|
FOREIGN EXCHANGE MANAGEMENT (BORROWING OR LENDING IN FOREIGN EXCHANGE)
REGULATIONS, 2000
Notification
No. 3 dated 3rd May 2000
GSR
386(E), dated 3.5.2000 (As amended by FEMA notification no. 26 dated 14th
August 2000): In exercise of the powers conferred by clause (d) of
sub-section (3) of section 6 and sub-section (2) of section 47 of the Foreign
Exchange Management Act, 1999 (42 of 1999), the Reserve Bank makes the following
regulations for borrowing or lending in foreign exchange by a person resident in
India, namely:
(i)
These Regulations may be called the Foreign Exchange Management
(Borrowing or Lending in Foreign Exchange) Regulations, 2000.
(ii)
They shall come into force on 1st day of June 2000.
In
these regulations, unless the context otherwise requires; -
(a)
�Act� means the Foreign Exchange Management Act, 1999(42 of 1999);
(b)
�authorised dealer� means a person authorised as an authorised dealer
under sub-section (1) of section 10 of the Act;
(c)
�EEFC account�, �RFC account� means the accounts referred to in
the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident
in India) Regulations, 2000;
(d)
�FCNR (B) account�, �NRE account� mean the accounts referred to
in the Foreign Exchange Management (Deposit) Regulations 2000;
(e)
�Indian entity� means a company or a body corporate or a firm in
India;
(f)
�Joint Venture abroad� means a foreign concern formed, registered or
incorporated in a foreign country in accordance with the laws and regulations of
that country and in which investment has been made by an Indian entity;
(g)
�Schedule� means the Schedule to these Regulations;
(h)
�Wholly owned subsidiary abroad� means a foreign concern formed,
registered or incorporated in a foreign country in accordance with the laws and
regulations of that country and whose entire capital is owned by an Indian
entity;
(i)
the words and expressions used but not defined in these Regulations shall
have the same meaning respectively assigned to them in the Act .
Save
as otherwise provided in the Act, Rules or Regulations made thereunder, no
person resident in India shall borrow or lend in foreign exchange from or to a
person resident in or outside India:
Provided
that the Reserve Bank may, for sufficient reasons, permit a person to borrow or
lend in foreign exchange from or to a person resident outside India.
(1)
An authorised dealer in India or his branch outside India may lend in
foreign currency in the circumstances and subject to the conditions mentioned
below, namely:
(i)
A branch outside India of an authorised dealer being a bank incorporated
or constituted in India may extend foreign currency loans in the normal course
of its banking business outside India;
(ii)
An authorised dealer may grant loans to his constituents in India for
meeting their foreign exchange requirements or for their rupee working capital
requirements or capital expenditure subject to compliance with prudential norms,
interest rate directives and guidelines, if any, issued by Reserve Bank in this
regard;
(iii)
An authorised dealer may extend credit facilities to a wholly owned
subsidiary abroad or a joint venture abroad of an Indian entity:
Provided
that not less than 51 percent of equity in such subsidiary or joint venture is
held by the Indian entity subject to compliance with the Foreign Exchange
Management (Transfer and Issue of Foreign Security) Regulations, 2000;
(iv)
An authorised dealer may, in his commercial judgment and in compliance
with the prudential norms, grant loans in foreign exchange to his constituent
maintaining RFC Account, against the security of funds held in such account.
(v)
A branch outside India of an authorised dealer may extend foreign
currency loans against the security of funds held in NRE /FCNR deposit accounts
maintained in accordance with the Foreign Exchange Management (Deposit)
Regulations, 2000.
(vi)
Subject to the directions or guidelines issued by the Reserve Bank from
time to time, an authorised dealer in India may extend foreign currency loans to
another authorised dealer in India
(2)
An authorised dealer in India may borrow in foreign currency in the
circumstances and subject to the conditions mentioned below, namely:
(i)
An authorised dealer may borrow from his Head Office or branch or
correspondent outside India upto fifteen per cent of his unimpaired Tier I
capital or US $ 10 million, whichever is more, subject to such conditions as the
Reserve Bank may direct.
