TaxTMI 
TaxTMI 
Master Circular on External Commercial Borrowings and Trade Credits((Updated as on September 11, 2015)
X X X X Extracts X X X X
X X X X Extracts X X X X
....refer to respective circulars/ notifications for detailed information, if so needed. 3. This Master Circular is being updated from time to time as and when the fresh instructions are issued. The date up to which the Master Circular has been updated is suitably indicated. Yours faithfully (B P Kanungo) Principal Chief General Manager Index PART I EXTERNAL COMMERCIAL BORROWINGS (ECB) I.(A) AUTOMATIC ROUTE i) Eligible Borrowers ii) Recognised Lenders iii) Amount and Maturity iv) All-in-cost ceilings v) End-use vi) Payment for Spectrum Allocation vii) End-uses not permitted viii) Guarantees ix) Security x) Parking of ECB proceeds xi) Prepayment xii) Refinancing of an existing ECB xiii) Debt Servicing xiv) Corporates Under Investigation xv) Procedure I.(B) APPROVAL ROUTE i) Eligible Borrowers ii) Recognised Lenders iii) Amount and Maturity iv) All-in-cost ceilings v) End-use vi) Repayment of Rupee loans and/or fresh Rupee capital expenditure for companies with consistent forex earnings vii) ECB for Low Cost Affordable Housing viii) 3G Spectrum Allocation ix) End-uses not permitted x) Gu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Indian company expressed in foreign currency, and the principal and interest in respect of which are payable in foreign currency. The bonds are required to be issued in accordance with the scheme viz., "Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993", and subscribed by a non-resident in foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole, or in part, on the basis of any equity related warrants attached to debt instruments. The ECB policy is applicable to FCCBs. The issue of FCCBs is also required to adhere to the provisions of Notification FEMA No. 120/RB-2004 dated July 7, 2004, as amended from time to time. (iii) Preference shares: Preferences Shares (i.e. non-convertible, optionally convertible or partially convertible) for issue of which, funds have been received on or after May 1, 2007 would be considered as debt and should conform to the ECB policy. Accordingly, all the norms applicable for ECB, viz. eligible borrowers, recognized lenders, amount and maturity, end use stipulations, etc. shall apply. Since these instruments would be denominated in Ru....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it making organizations are not eligible to raise ECB. (b) Units in Special Economic Zones (SEZ) are allowed to raise ECB for their own requirement. However, they cannot transfer or on-lend ECB funds to sister concerns or any unit in the Domestic Tariff Area (DTA). (c) NBFCs-IFCs are permitted to avail of ECBs for on-lending to the infrastructure sector as defined under the ECB policy. (d) NBFCs-AFCs are permitted to avail of ECBs for financing the import of infrastructure equipment for leasing to infrastructure projects. (e) Non-Government Organizations (NGOs) engaged in micro finance activities are eligible to avail of ECB. (f) Micro Finance Institutions (MFIs) engaged in micro finance activities are eligible to avail of ECBs. MFIs registered under the Societies Registration Act, 1860, MFIs registered under Indian Trust Act, 1882, MFIs registered either under the conventional state-level cooperative acts, the national level multi-state cooperative legislation or under the new state-level mutually aided cooperative acts (MACS Act) and not being a co-operative bank, Non-Banking Financial Companies (NBFCs) categorized as 'Non Banking Financial Company-Micro Finance In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch as (a) international banks, (b) international capital markets, (c) multilateral financial institutions (such as IFC, ADB, CDC, etc.) / regional financial institutions and Government owned development financial institutions, (d) export credit agencies, (e) suppliers of equipment, (f) foreign collaborators and (g) foreign equity holders [other than erstwhile Overseas Corporate Bodies (OCBs)]. (2) NGOs engaged in micro finance and MFIs registered as societies, trusts and co-operatives can avail of ECBs from (a) international banks, (b) multilateral financial institutions, (c) export credit agencies (d) overseas organisations and (e) individuals. (3) NBFC-MFIs will be permitted to avail of ECBs from multilateral institutions, such as IFC, ADB etc./ regional financial institutions/international banks / foreign equity holders and overseas organizations. (4) Companies registered under Section 25 of the Companies Act,1956 and are engaged in micro finance will be permitted to avail of ECBs from international banks, multilateral financial institutions, export credit agencies, foreign equity holders, overseas organizations and individuals. (5) A "foreign equity holder" to be e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ence /documents such as audited statement of account and income tax return, which the overseas lender may furnish, need to be certified and forwarded by the overseas bank. Individual lenders from countries wherein banks are not required to adhere to Know Your Customer (KYC) guidelines are not eligible to extend ECB. iii) Amount and Maturity a. The maximum amount of ECB which can be raised by a