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Issue of Foreign Currency Convertible Bonds (FCCBs)
A.P. (DIR Series)
Circular No. 29 dated 11th March 2002
Attention of
authorised dealers is invited to sub-regulation (2) of Regulation 18 of the
Reserve Bank Notification No.FEMA19/RB-2000 dated 3rd May 2000, in
terms of which an Indian company or a body corporate, created by an Act of
Parliament may issue FCCBs to a person resident outside India, on obtaining an
approval from the Government.
2. With a view to liberalise the capital
account transactions, it has been decided to put the issue of FCCBs up to USD 50
million under the Automatic Route. A copy of the Notification No. FEMA 55/
RB-2002 dated March 7, 2002 amending the Notification No. FEMA 19/ RB-2000 dated
3rd May 2000, is enclosed. Accordingly, an Indian company or a body
corporate, created by an Act of Parliament may issue FCCBs not exceeding US $ 50
million in any one financial year to a person resident outside India under the
automatic route, without the approval from Government or the Reserve Bank.
3. In terms of paragraph (x) of Schedule
II of the notification the issue of FCCB is required to be reported to the
Reserve Bank through the designated branch of an authorised dealer. Authorised
dealers may forward the same to the concerned Regional Office of the Reserve
Bank for obtaining a loan registration number. While forwarding the offer
documents to Reserve Bank the authorised dealers shall ensure that the FCCBs are
issued strictly in accordance with the notification.
4. Authorised dealers may bring the
content of this circular to the notice of their concerned constituents.
5. The directions contained in this
circular have been issued under Section 10(4) and Section 11(I) of Foreign
Exchange Management Act 1999 (42 of 1999).
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