Sunday, June 30, 2013
Wednesday, June 26, 2013
External Commercial Borrowings (ECB) Policy – Structured Obligations
External Commercial Borrowings (ECB) Policy – Structured Obligations
Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to A.P. (DIR Series) Circular No. 40 dated March 02, 2010 and A.P. (DIR Series) Circular No. 28 dated September 26, 2011 pertaining to External Commercial Borrowings (ECB) Policy (Structured Obligations).
2. As per the extant guidelines, credit enhancement is permitted to be provided by multilateral / regional financial institutions, Government owned development financial institutions, direct/indirect foreign equity holder(s) under the automatic route for domestic debt raised through issue of capital market instruments, such as, Rupee denominated bonds and debentures, by Indian companies engaged exclusively in the development of infrastructure (as defined under the extant ECB policy) and by Infrastructure Finance Companies (IFCs), which have been classified as such by the Reserve Bank.
3. On a review, it has been decided that credit enhancement can be provided by eligible non-resident entities to the domestic debt raised through issue of INR bonds/ debentures by all borrowers eligible to raise ECB under the automatic route. It has also been decided to reduce the minimum average maturity of the underlying debt instruments from seven years to three years. Prepayment and call/put options, however, would not be permissible for such capital market instruments up to an average maturity period of 3 years. All the other terms and conditions mentioned in para 4 (iv), (vi) to (viii) of A.P. (DIR Series) Circular No. 40 dated March 02, 2010 will remain unchanged.
4. On invocation of such credit enhancement, if the guarantor meets the liability and if the same is permissible to be repaid in foreign currency to the eligible non-resident entity, the all-in-cost ceilings, as applicable to the relevant maturity period of the Trade Credit / ECBs as per extant guidelines, would apply to the novated loan.
5. The amended policy will come into force with immediate effect and is subject to review depending on the experiences gained in this regard.
Ref:A.P. (DIR Series) Circular No.120 dated 26 June 2013
Export of Goods and Services – Time extension for submitting forms for Project Exports
Export of Goods and Services – Time extension for submitting forms for Project Exports
Attention of Authorized Dealers is invited to Para B.7 (i) and C.5 (i) of Memorandum of Instructions on Project and Service Exports (PEM), enclosed to A.P.(DIR Series) Circular No.32 dated October 28, 2003, in terms of which an exporter undertaking Project Exports and Service contracts abroad should submit form DPX1, PEX-1 and TCS-1 to the Approving Authority (AA) i.e. AD Bank/ Exim Bank/ Working Group, within 15 days of entering into contract for grant of post-award approval.
2. On a review, it has been decided to increase the time limit and henceforth the exporter undertaking Project Exports and Service contracts abroad should submit form DPX1, PEX-1 and TCS-1 to the Approving Authority (AA) i. e. AD Bank / Exim Bank / Working Group, within 30 days of entering into contract for grant of post-award approval.
3. All other instructions issued in terms of PEM, notified vide A. P. (DIR Series) Circular No. 32 dated October 28, 2003, shall remain unchanged.
NOW ECB( External Commercial Borrowings) CAN BE AVAILED FOR Import of Services, Technical know-how and License Fees
NOW ECB( External Commercial Borrowings) CAN BE AVAILED FOR Import of Services, Technical know-how and License Fees
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 and the A.P. (DIR Series) Circular No. 5 dated August 1, 2005 relating to the External Commercial Borrowings (ECB), as amended from time to time.
2. As per the extant guidelines, eligible borrowers can raise ECB for investment such as import of capital goods (as classified by DGFT in the Foreign Trade Policy), new projects, modernization / expansion of existing production units in the real sector – industrial sector including small and medium enterprises (SME), infrastructure sector as defined under the ECB policy and entities in service sector viz. hotels, hospitals and software companies.
3. On a review, it has been decided to include import of services, technical know-how and payment of license fees as part of import of capital goods by the companies for the use in the manufacturing and infrastructure sectors as permissible end uses of ECB under the automatic / approval route as the case may be subject to:
(i) there should be a duly signed agreement between the service provider and the borrower company;
(ii) the original invoice raised by the service provider as per the payment schedule in the agreement should be duly certified by the borrower company;
(iii) declaration by the importer that the entire expenditure on import of services will be capitalised;
(iv) declaration by the importer that entire expenditure on import of services forms part of project cost; and
(v) AD category – I bank has to ensure the bonafides of the transaction.
