9911796707
TMI BlogMaster Circular on External Commercial Borrowings and Trade Credits (Updated up to June 11, 2015)X X X X Extracts X X X X X X X X Extracts X X X X ..... on, 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) Guarantee xi) Security xii) Parking of ECB proceeds xiii) Prepayment xiv) Refinancing/rescheduling of an existing ECB xv) Debt Servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inary 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 Rupees, the rupee interest rate will be based on the swap equivalent of LIBOR plus the spread as permissible for ECBs of corresponding maturity. (iv) Foreign Currency Exchangeable Bonds (FCEBs): FCEBs means a bond expressed in foreign currency, the principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Institutions' (NBFC-MFIs) and complying with the norms prescribed as per Circular DNBS.CC.PD.No. 250/03.10.01/2011-12 dated December 02, 2011 and Companies registered under Section 25 of the Companies Act, 1956 which are involved in micro finance activities are eligible to raise ECB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eign 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 eligible as "recognized lender" under the automatic route would require minimum holding of paid-up equity in the borrower company as set out below: i. For ECB up to USD 5 million - minimum paid-up equity of 25 per cent held directly by the lender (all outstanding ECBs including the propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtend 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 borrower is fully hedged. d. NBFC-IFCs can avail of ECB up to 75 per cent of their owned funds (ECB including all outstanding ECBs) and must hedge 75 per cent of their currency risk exposure. e. NBFC-AFCs can avail of ECBs up to 75 per cent of their owned funds (ECB including all outstanding ECBs) subject to a max ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, (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 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edged 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 the following conditions: i. Minimum paid-up equity of 25 per cent should be held directly by the lender; ii. Such ECBs would not be used for any purpose not permitted under extant the ECB guidelines (including on-lending to their group companies / step-down subsidiaries in India); and Repayment of the principal shall commence only after completion of minimum average maturity of 7 y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-terminating with underlying ECB, subject to the following: (a) Creation of Charge on immovable assets: * Such security shall be subject to provisions contained in the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000. * The permission should not be construed as a permission to acquire immovable asset (property) in India, by the overseas lender / security trustee. * ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of capital goods, on-lending to Self-Help Groups or for micro credit, payment for spectrum allocation, repayment of rupee loan availed from domestic banks, etc. should be repatriated immediately for credit to their Rupee accounts with AD Category-I banks in India. ECB borrowers are also allowed to park ECB proceeds in term deposits with AD Category- I banks in India for a maximum period of six months pending utilization subject to conditions. The rupee funds, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and assessment by the Reserve Bank based on prudential norms. Any ECB availed for this purpose so far will be deducted from their entitlement. c. ECB with minimum average maturity of 5 years by Non-Banking Financial Companies (NBFCs) from multilateral financial institutions, reputable regional financial institutions, official export credit agencies and international banks to finance import of infrastructure equipment for leasing to infrastructure projects. d. NBFCs-IFCs are permitted to avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 / adjudications / appeals by the law enforcing agencies are pending, may avail of ECBs as per the current norms, if they are otherwise eligible, notwithstanding the pending investigations / adjudications / 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, the Reserve Bank of India while approving the proposal shall intimate the concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided 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 liability', not only the proposed borrowing but also the outstanding ECB from the same foreign equity holder lender shall be reckoned. The total outstanding stock of ECBs (including the proposed ECBs) from a foreign equity lender should not exceed seven times the equity holding, either directly or indirectly of the lender (in case of lending by a group company, equity holdings by the common parent would be reckoned). iii) Amount and Maturity Eligible borrowers under the automatic route other than corporates in the services se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 shares in the disinvestment process to the public under the Government's disinvestment programme of PSU shares. f. Repayment of Rupee loans availed of from domestic banking system: Indian companies which are in the infrastructure sector (except companies in the power sector), as defined under the extant ECB guidelines , are permitted to utilise 25 per cent of the fresh ECB raised by them towards refinancing of the Rupee loan/s availed by them from the domestic banking system, subject to the following conditions: (i) at least 75 per cent of the fresh ECB proposed to be raised should be utilised f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 working capital) subject to the following conditions: i. Minimum paid-up equity