corporate other than those in the hotel, hospital and software sectors, and corporate in miscellaneous services sector is USD 750 million or its equivalent during a financial year. b. Corporates in the services sector viz. hotels, hospitals and software sector and miscellaneous services sector are allowed to avail of ECB up to USD 200 million or its equivalent in a financial year for meeting foreign currency and/ or Rupee capital expenditure for permissible end-uses. The proceeds of the ECBs should not be used for acquisition of land. c. NGOs engaged in micro finance activities and Micro Finance Institutions (MFIs) can raise ECB up to USD 10 million or its equivalent during a financial year. Designated AD bank has to ensure that at the time of drawdown the forex exposure of the bo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dernization/expansion of existing production units in real sector - industrial sector including small and medium enterprises (SME), infrastructure sector and specified service sectors, viz. hotel, hospital and software and miscellaneous services sector as given at I(A)(i)(j) above. Infrastructure sector is defined as (a) Energy which will include (i) electricity generation, (ii) electricity transmission, (iii) electricity distribution, (iv) oil pipelines, (v) oil/gas/liquefied natural gas (LNG) storage facility (includes strategic storage of crude oil) and (vi) gas pipelines (includes city gas distribution network); (b) Communication which will include (i) mobile telephony services / companies providing cellular services, (ii) fixed network telecommunication (includes optic fibre / cable networks which provide broadband / internet) and (iii) telecommunication towers;(c) Transport which will include (i) railways (railway track, tunnel, viaduct, bridges and includes supporting terminal infrastructure such as loading / unloading terminals, stations and buildings), (ii) roads and bridges, (iii) ports, (iv) inland waterways, (v) airport and (vi) urban public transport (except rolling st....
X X X X Extracts X X X X
X X X X Extracts X X X X
....systems for roads and highways for capital expenditure provided they form part of the original project i. SIDBI can on lend to the borrowers in the MSME sector for permissible end uses, having natural hedge by way of foreign exchange earnings. SIDBI may on-lend either in INR or in foreign currency (FCY). In case of on-lending in INR, the foreign currency risk shall be fully hedged by SIDBI. j. Refinancing of Bridge Finance (including buyers' / suppliers' credit) availed of for import of capital goods by companies in Infrastructure Sector k. ECB is allowed for Import of services, technical know-how and payment of license fees. The companies in the manufacturing and infrastructure sectors may import services, technical know-how and payment of license fees as part of import of capital goods subject to certain conditions. l. ECB for general corporate purposes from direct foreign equity holders by companies in manufacturing, infrastructure, hotels, hospitals and software sector: Eligible borrowers can avail ECB from their direct foreign equity holder company with a minimum average maturity of 7 years for general corporate purposes (which includes working capital) subject to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s (NBFCs) from India relating to ECB is not permitted. ix) Security The choice of security to be provided to the overseas lender / supplier for securing ECB is left to the borrower. AD Category-I banks may allow creation of charge on immovable assets, movable assets, financial securities and issue of corporate and / or personal guarantees in favour of overseas lender / security trustee, to secure the ECB to be raised / raised by the borrower, subject to satisfying themselves that: (i) the underlying ECB is in compliance with the extant ECB guidelines, (ii) there exists a security clause in the Loan Agreement requiring the ECB borrower to create charge, in favour of overseas lender / security trustee, on immovable assets / movable assets / financial securities / issuance of corporate and / or personal guarantee, and (iii) No objection certificate, wherever necessary, from the existing lenders in India has been obtained. Once aforesaid stipulations are met, the AD Category-I bank may permit creation of charge on immovable assets, movable assets, financial securities and issue of corporate and / or personal guarantees, during the currency of the ECB with security co-termin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to execute such guarantees on behalf of the company or in individual capacity should be obtained. ii. Specific requests from individuals to issue personal guarantee indicating details of the ECB should be obtained. iii. Such security shall be subject to provisions contained in the Foreign Exchange Management (Guarantees) Regulations, 2000. x) Parking of ECB proceeds Borrowers are permitted to either keep ECB proceeds abroad or to remit these funds to India, pending utilization for permissible end-uses. a) ECB proceeds parked overseas: These funds can be invested in the following liquid assets (a) deposits or Certificate of Deposit or other products offered by banks rated not less than AA(-) by Standard and Poor/ Fitch IBCA or Aa3 by Moody's; (b) Treasury