HEDGING OF OVERSEAS DIRECT IN V EST M ENTS BY RESIDENTS - LIBERALISATION

To provide greater flexibility to residents with overseas direct investments (in equity and loan), it has been decided to allow cancellation of forward/ option contracts entered into with Authorised Dealer Category – I banks to hedge the exchange risk arising out of such investments. Further, 50 per cent of the cancelled contracts may be allowed to be re booked. All other conditions and guidelines contained in A. P. (DIR Series) Circular No. 47 dated December 12, 2003 remain unchanged.