of 25 per cent should be held directly by the lender; ii. Such ECBs would not be used for any purpose not permitted under extant the ECB guidelines (including on-lending to their group companies / step-down subsidiaries in India); and iii. Repayment of the principal shall commence only after completion of minimum average maturity of 7 years. No prepayment will be allowed before maturity. vi) Repayment of Rupee loans and/or fresh Rupee capital expenditure for companies with consistent forex earnings - USD 10 billion scheme a) Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 like royalty, technical know-how, fee, etc. from overseas JV/WOS/assets will be reckoned as foreign exchange earnings under this scheme. Under the USD 10 billion scheme, ECB cannot be raised from overseas branches / subsidiaries of Indian banks. vii) ECB for Low Cost Affordable Housing: (a) For the purpose of ECB, a low cost affordable housing project is a project in which at least 60 per cent of the permissible FSI would be for units having maximum carpet area up to 60 square meters. Slum rehabilitation projects will also be eligible under the low cost affordable housing scheme, the eligibility of which would be based on the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 rate spread for HFCs for on-lending to prospective owners' of individual units under the low cost affordable housing scheme is reasonable. (f) Builders / developers meeting the eligibility criteria shall have to apply to the National Housing Bank (NHB) in the prescribed format. NHB shall act as the nodal agency for deciding a project's eligibility as a low cost affordable housing project, and on being satisfied, forward the application to the Reserve Bank for consideration under the approval route. Once NHB decides to forward an application for consideration of RBI, the prospective borrower (builder/developer) will be advised by the NHB to app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour 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 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. ECB proceeds raised abroad meant for Rupee expenditure in India: Funds meant for local ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 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 addition to the requirements of (i) having the maturity of the FCCB not less than 5 years, (ii) the call & put option, if any, shall not be exercisable prior to 5 years, (iii) issuance of FCCBs only without any warrants attached, (iv) the issue related expenses not exceeding 4% of issue size and in case of private placement, shall not exceed 2% of the issue size, etc. as required in terms of Notification FEMA No. 120/RB-2004 dated July 7, 2004. FCCBs are also subject to all the regulations which are applicable to ECBs. Redemption of FCCBs Keeping in view the need to provide a window to facilitate refinancing of FCCBs by the Indian companies which may be facing difficulty in meeting the redemption obligatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue 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 adhering to the sectoral caps at the time of issue of FCEB can subscribe to FCEB. Prior approval of the Foreign Investment Promotion Board, wherever required under the Foreign Direct Investment policy, should be obtained. Entities not eligible to subscribe to FCEB: Entities prohibited to buy, sell or deal in securities by the SEBI will not be eligible to subscribe to FCEB. End-use of FCEB proceeds: Issuing Company: (i) The proceeds of FCEB may be invested by the issuing company overseas by way of direct investment including in Joint Ventures or Wholly Owned Subsidiaries abroad, subject to the existing guidelines on overseas investment in Joint Ventures / Wholly Owned Subsidiaries. (ii) The proceeds of FCEB may be invested by the issuing com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 exposure] is granted against the guarantee provided by a non-resident (non resident group entity in case of derivative contracts), there is no transaction involving foreign exchange until the guarantee is invoked and the non-resident guarantor is required to meet the liability under the guarantee. The non-resident guarantor may discharge the liability by i) payment out of rupee balances held in India or ii) by remitting the funds to India or iii) by debit to his FCNR(B)/NRE account maintained with an AD bank in India. In such cases, the non-resident guarantor may enforce his claim against the resident borrower to recover the amount and on recovery he may seek repatriation of the amount if the liability is discharged either by inward remittance or by debit to FCNR(B)/NRE a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in case the novated loan is designated in foreign currency, the IFC should hedge the entire foreign currency exposure; and viii) The reporting arrangements as applicable to the ECBs would be applicable to the novated loans. V. TAKE-OUT FINANCE Keeping in view the special funding needs of the infrastructure sector, a scheme of take-out finance has been put in place. Accordingly, take-out financing arrangement through ECB, under the approval route, has been permitted for refinancing of Rupee loans availed of from the domestic banks by eligible borrowers in the sea port and airport, roads including bridges and power sectors for the development of new projects, subject to the following conditions: i. The corporate developing the infrastructure project should have a tripartite agreement with d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uity 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 converted to equity shares or other securities to be issued to a non-resident subject to the conditions stipulated under the respective Regulations. (ii) Conversion