bills and other monetary instruments of one year maturity having minimum rating as indicated above and (c) deposits with overseas branches / subsidiaries of Indian banks abroad. The funds should be invested in such a way that the investments can be liquidated as and when funds are required by the borrower in India. b) ECB proceeds raised abroad meant for Rupee expenditure in India: Funds meant for local sourcing o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appeals, without prejudice to the outcome of such investigations / adjudications / appeals. Accordingly, in case of all applications where the borrowing entity has indicated about the pending investigations / adjudications / appeals, Authorised Dealers while approving the proposal shall intimate the concerned agencies by endorsing the copy of the approval letter. xv) Procedure Borrowers may enter into loan agreement complying with the ECB guidelines with recognised lender for raising ECB under the Automatic Route without the prior approval of the Reserve Bank. The borrower must obtain a Loan Registration Number (LRN) from the Reserve Bank of India before drawing down the ECB. The procedure for obtaining LRN is detailed in para X (i) (b). I. (B) APPROVAL ROUTE i) Eligible Borrowers The following types of proposals for ECB are covered under the Approval Route: a. On lending by the EXIM Bank for specific purposes will be considered on a case by case basis. b. Banks and financial institutions which had participated in the textile or steel sector restructuring package as approved by the Government are also permitted to the extent of their investment in the package a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iz. hotels, hospitals and software sectors and in miscellaneous services (as given at I(A)(i)(j) above) can avail of ECB beyond USD 200 million or equivalent per financial year. ECB for corporates in miscellaneous services is permitted only from direct / indirect equity holders and group companies. m. Small Industries Development Bank of India (SIDBI) is eligible to avail of ECB for on-lending to MSME sector, as defined under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, beyond 50 per cent of their owned funds, subject to a ceiling of USD 500 million per financial year provided such on-lending by SIDBI shall be to the borrowers' for permissible end-use and having natural hedge by way of foreign exchange earnings. SIDBI may on-lend either in INR or in foreign currency (FCY). In case of on-lending in INR, the foreign currency risk shall be fully hedged by SIDBI. n. Low Cost Affordable Housing Projects: Developers/builders / Housing Finance Companies (HFCs) / National Housing Bank (NHB) may avail of ECB for low cost affordable housing projects [refer to para I B (vii) ibid]. o. Corporates under Investigation: All entities against which investigations ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CB up to USD 5 million - minimum paid-up equity of 25 per cent held directly by the lender (all outstanding ECBs including the proposed one); (ii) For ECB more than USD 5 million - minimum paid-up equity of 25 per cent held directly by the lender and ECB liability-equity ratio not exceeding 7:1 (all outstanding ECBs including the proposed one); (c) ECB from indirect equity holders provided the indirect equity holding by the lender in the Indian company is at least 51 per cent; (d) ECB from a group company provided both the borrower and the foreign lender are subsidiaries of the same parent. Besides the paid-up capital, free reserves (including the share premium received in foreign currency) as per the latest audited balance sheet shall be reckoned for the purpose of calculating the 'equity' of the foreign equity holder in the term ECB liability-equity ratio. Where there are more than one foreign equity holder in the borrowing company, the portion of the share premium in foreign currency brought in by the lender(s) concerned shall only be considered for calculating the ECB liability-equity ratio for reckoning quantum of permissible ECB. For calculating the 'ECB liabil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt in Joint Ventures (JV)/Wholly Owned Subsidiaries (WOS) subject to the existing guidelines on Indian Direct Investment in JV/WOS abroad. c. Interest During Construction (IDC) for Indian companies which are in the infrastructure sector, as defined under the extant ECB guidelines subject to IDC being capitalized and forming part of the project cost. d. The payment by eligible borrowers in the Telecom sector, for spectrum allocation may, initially, be met out of Rupee resources by the successful bidders, to be refinanced with a long-term ECB, under the approval route, subject to the following conditions: i. The ECB should be raised within 12 months from the date of payment of the final instalment to the Government; ii. The designated AD - Category I bank should monitor the end-use of funds; iii. Banks in India will not be permitted to provide any form of guarantees; iv. ECB should not be raised from overseas branches / subsidiaries of Indian banks; and v. All other conditions of ECB, such as eligible borrower, recognized lender, all-in-cost, average maturity, etc. should be complied with. e. The first stage as well as subsequent stages of acquisition of share....
