RBI/2013-14/323
A.P. (DIR Series) Circular No. 61
October 10, 2013
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Overseas Foreign Currency Borrowings by Authorised Dealer Banks
Attention of Authorised Dealer Category I banks is invited to Regulation no.
(4)(2)(i) of
Notification No. FEMA 3/RB-2000 dated May 3, 2000 as amended from
time to time and
A.P.(DIR Series) circular no. 23 dated October 15, 2008 in
terms of which, inter alia, AD Category - I banks may borrow funds from their
Head Office, overseas branches and correspondents and avail overdraft in the nostro accounts up to a limit of hundred per cent of their unimpaired Tier I
capital as at the close of the previous quarter or USD 10 million (or its
equivalent), whichever is higher (excluding borrowings for financing of export
credit in foreign currency and capital instruments).
- With a view to providing greater flexibility to AD Category - I banks in
seeking access to overseas funds, Reserve Bank has amended Regulation no.
(4)(2)(i) vide
Notification No.FEMA.288/2013-RB dated September 26, 2013
published in the Official Gazette vide G.S.R.No.668 (E) on October 1, 2013.
Henceforth, authorised dealers may borrow from their Head Office or overseas
branches or correspondents outside India or any other entity as permitted by
Reserve Bank up to hundred per cent of its unimpaired Tier I capital or USD 10
million, whichever is higher, subject to such conditions as the Reserve Bank may
direct. A copy of the amendment notification is placed as annex to this
circular.
- Accordingly, permission is hereby granted to AD Category I banks to borrow
from international / multilateral financial institutions for a limited period up
to November 30, 2013. Such borrowings should be for the purpose of general
banking business and not for capital augmentation and shall be subject to the
conditions stipulated in the
A.P. (DIR Series) circulars no. 40, 2013 dated
September 10, 2013. Further, such borrowings shall be eligible for the
concessional swap facility of RBI as per
A.P. (DIR Series) circulars no. 40,
2013 dated September 10, 2013 and
54 dated September 25, 2013.
- 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 is
without prejudice to permissions/approvals, if any, required under any other
law.
Yours faithfully
(Rudra Narayan Kar)
Chief General Manager-in-Charge