##quacy, debt - equity ratio, credit - concentration ratio, adherence to sound accounting practices, uniform disclosure requirements and assets valuation. the joint parliamentary committee ( jpc ), appointed in connection with the irregularities in the securities transactions, had also recommended that legislative framework should be strengthened to vest in rbi more powers to effectively regulate nbfcs. the extant regulatory and supervisory framework as it stands today is based on the recommendations of the shah and khanna committees ( 1992 and 1995 ). the growing significance of nbfcs was also recognized by the second narasimham committee ( 1998 ) as well as by the rbi in its discussion paper on harmonisation of the role and operations of dfis and banks. recognizing the increasing significance of the sector, the working group on money supply ( chairman : dr. y. v. reddy ) in 1998 proposed a new measure of liquidity aggregate incorporating nbfcs with public deposits of ₹. 0. 20 billion and above. there was a significant increase in the nature of nbfc activities in the nineties. nbfcs grew sizably both in terms of their numbers as well as the volume of business transactions. the bis central bankers ’ speeches number of nbfcs grew more than seven - fold from 7, 063 in 1981 to 51, 929 in 1996. accordingly, based on the recommendations of the shah committee, the rbi act was amended in january 1997 to provide a comprehensive legislative framework for regulation of nbfcs by effecting changes in the provisions contained in chapter iii - b and chapter v of the act and vested more powers with the rbi. the regulatory framework was based on the three pillars viz., onsite supervision, offsite monitoring and exception reporting by auditors. though the amended act provided for registration of all nbfcs, the focus continued to be the protection of depositors ’ interest thus covering the deposit taking nbfcs, while keeping the non - deposit taking nbfcs subject to minimal regulation. these measures resulted in consolidation of the sector, reduction in the number of deposit taking nbfcs, reduction in the quantum of public deposits and increase in the number of non - deposit taking nbfcs. the number of deposit taking nbfcs, including residuary non - banking finance companies ( rnbcs ), decreased from 1, 429 in march 1998, to 273 in march 2012. the deposits held by these companies ( including rnbcs ) decreased from ₹. 238 billion to

also be seen as a corporate strategy to promote the brand image and utilisation of raw materials available in the host country. in the indian context, overseas investments have been primarily driven by either resource seeking or market seeking or technology seeking motives. of late, there has been a surge in resource seeking overseas investments by indian companies, especially to acquire energy resources in australia, indonesia and africa. it is against this background that i intend to speak on recent trends and emerging issues in relation to indian outward fdi. i am thankful to bombay chamber of commerce for choosing this topical subject for today ’ s discussion. in my presentation, i would briefly talk about the evolution of outward fdi policy in india, trends and analysis of outward fdi, funding pattern of outward fdi, measures taken by the reserve bank of india and government of india, emerging issues and end with some thoughts on way forward. bis central bankers ’ speeches b. evolution of outward foreign investment policy in india change in policy environment across the economies has greatly influenced the outward investment pattern in the global economy. nonetheless, recognising the concerns of capital outflows, governments in different countries, particularly emerging and developing economies, have been relatively more circumspect on undertaking policy liberalisation of outward investment. therefore, it is important to highlight how the indian policy in this regard has evolved over time. in the indian context, overseas investments in joint ventures ( jv ) and wholly owned subsidiaries ( wos ) have been recognised as important channels for promoting global business by the indian entrepreneurs. the broad approach has been to facilitate outward foreign direct investment through joint ventures and wholly owned subsidiaries and provision of financial support to promote exports including project exports from india. with a steady rise in capital inflows, particularly in the second half of 2000s, the overall foreign exchange reserve position provided comfort to progressive relaxation of the capital controls and simplification of the procedures for outbound investments from india. three distinct overlapping phases as under can be discerned in the evolution of the indian outward fdi policies. phase i ( 1992 to 1995 ) : period of liberalization of indian economy guidelines on outward fdi were in place before the process of liberalisation and globalisation of indian economy in 1991 – 92. policy changes since 1992 were undertaken keeping in view the changing needs of a growing economy. understandably, the rules were quite restrictive and subject to conditions of no cash remittance and mandatory repatriation of dividend from the profits from the