X X X X Extracts X X X X
X X X X Extracts X X X X
....king capital. Such ECBs will be allowed based on the cash flow, foreign exchange earnings and the capability to service the debt and the ECBs can be raised with a minimum average maturity period of three years. The overall ECB ceiling for the entire civil aviation sector would be USD one billion and the maximum permissible ECB that can be availed by an individual airline company will be USD 300 million. This limit can be utilized for working capital as well as refinancing of the outstanding working capital Rupee loan(s) availed of from the domestic banking system. ECB availed for working capital/refinancing of working capital as above will not be allowed to be rolled over. The foreign exchange for repayment of ECB should not be accessed from Indian markets and the liability should be extinguished only out of the foreign exchange earnings of the borrowing company. The scheme will be available upto March 31, 2016. j. ECB for general corporate purposes from direct foreign equity holders: Eligible borrowers can avail ECB under approval route from their direct foreign equity holder company with a minimum average maturity of 7 years for general corporate purposes (which includes wo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve established Joint Venture (JV) / Wholly Owned Subsidiary (WOS) / have acquired assets overseas in compliance with extant regulations under FEMA, 1999 can avail ECB for repayment of all term loans having average residual maturity of 5 years and above / credit facilities availed of by Indian companies from domestic banks for overseas investment in JV/WOS, in addition to 'Capital Expenditure'. The maximum permissible ECB that can be availed of by an individual company will be limited to 75 per cent of the average annual export earnings realized during the past three financial years or 75 per cent of the assessment made about the average foreign exchange earnings potential for the next three financial years of the Indian companies from the JV / WOS / assets abroad as certified by Statutory Auditors / Chartered Accountant / Certified Public Accountant / Category I Merchant Banker registered with SEBI / an Investment Banker outside India registered with the appropriate regulatory authority in the host country. The ECB availed should be repaid out of forex earnings from the overseas JV / WOS / assets. The past earnings in the form of dividend/repatriated profit/ other forex inflows ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....NR 25 lakh subject to the condition that the cost of the individual housing unit shall not exceed INR 30 lakh. The ECB should be swapped into Rupees for the entire maturity on fully hedged basis. HFCs while making the applications, shall submit a certificate from NHB that the availment of ECB is for financing prospective owners of individual units for the low cost affordable housing and ensure that the interest rate spread charged by them to the ultimate buyer is reasonable. (d) NHB is also eligible to raise ECB for financing low cost affordable housing units of individual borrowers. Further, in case, a developer of low cost affordable housing project not being able to raise ECB directly as envisaged above, National Housing Bank is permitted to avail of ECB for on-lending to such developers which satisfy the conditions prescribed to developers / builders subject to the interest rate spread set by RBI. ECB proceeds shall be utilized only for low cost affordable housing projects and shall not be utilized for acquisition of land. (e) Interest rate spread to be charged by NHB may be decided by NHB taking into account cost and other relevant factors. NHB shall ensure that interest....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al institutions relating to ECB in the case of SME will be considered on merit subject to prudential norms. With a view to facilitating capacity expansion and technological upgradation in Indian textile industry, issue of guarantees, standby letters of credit, letters of undertaking and letters of comfort by banks in respect of ECB by textile companies for modernization or expansion of textile units will be considered under the Approval Route subject to prudential norms. xi) Security The choice of security to be provided to the lender / supplier is left to the borrower. However, creation of charge over immovable assets and financial securities, such as shares, in favour of the overseas lender is subject to Regulation 8 of Notification No. FEMA 21/RB-2000 