TaxTMI 
TaxTMI 
TaxTMI 
Borrowings in Foreign Exchange under the Automatic Route (Regulation 6(1))
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.... availing foreign currency borrowing. ]] ^11[(b) Non Government Organisations and Micro Finance Institutions engaged in micro-finance activities may borrow in foreign exchange under this Schedule under such terms and conditions as specified by the Reserve Bank from time to time : ^16[provided in case the entity is under investigation/ adjudications/appeals by the law enforcing agencies, for violation of any of the provision of the regulations under the Act, it shall indicate to the Authorized Dealers (ADs) about pendency of investigations/adjudications/appeals, while availing foreign currency borrowing.]] (c) Any other entity as specified by the Reserve Bank. ^17[provided in case the entity is under investigation/ adjudications/appeals by the law enforcing agencies, for violation of any of the provision of the regulations under the Act, it shall indicate to the Authorized Dealers (ADs) about pendency of investigations/adjudications/appeals, while availing foreign currency borrowing.]] (ii) Amount ^2[a. The borrowing in foreign exchange by an entity as specified in paragraph (i) (a) of section I of Schedule I, under the Automatic....
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....ns and buildings), (ii) roads and bridges, (iii) ports, (iv) inland waterways, (v) airport and (vi) urban public transport (except rolling stock in case of urban road transport); (d) Water and sanitation which will include (i) water supply pipelines, (ii) solid waste management, (iii) water treatment plants, (iv) sewage projects (sewage collection, treatment and disposal system), (v) irrigation (dams, channels, embankments, etc.) and (vi) storm water drainage system; (e) (i) mining, (ii) exploration and (iii) refining; (f) Social and commercial infrastructure which will include (i) hospitals (capital stock and includes medical colleges and para medical training institutes), (ii) Hotel Sector which will include hotels with fixed capital investment of Rs. 200 crore and above, convention centres with fixed capital investment of Rs. 300 core and above and three star or higher category classified hotels located outside cities with population of more than 1 million (fixed capital investment is excluding of land value), (iii) common infrastructure for industrial parks, SEZs, tourism facilities, (iv) fertilizer (capital investment), (v) post harvest storage infra....
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....shall be subject to Regulation 8 of Notification No.FEMA.21/ 2000-RB dated May 3, 2000 and Regulation 3 of Notification No.FEMA.20/2000-RB dated May 3, 2000, respectively. (b) Guarantee Banks, financial institutions and Non-Banking Finance Companies shall not provide (issue) guarantee or Letter of Comfort or Standby Letter of Credit in favour of overseas lender on behalf of their constituents for their borrowings in foreign exchange. (viii) Prepayment Notwithstanding the provisions of clause (v) above, prepayment of outstanding foreign currency loan may be made as per the directives issued by the Reserve Bank from time to time. ^7[(ix) Parking of loan amount The proceeds of borrowings in foreign exchange availed under the schedule may, pending utilisation for permissible end-uses be parked abroad or in India as directed by the Reserve Bank from time to time]. (x) Loan Agreement The loan agreement entered into by the borrower with the overseas lender shall strictly conform with these Regulations.. The procedure for obtaining loan registration number would be prescribed by the Reserve Bank. (xi) Drawal of Loan Draw-downs of borrowing in foreign exchan....
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.... ^19[4. Provided that under these Regulations, the Reserve Bank may, in consultation with the Government of India, prescribe for the automatic route, any provision or proviso regarding various parameters listed in paragraphs 1 to 3 above of this Schedule or any other parameter as prescribed by the Reserve Bank and also prescribe the date from which any or all of the existing proviso will cease to exist, in respect of borrowings from overseas, whether in foreign currency or Indian Rupees, such as addition / deletion of borrowers eligible to raise such borrowings, overseas lenders / investors, purposes of such borrowings, change in amount, maturity and all-incost, norms regarding security, pre-payment, parking of ECB proceeds, reporting and drawal of loan, refinancing, debt servicing, etc. ] ************** NOTES:- 1. Substituted vide Notification No. 142/2005 dated 6/12/2005, before it was read as, "i) Eligibility:- Any corporate registered under the Companies Act, 1956 shall be eligible to borrow in terms of this Schedule. However, financial intermediaries (such as banks, financial institutions (FIs), housing financing companies, ....
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....as, "(b) Non-Government Organisations engaged in micro-finance activities may borrow in foreign exchange under this Schedule under such terms and conditions as specified by the Reserve Bank from time to time. ^9[Provided that they have not at any time violated any of the provisions of these regulations and no investigation is pending against them for contravention of the provisions of these regulations under the Act.]" 12. Substituted vide Notification [No. FEMA 232/2012-RB, dated 30-05-2012, w.e.f. 19-12-2011, before it was read as "b. The borrowings in foreign currency under as specified in paragraph (i) (b) of section I of Schedule I, by a non-government organisation engaged in micro-finance activities shall not exceed USD 5 million or equivalent during a financial year (April - March)." 13. Substituted vide Notification [No. FEMA 232/2012-RB], Dated 30-05-2012, w.e.f. 23-09-2011 before it was read as, "Maturity The maturity of the borrowings in foreign exchange shall be as under : Amount Minimum Average Maturity i) Up to US$ 20 Million or equivalent Not less than 3 years ii) Exceeding ....