TaxTMI 
TaxTMI 
Borrowings in Foreign Exchange under the Approval Route (Regulation 6(2))
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....al institutions dealing exclusively with infrastructure or export finance such as IDFC, IL& FS, Power Finance Corporation, Power Trading Corporation, IRCON and Exim Bank. (c) Banks and financial institutions which had participated in the textile or steel sector restructuring package as approved by the Central Government. (d) Entities falling outside the purview of the Automatic Route as per Schedule I. (e) Any other entity as specified by the Reserve Bank. (ii) Lenders The borrowings in foreign currency by way of issue of bonds, floating rate notes or other debt instruments by whatever name called may be made from - (a) International bank or export credit agency or international capital market or (b) Multilateral financial institutions, namely, IFC, ADB, CDC etc., or (c) Foreign collaborator or foreign equity holder as specified by the Reserve Bank or (d) Supplier of equipments provided the amount of loan raised does not exceed the total cost of the equipment being supplied by the lender or ^1[(e) Any other eligible entity as prescribed by the Reserve Bank in consultation with Government of India (iii)....
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....tal investment), (v) post harvest storage infrastructure for agriculture and horticulture produce including cold storage, (vi) soil testing laboratories and (vii) cold chain (includes cold room facility for farm level pre-cooling, for preservation or storage or agriculture and allied produce, marine products and meat. (g) Any other sectors as prescribed by the Reserve Bank in consultation with Government of India.] (b) for first stage acquisition of shares in the disinvestment process and also in the mandatory second stage offer to the public under the Government's disinvestment programme of PSU shares. (c) for direct investment in overseas Joint Ventures (JV)/Wholly Owned Subsidiaries (WOS) subject to the existing guidelines on Indian Direct Investment in JV/WOS abroad. ^6[(AA) Borrowings in foreign exchange per borrower company per financial year up to such amounts as directed by the Reserve Bank from time to time shall be permitted for such permissible end-uses as indicated by Reserve Bank from time to time] (B) Other than the purposes specified hereinabove, the borrowings shall not be utilised for any other purpose including the following pu....
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....ctives issued by the Reserve Bank from time to time. ^8[viii) 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] (ix) 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 as specified by the Reserve Bank. (x) Drawal of loan Draw-downs of borrowing in foreign exchange shall be made strictly in accordance with the terms of the loan agreement only after obtaining the loan registration number from the Reserve Bank. (xi) Reporting The borrower shall adhere to the reporting procedure as specified by THE Reserve Bank from time to time. (xii) Debt Servicing The designated Authorised Dealer (AD) shall have the general permission to make remittances of principal, interest and other charges in conformity with the guidelines on borrowing in foreign exchange from overseas, issued by Central Government / the Reserve Bank from time to time. ^9[(xiii....
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....nbsp; **************** NOTES:- 1. Inserted vide Notification No. 157/2007 dated 30-08-2007, w.e.f. 01-08-2005. 2. Inserted vide Notification No. 157/2007 dated 30-08-2007, w.e.f. 01-08-2005. 3. Has been numbered as Exception 1 and shall be deemed to have been numbered with effect from the 4th day of November, 2005 and after Exception 1 as so numbered, the above Exception has been inserted and shall be deemed to have been inserted with effect from the 4th day of November, 2005 4. Has been substituted vide Notification No. 157/2007 dated 30-08-2007, w.e.f. 04-12-2006 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 US$ 20 Million and upto US$ 500 Million or equivalent Not less than 5 years Note - Borrowing up to US$ 20 Million can have call/put option provided the minimum average maturity of 3 years as prescribed above is complied with before exercising call/put option. 5. Substituted vide Notification [No. FEMA 2....