dated May 3, 2000 and Regulation 3 of Notification No. FEMA 20/RB-2000 dated May 3, 2000 as amended from time to time, respectively. Powers have been delegated to Authorised Dealer Category I banks to issue necessary NOCs under FEMA as detailed in paragraph I (A) (ix) ibid. xii) Parking of ECB proceeds Borrowers are permitted to either keep ECB proceeds abroad or to remit these funds to India, pending utilization for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....igible limit under the automatic route. Further, such refinance is not permitted by raising fresh ECB from overseas branches / subsidiaries of Indian banks. xv) Debt Servicing The designated AD bank has general permission to make remittances of installment of principal, interest and other charges in conformity with the ECB guidelines issued by Government / Reserve Bank from time to time. xvi) Procedure Applicants are required to submit an application in form ECB through designated AD bank to the Principal Chief General Manager, Foreign Exchange Department, Reserve Bank of India, Central Office, External Commercial Borrowings Division, Mumbai - 400 001, along with necessary documents. xvii) Empowered Committee Reserve Bank has set up an Empowered Committee to consider proposals coming under the Approval Route. II. Foreign Currency Convertible Bonds (FCCBs): FCCBs are governed by the 'Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depositary Receipt Mechanism) Scheme, 1993' as amended from time to time and Notification FEMA No.120/RB-2004 dated July 7, 2004. The issuance of FCCBs was brought under the ECB guidelines in August 2005. In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eign currency, issued by an Issuing Company and subscribed to by a person who is a resident outside India, in foreign currency and exchangeable into equity share of another company, to be called the Offered Company, in any manner, either wholly, or partly or on the basis of any equity related warrants attached to debt instruments. The FCEB may be denominated in any freely convertible foreign currency. Eligible Issuer: The Issuing Company shall be part of the promoter group of the Offered Company and shall hold the equity share/s being offered at the time of issuance of FCEB. Offered Company: The Offered Company shall be a listed company, which is engaged in a sector eligible to receive Foreign Direct Investment and eligible to issue or avail of Foreign Currency Convertible Bond (FCCB) or External Commercial Borrowings (ECB). Entities not eligible to issue FCEB: An Indian company, which is not eligible to raise funds from the Indian securities market, including a company which has been restrained from accessing the securities market by the SEBI shall not be eligible to issue FCEB. Eligible subscriber: Entities complying with the Foreign Direct Investment policy and adher....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to India for credit to the borrowers' Rupee accounts with AD Category I banks in India pending utilization for permissible end-uses. It shall be the responsibility of the issuing company to ensure that the proceeds of FCEB are used by the promoter group company only for the permitted end-uses prescribed under the ECB policy. The issuing company should also submit audit trail of the end-use of the proceeds by the issuing company / promoter group companies to the Reserve Bank duly certified by the designated AD bank. Operational Procedure: Issuance of FCEB shall require prior approval of the Reserve Bank under the Approval Route. The Reporting arrangement for FCEB shall be as per the extant ECB policy. IV. STRUCTURED OBLIGATIONS Borrowing and lending in Indian Rupees between two residents does not attract any provisions of the Foreign Exchange Management Act, 1999. In cases where a Rupee loan [fund based as well as non-fund based such as Letter of Credit / Guarantee / Letter of Undertaking (LoU) / Letter of Comfort/ Derivative Contracts by residents, that are subsidiaries of multinational companies, executed with an AD Category - I bank in India for hedging foreign currency ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld have a minimum average maturity of three years; iii) prepayment and call / put options are not permissible for such capital market instruments up to an average maturity period of 3 years; iv) guarantee fee and other costs in connection with credit enhancement will be restricted to a maximum 2 per cent of the principal amount involved; v) on invocation of the credit enhancement, if the guarantor