of ECB may be reported to the Reserve Bank as follows: a. Borrowers are required to report full conversion of outstanding ECB into equity in the form FC-GPR to the Regional Office concerned of the Reserve Bank as well as in form ECB-2 submitted to the DSIM, RBI within seven working days from the close of month to which it relates. The words "ECB wholly converted to equity" should be clearly indicated on top of the ECB-2 form. Once reported, filing of ECB-2 in the subsequent months is not necessary. b. In case of partial conversion of outstanding ECB into equity, borrowers are required to report the converted portion in form FC-GPR to the Regional Office c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 required to be submitted with Form 83). c. The borrower can draw-down the loan only after obtaining the LRN from DSIM, Reserve Bank. d. Borrowers are required to submit ECB-2 Return certified by the designated AD bank on monthly basis so as to reach DSIM, Reserve Bank within seven working days from the close of month to which it relates. [Note: All previous returns relating to ECB viz. ECB 3 - ECB 6 have been discontinued with effect from January 31, 2004]. ii) Dissemination of Information For providing greater transparency, information with regard to the name of the borrower, amount, purpose and maturity of ECB under both Automatic and Approval routes are put on the Reserve Bank's website, on a monthly basis, with a lag of one month to which it relates. XI. RATIONALIZATION OF PROCEDURES - DELEGATION OF POWERS TO AUTHORISED DEA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 LRN have been submitted to DSIM. (i) Change in the end-use of ECB proceeds The designated AD Category-I bank may approve requests from ECB borrowers for change in end-use in respect of ECBs availed under the automatic route, subject to ensuring that the proposed end-use is permissible under the automatic route as per the extant ECB guidelines, there is no change in the other terms and conditions of the ECB, and the monthly ECB-2 returns till date in respect of the LRN have been submitted to DSIM. However, change in the end-use of ECBs availed under the approval route will continue to be referred to the Foreign Exchange Department, Central Office, Reserve Bank of India, as hitherto. (j) Reduction in amount of ECB Designated AD Category - I banks may approve reduction in the amount of ECB (irrespective of the number of occasions) with or without any changes in draw-down and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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 credit for imports into India extended by the overseas supplier, while buyers' credit refers to loans for payment of imports into India arranged by the importer from a bank or financial institution outside India. a) Amount and Maturity (i) AD banks are permitted to approve trade credits for imports into India up to USD 20 million per import transaction for imports permissible under the current Foreign Trade Policy of the DGFT with a maturity period up to one year (from the date of shipment). (ii) For import of capital goods as classified by DGFT, AD banks may approve trade credits up to USD 20 million per import transaction with a maturity period of more than one year and up to five years (from the date of shipment). No roll-over/extension will be permitted beyond the permissible period. The ab-initio contract period should be 6 (six) months for all trade credits. (iii) The period of trade credit should be linked to the operating cycle and trade transaction. AD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serve 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. (DIR Series) Circulars consolidated in the Master Circular on External Commercial Borrowings and Trade Credits Sl. No. Notification / Circular Date Amendment to FEMA 3/2000 - RB dated May 3, 2000 1 FEMA.126/2004-RB December 13, 2004 2 FEMA.127/2005-RB January 5, 2005 3 FEMA 129/2005-RB January 20, 2005 4 FEMA 142/2005-RB December 6, 2005 5 FEMA 157/2007-RB August 30, 2007 6 FEMA.194/2009-RB June 17, 2009 7 FEMA.197/2009-RB September 22, 2009 8 FEMA.232/2012-RB May 30, 2012 9 FEMA.245/2012-RB November 12, 2012 10 FEMA.246/2012-RB November 27, 2012 11 FEMA.250/2012-RB December 06, 2012 12 FEMA.256/2013-RB February 6, 2013 13 FEMA.270/2013-RB March 19, 2013 14 FEMA.281/2013-RB July 19, 2013 15 FEMA.286/2013-RB September 5, 2013 16 FEMA.288/2013-RB September 26, 2013 Amendment to FEMA 8/2000 - RB dated May 3, 2000 1 FEMA.206/2012-RB June 01, 2010 2 FEMA.251/2012-RB December ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es) Circular No.11 September 07, 2011 46 A.P.(DIR Series) Circular No.25 September 23, 2011 47 A.P.(DIR Series) Circular No.26 September 23, 2011 48 A.P.(DIR Series) Circular No.27 September 23, 2011 49 A.P.(DIR Series) Circular No.28 September 26, 2011 50 A.P.(DIR Series) Circular No.29 September 26, 2011 51 A.P.(DIR Series) Circular No.30 September 27, 2011 52 A.P.(DIR Series) Circular No.44 November 15, 2011 53 A.P.(DIR Series) Circular No.51 November 23,2011 54 A.P.(DIR Series) Circular No.52 November 23,2011 55 A.P.(DIR Series) Circular No.59 December 19, 2011 56 A.P.(DIR Series) Circular No.64 January 05, 2012 57 A.P.(DIR Series) Circular No.69 January 25, 2012 58 A.P.(DIR Series) Circular No70 January 25, 2012 59 A.P.(DIR Series) Circular No.75 February 07, 2012 60 A.P.(DIR Series) Circular No.85 February 29, 2012 61 A.P.(DIR Series) Circular No.99 March 30, 2012 62 A.P.(DIR Series) Circular No.100 March 30, 2012 63 A.P.(DIR Series) Circular No.111 April 20, 2012 64 A.P.(DIR Series) Circular No.112 April 20, 2012 65 A.P.(DIR Series) Circular No.113 April 24, 2012 66 A.P.(DIR Series) Circular No.119 May 07, 2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