4. The above modifications to the ECB guidelines will come into force with immediate effect. All other aspects of the ECB policy, such as eligible borrower, recognized lender, end-use, all-in-cost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements etc. shall remain unchanged.
Ref: A.P. (DIR Series) Circular No.119 dated 26 June 2013
Tuesday, June 25, 2013
Extension of Time for Availing the External Commercial Borrowings (ECB) Policy for 3G spectrum allocation up to 31st March 2014
Extension of Time for Availing the External Commercial Borrowings (ECB) Policy for 3G spectrum allocation up to 31st March 2014
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 28 dated January 25, 2010 relating to External Commercial Borrowings (ECB) for spectrum allocation.
2. As per the extant policy, the payment for spectrum allocation may initially be met out of the Rupee resources by the successful bidders, to be refinanced with a long term ECB, under the approval route, subject to the condition that ECB should be raised within 12 months from the date of payment of the final installment to the Government.
3. On a review it has been decided that ECB window for financing 3G spectrum rupee loans, that are still outstanding in telecom operator’s books of accounts, will be open upto March 31, 2014.
4. All other aspects of the ECB policy shall remain unchanged. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers.
Ref- A.P. (DIR Series) Circular No. 114 dated 25 June 2013
Extension of time for Buyback / prepayment of Foreign Currency Convertible Bonds (FCCBs) upto 31st December 2013
Extension of time for Buyback / prepayment of Foreign Currency Convertible Bonds (FCCBs) upto 31st December 2013
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 39 dated December 08, 2008, A.P. (DIR Series) Circular No. 75 dated June 30, 2011 and A.P. (DIR Series) Circular No. 1 dated July 05, 2012 on the captioned subject.
2. Considering the developments in the global financial markets and on a review of the aforesaid scheme, it has been decided that the existing scheme of Buyback / Prepayment of FCCBs under the approval route which expired on March 31, 2013 may be continued till December 31, 2013 and shall stand discontinued thereafter.
Ref-A.P. (DIR Series) Circular No. 115 dated 25 June 2013
Extension of time for External Commercial Borrowings (ECB) for Civil Aviation Sector for working capital facilities up to 31 Dec 2013
Extension of time for External Commercial Borrowings (ECB) for Civil Aviation Sector for working capital facilities up to 31 Dec 2013
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to the A.P. (DIR Series) Circular No. 113 dated April 24, 2012 on the captioned subject.
2. In terms of paragraph 2 (iii) of the aforesaid circular, the ECB for working capital for civil aviation sector should be raised within twelve (12) months from the date of issue of the circular. On a review, it has now been decided that the scheme of availing of ECB for working capital for civil aviation sector will continue till December 31, 2013.
DISCONTINUANCE OF External Commercial Borrowings (ECB) in Renminbi (RMB)
DISCONTINUANCE OF External Commercial Borrowings (ECB) in Renminbi (RMB)
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 30 dated September 27, 2011 on the captioned subject in terms of which Indian companies in the infrastructure sector are allowed to avail of ECB in Renminbi (RMB) under approval route subject to an annual cap of USD one billion pending further review.
2. It has been observed that the facility of ECB in Renminbi (RMB) had remained unused so far. Accordingly, the scheme of ECB in Renminbi has been reviewed and it has been decided that this scheme may be discontinued from the date of issue of this circular.
Monday, June 24, 2013
Foreign Direct Investment – Reporting of issue / transfer of Shares to/by a FVCI (Foreign Venture Capital Institutions) and Transfer between NR to Resident and vice-versa.
Foreign Direct Investment –
Reporting of issue / transfer of Shares to/by a FVCI( Foreign Venture Capital Institutions) and Transfer between NR to Resident and vice-versa.
