Reserve Bank of India has permitted listed Indian entities to make investments in equities of companies registered overseas, subject to certain conditions, up to June 30, 2003.

As a follow-up to the announcements made by the Union Finance Minister Jaswant Singh last week, the central bank has notified that Indian companies can invest abroad in entities, which are listed on a recognised stock exchange and have a shareholding of at least 10 per cent in an Indian company listed on a recognised stock exchange in India (as on January 1 of the year of the investment).

These investments, the RBI said, shall not exceed 25 per cent of the Indian company's net worth, as on the date of latest audited balance sheet.

Resident individuals are permitted to invest in overseas companies indicated without any monetary limit, the RBI said.

On investment by mutual funds, the RBI said they can also invest in such companies and the overall cap has been enhanced to $1 billion.

All transactions have to be routed through authorised dealers and rupee payments have to be received out of the bank account of the investor.