borrowing by overseas branch of an Indian Co. - whether allowed, FEMA

[Sanjeev Sharma]

Please guide me on whether an overseas branch of an indian company borrow funds from either overseas branch of an indian bank or from a foreign bank outside India or from any other person abroad ?? Any approvals required >??

Posts / Replies

[Surender Gupta]

See rule 3 and other provisions of FOREIGN EXCHANGE MANAGEMENT (BORROWING OR LENDING IN FOREIGN EXCHANGE ) REGULATIONS, 2000

[Anuj Gupta]

No,the overseas branch of an indian company cannot borrow funds from a foreign bank outside India or from any other person abroad . Yes ,it is entitled to borrow from overseas branch of an indian bank . Also note that "A branch outside India may borrow, whether by way of loan or overdraft or any other credit facility, from a bank situated outside India, for execution outside India of a turnkey project or civil construction contract or in connection with exports on deferred payment terms, provided the terms and conditions stipulated by the authority which has granted the approval to the project or contract or export in accordance with the Foreign Exchange Management (Export of goods and services) Regulations, 2000