Attention of Authorised Dealers Category-I (AD Category - I) banks is invited to Regulations 9 and 10 and para 9 of Schedule I to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA 20/2000 -RB dated May 3, 2000 (hereinafter referred to as Notification No. FEMA 20), as amended from time to time. Attention of AD Category - I banks is also invited to A. P. (DIR Series) Circular No. 44 dated May 30, 2008 and A.P. (DIR Series) Circular No.63 dated April 22, 2009.2. In terms of the said regulations, transfer of equity shares / fully and mandatorily convertible debentures/ fully and mandatorily convertible preference shares (hereinafter referred to as ‘shares’) of an Indian company, from a person resident outside India (non-resident) to a person resident in India (resident) or vice versa, has to be reported to an Authorized Dealer bank within 60 days of transactions. Further, the receipt of consideration for issue of shares as well as the issue of shares of an Indian company, to a non-resident has to be reported to the Reserve Bank of India through an Authorized Dealer bank within 30 days of the transaction.
3. It has been observed that SEBI registered FVCIs making investments in an Indian Company under FDI Scheme in terms of Schedule 1 of Notification No. FEMA.20 / 2000 - RB dated May 3, 2000, as amended from time to time, also report the same transaction under Schedule 6 of the Notification ibid, resulting in double reporting of the transaction.
4. It is clarified that wherever a SEBI registered FVCI acquires shares of an Indian company under FDI Scheme in terms of Schedule 1 of Notification No. FEMA 20 / 2000-RB dated May 3, 2000, as amended from time to time, such investments have to be reported in form FC-GPR/FC-TRS only, as applicable. Where the investment is under Schedule 6 of the Notification ibid, no FC-GPR/FC-TRS reporting is required. Such transactions would be reported by the custodian bank in the monthly reporting format as prescribed by RBI from time to time. Revised forms FC-GPR and FC-TRS are annexed as ANNEX-I and ANNEX-II, respectively, to this A.P.(DIR Series) Circular.
5. A SEBI registered FVCI while making investment in an Indian company may determine upfront whether the said investment is under FDI or FVCI scheme and report accordingly. For the guidance of FVCI investors, a suitable remark in para 3(4) and 5(a)(4) of form FC-GPR and para 4(4) and para 5(4) of form FC-TRS, has been incorporated, which would read as follows:
‘The investment/s made by SEBI registered FVCI is/are under FDI Scheme, in terms of Schedule 1 to Notification No. FEMA 20 dated May 3, 2000.’
AD Category - I banks may bring the contents of the circular to the notice of their customers/constituents concerned.
Reference - AP DIR Circular A.P. (DIR Series) Circular No.110 dated 12 June 2013
Amendments for External Commercial Borrowings (ECB) for the low cost affordable housing projects- earlier circular.
Amendments for External Commercial Borrowings (ECB) for the low cost affordable housing projects- earlier circular.
Attention of Authorized Dealer Category - I (AD Category - I)
banks is invited to A.P. (DIR Series) Circular No. 61 dated December 17, 2012 on
the captioned subject in terms of which ECB for low cost affordable housing
projects is allowed as a permissible end-use under the approval route.
2. The policy regarding ECB for the low cost affordable housing
projects has been reviewed and it has been decided to modify the guidelines
contained in the aforesaid A.P. (DIR Series) Circular as under:
- Developers/builders should have a minimum of three (3) year’s experience in undertaking residential projects as against five (5) years prescribed earlier and should have good track record in terms of quality and delivery.
-
The condition of minimum paid-up capital of not less than INR 50 crore, as
per the latest audited balance sheet, for Housing Finance Companies (HFCs)
stands withdrawn. However, the condition of the minimum Net Owned Funds (NoF) of
Rs. 300 crore for the past three financial years remains unchanged.
-
The aggregate limit for ECB under the low cost affordable housing scheme is
extended for the financial years 2013-14 and 2014-15 with a ceiling of USD 1
billion in each of the two years, subject to review thereafter.
- The ECB availed of by developers and builders shall be swapped into Rupees for the entire maturity on fully hedged basis.
3. Issue of fixation of spread for on-lending by National Housing bank (NHB):
Interest rate spread to be charged by National Housing Bank (NHB) may be decided by NHB taking into account cost and other relevant factors. NHB shall ensure that interest rate spread for HFCs for on-lending to prospective owners’ of individual units under the low cost affordable housing scheme is reasonable.
