RBI/2011-12/205
A.P. (DIR Series) Circular No. 30
September 27, 2011
To
All Authorised Dealer Category I Banks
Madam / Sir,
External Commercial Borrowings (ECB) in Renminbi (RMB)
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to
the Foreign Exchange Management (Borrowing or lending in foreign exchange)
Regulations, 2000, notified vide
Notification No. FEMA 3/2000-RB dated May 3,
2000, amended from time to time, the Foreign Exchange Management (Manner of
Receipt and Payment) Regulations, 2000 notified vide
Notification No.
FEMA.14/2000-RB dated May 3, 2000, amended from time to time and the
A.P. (DIR
Series) Circular No. 5 dated August 1, 2005, amended from time to time relating
to the External Commercial Borrowings (ECB).
- Considering the specific needs of the infrastructure sector, the existing ECB
policy has been reviewed in consultation with the Government of India and it has
been decided to allow Indian companies which are in the infrastructure sector,
where “infrastructure” is as defined under the extant guidelines on External
Commercial Borrowings (ECB), to avail of ECBs in Renminbi (RMB), under the
approval route, subject to an annual cap of USD one billion pending further
review.
- Once approved, the approval of the Reserve Bank will be valid for a period of
three months from the date of issue of the approval letter and the loan
agreement should be executed within the validity period. The company may
thereafter submit the completed Form 83 to the Department of Statistics and
Information Management (DSIM), Reserve Bank of India for allotment of loan
registration number (LRN) within seven days (from the date of signing the loan
agreement between the borrower and the lender). In case the borrower fails to
obtain LRN within the above period, the approval of the Reserve Bank will stand
cancelled.
- AD Category- I bank will be permitted to open Nostro accounts in Renminbi
(RMB). The designated AD - Category I bank shall monitor the end-use of funds
and bank(s) in India will not be permitted to provide any form of guarantee(s).
All other conditions of ECB, such as eligible borrower, recognized lender,
all-in-cost, average maturity, prepayment, refinancing of existing ECB and
reporting arrangements shall remain unchanged and shall be complied with.
- The amended ECB policy will come into force with immediate effect and is
subject to review.
- Necessary amendments to the Foreign Exchange Management (Manner of Receipt
and Payment) Regulations, 2000 are being issued separately, wherever necessary.
- AD Category - I banks may bring the contents of this circular to the notice
of their constituents and customers.
- The directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully,
(Rashmi Fauzdar)
Chief General Manager