Regulation 6 - Borrowing in Indian Rupees by a Person Resident in India - Foreign Exchange Management (Borrowing and Lending) Regulations, 2018

6. Borrowing in Indian Rupees by a Person Resident in India: - A. Borrowing by an Authorised Dealer An AD may raise Rupee denominated ECB from outside India in accordance with the provisions contained in Schedule I . B. Borrowing by persons other than Authorised Dealer i. Eligible resident entities may raise Rupee denominated ECB from outside India in accordance with the provisions contained in Schedule I . ii. Eligible resident entities, as defined by the Government of India, may borrow from overseas Multilateral Financial Institutions/International Development Financial Institutions, where the source of funds of such institutions is Rupee denominated bonds issued overseas or resources raised domestically, or any other source as approved by the Government of India. iii. Trade Credit may be raised from outside India in Indian Rupees by importers for import of capital or noncapital goods as permissible under the extant Foreign Trade Policy of the DGFT in accordance with the provisions contained in Schedule II . iv. Any foreign investment in the nature of debt arising out of transfer or issue of security, not covered under the above sub-regulations, should be in compliance with Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 , notified vide Notification No. FEMA 20(R)/ 2017-RB dated November 07, 2017, as amended from time to time. v. Any person resident in India accepting any deposit from, or making any deposit with, a person resident outside India, including loans/ overdrafts against security of funds held in such accounts, should be in compliance with Foreign Exchange Management (Deposit) Regulations, 2016 , notified vide Notification No. FEMA 5(R)/2016-RB dated April 1, 2016 , as amended from time to time. vi. A person resident in India, not being a company incorporated in India, may borrow in Indian Rupees from a NRI/Relatives who are OCI Cardholders outside India, subject to such terms and conditions as specified by the Reserve Bank from time to time in consultation with the Government of India. The borrower should ensure that the borrowed funds are not used for restricted end uses. vii. Financial Institutions, set up under an Act of the Indian Parliament, may raise Rupee denominated borrowings from outside India with the prior approval of the Government of India for the purpose of onward lending. Explanation: Such borrowings which are in the nature of ECBs shall be subject to provisions contained in Schedule I .