Date: |
23-01-2015
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Notification No: |
RBI/2014-15/425 A.P. (DIR Series) Circular No.64
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Issuing Authority: |
RBI
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Type: |
A.P.D.(Series) Circulars
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File No: |
RBI/2014-15/425 |
Subject: |
External Commercial Borrowings (ECB) Policy – Simplification of Procedure
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RBI/2014-15/425
A.P. (DIR Series) Circular No.64
January 23, 2015
To
The Authorised Dealer Category-I Banks
Madam / Dear Sir
External Commercial Borrowings (ECB) Policy – Simplification of
Procedure
Attention of the Authorised Dealer (AD) Category-I banks is invited to the
following provisions contained in the undernoted A.P. (DIR Series) Circulars
through which powers have been delegated to them to deal with cases related to
change in draw-down and repayment schedules of ECBs subject to conditions
stipulated therein:
- Provisions contained in the paragraph 3 (a) of
A.P. (DIR Series) Circular No. 33
dated February 09, 2010
- Provisions contained in paragraphs 3 (a) and (b) of
A.P. (DIR Series) Circular
No. 75 dated February 07, 2012
- Provisions contained in the
A.P. (DIR Series) Circular No. 128 dated May 09,
2014.
2. On a review, as a measure of simplification of the existing procedure for
rescheduling / restructuring of ECBs and in supersession of aforesaid
provisions, it has been decided to delegate powers to the designated AD
Category-I banks to allow:
- Changes / modifications (irrespective of the number of occasions) in the
draw-down and repayment schedules of the ECB whether associated with change in
the average maturity period or not and / or with changes (increase/decrease) in
the all-in-cost.
- Reduction in the amount of ECB (irrespective of the number of occasions) along
with any changes in draw-down and repayment schedules, average maturity period
and all-in-cost.
- Increase in all-in-cost of ECB, irrespective of the number of occasions.
3. This measure is subject to the designated AD Category-I bank ensuring the
following:
Revised average maturity period and / or all-in-cost is / are in conformity with
the applicable ceilings / guidelines; and
The changes are effected during the tenure of the ECB.
4. If the lender is an overseas branch / subsidiary of an Indian bank, the
changes shall be subject to the applicable prudential norms.
5. It has also been decided to delegate powers to the designated AD Category-I
banks to 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. Further, the AD
Category-I banks may also 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 and ECB continues to be in compliance with
applicable guidelines.
6. These measures of simplification will be applicable for ECBs raised both
under the automatic and approval routes. FCCBs will, however, not be covered
within these provisions.
7. These changes in the terms and conditions of ECB and / or any other changes
allowed by the AD Category-I banks under the powers already delegated and / or
changes approved by the Reserve Bank should be reported to the Department of
Statistics and Information Management (DSIM) of the Reserve Bank through revised
Form 83 at the earliest, in any case not later than 7 days from the changes
effected. While submitting revised Form 83 to the DSIM, the changes should be
specifically mentioned in the communication. Further, these changes should also
get reflected in the ECB 2 returns appropriately.
8. The modification to the ECB policy will come into force with immediate
effect. All other aspects of the ECB policy shall remain unchanged.
9. AD Category-I banks may bring the contents of this Circular to the notice of
their constituents and customers.
10. 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 required, if any, under any
other law.
Yours faithfully
B P Kanungo
Principal Chief General Manager
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