Reserve Bank Of India
A.P. (DIR Series) Circular No. 87
March 5, 2013
To
All Category - I Authorised Dealer Banks
Madam / Sir,
External Commercial Borrowings (ECB) Policy –
Corporates under Investigation
Attention of Authorized Dealer Category - I (AD Category - I) banks is invited
to the A.P. (DIR Series) Circular No. 71 dated June 30, 2009 and Third Amendment
to
FEMA Notification No.3 (FEMA 197/2009-RB) dated September 22, 2009.
- As per the extant guidelines, corporates that are under investigation by any
law enforcing agencies like the Directorate of Enforcement (DoE), etc. are not
allowed to access ECB under the Automatic route. Any request by such corporates
for ECB is examined by the Reserve Bank under the approval route.
- On a review, it has been decided to permit all entities to avail of ECBs
under the automatic route as per the current norms, notwithstanding the pending
investigations / adjudications / appeals by the law enforcing agencies, 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, Authorised
Dealers while approving the proposal shall intimate the concerned agencies by
endorsing the copy of the approval letter. The same procedure will be followed
by the Reserve Bank of India also while approving such proposals.
- The modifications to the ECB guidelines will come into force with immediate
effect. All other aspects of the ECB policy, under the Automatic route such as
amount of ECB, eligible borrower, recognised lender, end-use, all-in-cost
ceiling, average maturity period, prepayment, refinancing of existing ECB and
reporting arrangements remain unchanged.
- Necessary amendments to the Foreign Exchange Management (Borrowing or Lending
in Foreign Exchange) Regulations, 2000 dated May 3, 2000 have been issued vide
Notification No.FEMA.256/2013-RB dated February 06, 2013, notified vide
G.S.R.No.125(E) dated February 26, 2013.
- AD Category - I banks may bring the contents of this circular to the notice
of their constituents and customers concerned.
- The Directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999)
and are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully
(Rudra Narayan Kar)
Chief General Manager-in-Charge
RBI/2012-13/429