4. Housing Finance Companies (HFCs) while making the applications, shall
-
submit a certificate from NHB, the nodal agency, that the availment of ECB is
for financing prospective owners of individual units for the low cost affordable
housing;
-
ensure that cost of such individual units does not exceed Rs. 30 lakh and
loan amount does not exceed Rs. 25 lakh;
-
ensure that the units financed are having maximum carpet area of 60 square
metres; and
- ensure that the interest rate spread charged by the HFCs to the ultimate buyer is reasonable.
5. All other aspects of the scheme mentioned in the aforesaid A.P. (DIR Series) Circular would remain unchanged. Authorised Dealers may bring the contents of this Circular to the notice of their constituents and customers.
6. The directions contained in this circular have been issued under Section 10 (4) and Section 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.
Reference:
|
RBI/2012-13/539 A.P. (DIR Series) Circular No. 113 dated 24 June 2013
|
Friday, June 14, 2013
NOW SEZ IS TO REPATRIATE THEIR EXPORT PROCEEDS WITHIN 12 MONTHS COMPULSORILY
Export of Goods and Services-
Realization and Repatriation period for units in Special Economic Zones (SEZ)
Realization and Repatriation period for units in Special Economic Zones (SEZ)
Attention of Authorized Dealer banks is invited to A. P. (DIR Series) Circular No. 91 dated April 1, 2003. In terms of provisions of Para A of the said circular, time limit for realization and repatriation of export proceeds, for the exports made by units in Special Economic Zones (SEZs), was done away with.
2. It has now been decided that the units located in SEZs shall realize and repatriate, full value of goods/software/services, to India within a period of twelve months from the date of export. Any extension of time beyond the above stipulated period may be granted by Reserve Bank of India, on case to case basis.
Ref:A.P. (DIR Series) Circular No. 108 dated June 11, 2013
Processing and Settlement of Export related receipts facilitated byOnline Payment Gateways – Enhancement of the value of transaction
Processing and Settlement of Export related receipts facilitated by Online Payment Gateways – Enhancement of the value of transaction
Attention of Authorised Dealer Category 1 (AD Category – 1) banks is invited to the A.P. (DIR Series) Circular No.35 dated October 14, 2011 in terms of which AD Category I banks have been permitted to offer the facility to repatriate export related remittances by entering into standing arrangements with Online Payment Gateway Service Providers (OPGSPs) for export of goods and services for value not exceeding USD 3000 per transaction, subject to the conditions stipulated therein.
2. The present instructions have been reviewed in the context of requests received for suitable enhancement of the value of the transaction from USD 3000. Accordingly, it has now been decided to increase the value per transaction from USD 3000 to USD 10,000 for export related remittances received through OPGSPS. The revised limit will come into force with immediate effect.
Ref:A.P. (DIR Series) Circular No. 109 dated June 11 ,2013
FDI, up to 51%, under the government approval route, is permitted in the multi-brand retail trading sector
FDI, up to 51%, under the government approval route, is permitted in the multi-brand retail trading sector
As per paragraph 6.2.16.5 of `Circular 1 of 2013- Consolidated FD1 Policy’, effective from 5.4.2013, FDI, up to 51%, under the government approval route, is permitted in the multi-brand retail trading sector, subject to specified conditions.
Up to 10 state governments in India have given their consent for operating multi-brand retail in their states. Now , Himachal Pradesh government also joined the band and the following is the list of state government that have consented to allow FDI in multi-brand retail sector .
:
| S.No. | Sector/ Activity | % of FDI Cap/ Equity | Entry route |
| 6.2.16.5 | Multi Brand Retail Trading | 51% | Government |
| (1) FDI in… (2) LIST OF STATES/ UNION TERRITORIES AS MENTIONED IN PARAGRAPH 6.2.16.5(1)(viii) 1. Andhra Pradesh 2. Assam 3. Delhi 4. Haryana 5. Himachal Pradesh 6. Jammu & Kashmir 7. Maharashtra 8. Manipur 9. Rajasthan 10. Uttarakhand 11. Daman & Diu and Dadra and Nagar Haveli (Union Territories | |||
Subscribe to:
Posts (Atom)