meets the liability and if the same is permissible to be repaid in foreign currency to the eligible non-resident entity, the all-in-cost ceilings, as applicable to the relevant maturity period of the Trade Credit / ECBs, as per the extant guidelines, is applicable to the novated loan. vi) In case of default and if the loan is serviced in Indian Rupees, the applicable rate of interest would be the coupon of the bonds or 250 bps over the prevailing secondary market yield of 5 years Government of India Security, as on the date of novation, whichever is higher; vii) IFCs proposing to avail of the credit enhancement facility should comply with the eligibility criteria and prudential norms laid down in the circular DNBS.PD.CC No.168/03.02.089/2009-10 dated February 12, 2010 and i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erever applicable. b. The foreign equity holding after such conversion of debt into equity is within the sectoral cap, if any. c. Pricing of shares is as per the pricing guidelines issued under FEMA, 1999 in the case of listed/ unlisted companies. d. Conversion of ECB and Lumpsum Fee / Royality into Equity: In case the ECB liability, denominated in foreign currency and / or import of capital goods, etc. is sought to be converted by the company, it will be in order to apply the exchange rate prevailing on the date of the agreement between the parties concerned for such conversion. Reserve Bank will have no objection if the borrower company wishes to issue equity shares for a rupee amount less than that arrived at as mentioned above by a mutual agreement with the ECB lender. It may be noted that the fair value of the equity shares to be issued shall be worked out with reference to the date of conversion only. The principle of calculation of INR equivalent for a liability denominated in foreign currency as mentioned above shall apply, mutatis mutandis, to all cases where any payables/liability by an Indian company such as, lump sum fees/royalties, etc. are permitted to be con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....- 2. IX. COMPLIANCE WITH ECB GUIDELINES The primary responsibility to ensure that ECB raised/utilised are in conformity with the ECB guidelines and the Reserve Bank regulations / directions is that of the borrower concerned and any contravention of the ECB guidelines will be viewed seriously and will invite penal action under FEMA 1999. The designated AD bank is also required to ensure that raising / utilisation of ECB is in compliance with ECB guidelines at the time of certification. X. REPORTING ARANGEMENTS AND DISSEMINATION OF INFORMATION i) Reporting Arrangements a. With a view to simplifying the procedure, submission of copy of loan agreement is dispensed with. b. For allotment of Loan Registration Number (LRN), borrowers are required to submit Form 83, in duplicate, certified by the Company Secretary (CS) or Chartered Accountant (CA) to the designated AD bank. One copy is to be forwarded by the designated AD bank to the Director, Balance of Payments Statistics Division, Department of Statistics and Information Management (DSIM), Reserve Bank of India, Bandra-Kurla Complex, Mumbai - 400 051(Note: copies of loan agreement and offer documents for FCCB are not r....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... allow the cases requiring transfer of the ECB from one company to another on account of re-organisation at the borrower's level in the form of merger / demerger / amalgamation / acquisition duly as per the applicable laws / rules after satisfying themselves that the company acquiring the ECB is an eligible borrower. (f) Change in the recognized lender Designated AD Category-I banks may approve the request from the ECB borrowers with respect to change in the recognized lender subject to ensuring that the original lender as well as the new lender is recognised lender as per extant ECB guidelines, there is no change in the other terms and conditions of the ECB. (g) Change in the name of Lender AD Category-I banks may permit changes in the name of the lender of ECB after satisfying themselves with the bonafides of the transactions and ensuring that the ECB continues to be in compliance with applicable guidelines. (h) Cancellation of LRN The designated AD Category-I bank may directly approach DSIM for cancellation of LRN for ECBs availed, subject to ensuring that no draw down for the said LRN has taken place and the monthly ECB-2 returns till date in respect of the LR....