroad

MUMBAI: Reserve Bank of India on Friday allowed Navratna PSUs to invest in unincorporated oil companies abroad under the automatic route, a move that will help these companies acquire oil and gas blocks overseas.

"In view of the existing controls in place, it has now been decided to further liberalise and simplify the procedures and to allow Navratna PSUs to invest in unincorporated entities in oil sector abroad, under the automatic route," RBI said in a circular issued here.

The guideline would exempt Navratna PSUs - ONGC, HPCL, BPCL, GAIL and IOC - from the requirement of prior approval of RBI for investing in oil companies abroad.

Top oil companies, both in the public and the private sector, have been scouting for opportunities across the globe to acquire exploration and blocks.

Earlier, the companies interested in investing in unincorporated oil sector companies abroad were required to obtain Reserve Bank's approval.

Accordingly, the central bank has asked the authorised dealer banks to allow remittances to the Navratna PSUs for such investments.

The relaxed investment norms will ease some pressure on the RBI which is sitting on huge foreign exchange totalling more than 200 billion dollars and wants more investors to make overseas investments.