Prohibition on direct overseas investment bars investments into FATF non-cooperative jurisdictions, with banks required to notify clients under FEMA. Indian parties are prohibited from making direct overseas investments-whether as joint ventures, wholly owned subsidiaries, or step down subsidiaries-in jurisdictions identified by the FATF as non co operative countries and territories, as per the FATF list or RBI notification; this prohibition is implemented by amendment to the FEMA notification, Authorised Dealer Category I banks must inform constituents, and Master Directions will be updated, with the directions issued under FEMA without prejudice to other statutory permissions.