Seminar on Overseas Direct Investment (ODI) regulations and compliance


Seminar on Overseas Direct Investment (ODI) regulations and compliance

Federation of Indian Petroleum Industry (FIPI), along with HDFC Bank Limited as the knowledge partner organized a half-day seminar on “Overseas Direct Investment (ODI) regulations and its compliance” on Friday, November 17th 2023 at Indian Habitat Centre (IHC), Lodhi Road, New Delhi.  The seminar showcased the key changes in ODI regulations and its compliance mechanism. It was attended by senior finance officials of oil and gas industry. 

Mr. Vivekanand, Director (Finance, Taxation & Legal), FIPI began the session with the opening remarks. He welcomed all the distinguished members and participants and experts from HDFC bank and oil and gas industry. He expressed his views on the new Overseas Direct Investment (ODI) regulations launched last year and compliance issued faced by the Indian oil and gas industry. He encouraged participants present during the session to put forward their practical issues/experiences to erudite members of HDFC Bank for a healthy interactive discussion.

HDFC Bank, Cluster Head Mr. Sanjay Thakur, along with Retail Trade & Foreign Exchange services (RTFX) Retail Sales Head, Mr.  Somesh Kakkar began their presentation mentioning the strengths of HDFC namely- the market leader in holding maximum UINs (Unique Identification Number) in Overseas Direct Investments with 15.45% market share, preferred banker for filing Foreign Direct Investment (FDI) forms on the FIRMS portal of RBI, market share of ~9% in India’s foreign trade (merchandise) etc.

Mr. Mehul Sachde, Head-Capital Account Team (ODI desk), HDFC Bank gave a customized presentation for Extant Regulations on ODI. He said that RBI has introduced new changes in ODI rules in August 2022 and explained the difference between ODI and Overseas Portfolio Investment (OPI) under the new changes. He also explained about new definition introduced by RBI i.e., “Control,” “Equity capital,” “Net worth,” “disinvestment” and “Last audited balance sheet.” He mentioned about the three routes of making ODI- Automatic route, where No Prior approval from RBI is required, Approval Route, where prior approval from RBI is required before it is processed by Authorized Dealers (AD) and Prohibited Activities which includes real estate, banking business and dealing in financial products linked to INR without specific approval of RBI.

He then explained the various reporting forms viz, Form FC, Form APR, Form OPI and the timelines for submitting the same to AD Bank. He also provided an insight on the various methods of divestments such as – sale, dilution, gift, buy back, slump sale, liquidation/merger/demerger, accounting write off.

Lastly, he explained the mechanics of ODI in Gift city and ODI in financial sector and said that the relaxation in profitability criteria for COVID years i.e.,2020-21 and 2021-22 provided a gateway for non-financial entities to invest in financial sector companies.

Participants raised number of queries/issues faced by them during the presentation which were well addresses by panellists. The session was very interactive as many queries raised by the participants were resolved by the HDFC bank team.

Lastly, Mr. Vinod Hallan, Executive Director, ONGC Videsh Ltd (OVL) in his vote of thanks, complimented HDFC team for providing a comprehensive presentation on the topic. He appreciated the practical approach and understanding of HDFC executives towards the subject and said that the same helped the members present from the oil and gas industry to enhance their understanding in the subject.  He also thanked FIPI for organising such an engaging session. Last but not the least, he thanked the participants from the energy industry for their active participation during the event.