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot allowed to issue any direct or indirect guarantee or create any contingent liability or offer any security in any form for such borrowings by their overseas holding / associate / subsidiary / group companies except for the purposes explicitly permitted in the relevant Regulations. ii. Further, funds raised abroad by overseas holding / associate / subsidiary / group companies of Indian companies with support of the Indian companies or their AD Category - I banks as mentioned at (i) cannot be used in India unless it conforms to the general or specific permission granted under the relevant Regulations. iii. Indian companies or their AD Category - I banks using or establishing structures which contravene the above shall render themselves liable for penal action as prescribed under FEMA, 1999. PART-II TRADE CREDITS FOR IMPORTS INTO INDIA Trade Credits (TC) refer to credits extended for imports, permissible under the extant Foreign Trade Policy, directly by the overseas supplier, bank and financial institution for maturity up to five years. Depending on the source of finance, such trade credits include suppliers' credit or buyers' credit. Suppliers' credit relates to cr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the extended period beyond three years. d) Reporting Arrangements AD banks are required to furnish details of approvals, drawal, utilisation, and repayment of trade credit granted by all its branches, in a consolidated statement, during the month, in form TC (format in Annex IV) from April 2004 onwards to the Director, Division of International Trade and Finance, Department of Economic Policy and Research, Reserve Bank of India, Central Office Building, 8th floor, Fort, Mumbai - 400 001 (and in MS-Excel file through email) so as to reach not later than 10th of the following month. Each trade credit may be given a unique identification number by the AD bank. AD banks are required to furnish data on issuance of LCs / Guarantees / LoU / LoC by all its branches, in a consolidated statement, at quarterly intervals (format in Annex V) to the Principal Chief General Manager, Foreign Exchange Department, ECB Division, Reserve Bank of India, Central Office Building, 11th floor, Fort, Mumbai - 400 001 (and in MS-Excel file through email) from December 2004 onwards so as to reach the Department not later than 10th of the following month. Appendix List of Notifications/ A.P. (DI....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 23 A.P.(DIR Series) Circular No.16 September 22, 2008 24 A.P.(DIR Series) Circular No.17 September 23, 2008 25 A.P.(DIR Series) Circular No.20 October 8, 2008 26 A.P.(DIR Series) Circular No.26 October 22, 2008 27 A.P.(DIR Series) Circular No.27 October 27, 2008 28 A.P.(DIR Series) Circular No.39 December 8, 2008 29 A.P.(DIR Series) Circular No.46 January 2, 2009 30 A.P.(DIR Series) Circular No.58 March 13, 2009 31 A.P.(DIR Series) Circular No.64 April 28, 2009 32 A.P.(DIR Series) Circular No.65 April 28, 2009 33 A.P.(DIR Series) Circular No.71 June 30, 2009 34 A.P.(DIR Series) Circular No.19 December 9, 2009 35 A.P.(DIR Series) Circular No.28 January 25, 2010 36 A.P.(DIR Series) Circular No.33 February 9, 2010 37 A.P.(DIR Series) Circular No.38 March 2, 2010 38 A.P.(DIR Series) Circular No.39 March 2, 2010 39 A.P.(DIR Series) Circular No.40 March 2, 2010 40 A.P.(DIR Series) Circular No.44 March 29, 2010 41 A.P.(DIR Series) Circular No.51 May 12, 2010 42 A.P.(DIR Series) Circular No.04 July 22, 2010 43....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies) Circular No.63 December 20, 2012 83 A.P.(DIR Series) Circular No.69 January 7, 2013 84 A.P.(DIR Series) Circular No.78 January 21, 2013 85 A.P.(DIR Series) Circular No.87 March 5, 2013 86 A.P.(DIR Series) Circular No.98 April 9, 2013 87 A.P.(DIR Series) Circular No.113 June 24, 2013 88 A.P.(DIR Series) Circular No.114 June 25, 2013 89 A.P.(DIR Series) Circular No.115 June 25, 2013 90 A.P.(DIR Series) Circular No.116 June 25, 2013 91 A.P.(DIR Series) Circular No.117 June 25, 2013 92 A.P.(DIR Series) Circular No.119 June 26, 2013 93 A.P.(DIR Series) Circular No.120 June 26, 2013 94 A.P.(DIR Series) Circular No.6 July 8, 2013 95 A.P.(DIR Series) Circular No.9 July 11, 2013 96 A.P.(DIR Series) Circular No.10 July 11, 2013 97 A.P.(DIR Series) Circular No.11 July 11, 2013 98 A.P.(DIR Series) Circular No.12 July 15, 2013 99 A.P.(DIR Series) Circular No.31 September 04, 2013 100 A.P.(DIR Series) Circular No.48 September 18, 2013 101 A.P.(DIR Series) Circular No. 53 September 24, 2013 102 A.P.(DIR Series) Cir....