No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2006-2007/375 · issued 04 May 2007 · ~1 min read
Quick answerSEBI-registered domestic Venture Capital Funds can now invest in equity/equity-linked instruments of offshore VC undertakings with SEBI approval, no separate RBI nod needed.
What changed
RBI clarified that domestic VCFs registered with SEBI are permitted to invest only in equity and equity-linked instruments of offshore VC undertakings. Such VCFs must approach SEBI for prior approval, and no separate RBI permission is required.
What it means for you
This simplifies the process for SEBI-registered VCFs looking to invest abroad, as they only need SEBI's nod, not RBI's. Banks should update their procedures to reflect that no RBI approval is needed for these investments, reducing compliance burden.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Inform AD Category-I bank customers about this clarification.
Ensure no separate RBI permission is sought for VCFs with SEBI approval.
Update internal guidelines to reflect the single-regulator approval process.
Who it affects
SEBI-registered Domestic Venture Capital Funds, AD Category-I banks handling overseas investments, Customers of AD Category-I banks involved in VC investments
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 16:55 IST
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Do VCFs need RBI approval for overseas investments now?
No, SEBI-registered VCFs only need prior approval from SEBI; RBI permission is not required separately.
What types of instruments can VCFs invest in offshore?
They can invest only in equity and equity-linked instruments of offshore Venture Capital Undertakings.
📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/375
A. P. (DIR Series) Circular No.50
May 04, 2007
To,
All Category - I Authorised Dealer Banks
Madam / Sir,
Overseas Investment by Venture Capital Funds (VCFs)
Attention of Authorised Dealer Category - I (AD Category - I ) banks is invited to para 2 of A. P. (DIR Series) Circular No. 49 dated April 30, 2007 on Overseas Investment by Indian Venture Capital Funds (VCFs).
2. It is clarified that Domestic Venture Capital Funds registered with SEBI, have been permitted to invest in equity and equity-linked instruments only of off-shore Venture Capital Undertakings. Accordingly, Domestic Venture Capital Funds registered with SEBI, desirous of making investments in off-shore Venture Capital Undertakings may approach SEBI for prior approval. No separate permission from Reserve Bank is necessary for such VCFs.
3. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
4. The directions contained in this Circular have been issued under Section 10 (4) and 11 (1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and is without prejudice to permissions / approval, if any, required under any other law.
Yours faithfully,
(Salim Gangadharan)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/375 · issued 04 May 2007. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3503&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.