Explanation:
For the purpose of clause (i), the aggregate loans availed of by all branches
in India of the authorised dealer from his Head Office, all branches and
correspondents outside India, shall be reckoned.
(ii)
An authorised dealer may borrow in foreign currency without limit from
his Head Office or branch or correspondent outside India for the purpose of
replenishing his rupee resources, provided that �
(a) the funds
borrowed are utilised for his own business operations and are not invested in
call money or similar other markets;
(b) no
repayment of loan is made without the prior approval of Reserve Bank, which may
be granted only if the authorised dealer had no borrowings outstanding either
from Reserve Bank or other bank or financial institution in India and is clear
of all money market borrowings for a period of at least
four weeks prior to the week in which the repayment is made .
(iii)
A branch outside India of an authorised dealer being a bank incorporated
or constituted in India may borrow in foreign currency in the normal course of
its banking business outside India, subject to the directions or guidelines
issued by the Reserve Bank from time to time, and the Regulatory Authority of
the country where the branch is located.
(iv)
An authorised dealer may borrow in foreign currency from a bank or a
financial institution outside India, for the purpose of granting pre-shipment or
post-shipment credit in foreign currency to his exporter constituent, subject to
compliance with the guidelines issued by the Reserve Bank in this regard.
(1)
An Indian entity may lend in foreign exchange to its wholly owned
subsidiary or joint venture abroad constituted in accordance with the provisions
of Foreign Exchange Management (Transfer or Issue of Foreign Security)
Regulations, 2000.
(2)
A person resident in India may borrow, whether by way of loan or
overdraft or any other credit facility, from a bank situated outside India, for
execution outside India of a turnkey project or civil construction contract or
in connection with exports on deferred payment terms, provided the terms and
conditions stipulated by the authority which has granted the approval to the
project or contract or export in accordance with the Foreign Exchange Management
(Export of Goods and Services) Regulations, 2000.
(3) An importer in India may, for import of goods into
India, avail of foreign currency credit for a period not exceeding six months
extended by the overseas supplies of goods, provided the import is in compliance
with the Export Import Policy of the Government of India in force.
(4)
A person resident in India may lend in foreign currency out of funds held
in his EEFC account, for trade related purposes to his overseas importer
customer:
Provided
that, -
(a)
the aggregate amount of such loans outstanding at any point of time does
not exceed US$ 3 million; and
(b) where
the amount of loan exceed US$ 25,000,a guarantee of a bank of international
repute situated outside India is provided by the overseas borrower in favour of
the lender.
(5)
Foreign currency loans may be extended by Export Import Bank of India,
Industrial Development Bank of India, Industrial Finance Corporation of India,
Industrial Credit and Investment Corporation of India Limited, Small Industries
Development Bank of India Limited or any other institution in India to their
constituents in India out of foreign currency borrowings raised by them with the
approval of the Central Government for the purpose of onward lending.
6.
Other borrowings in foreign exchange with prior approval of Reserve
Bank or Government of India:
(1)
A person resident in India who desires to raise foreign currency loans of
the nature or for the purposes specified in the Schedule who satisfies the
eligibility and other conditions specified in that Schedule, may apply to the
Reserve Bank for approval to raise such loans.
(2)
The Reserve Bank may grant its approval subject to such terms and
conditions, as it may consider necessary:
Provided
that while considering the grant of approval, the Reserve Bank shall take into
account the overall limit stipulated by it, in consultation with the Central
Government, for availment of such loans by the persons resident in India.
(3)
Any other foreign currency loan proposed to be raised by a person
resident in India, which falls outside the scope of the Schedule, shall require
the prior approval of the Central Government.
1.
The borrowing in foreign exchange by a person resident in India may be
under any of the Schemes set out in this Schedule.
2.
The application for the approval of the Reserve Bank under Regulation 6
for borrowing under any of the Schemes shall be made in Form
ECB annexed to these Regulations.
3.
The borrowing in foreign exchange may be from an overseas bank/ export
credit agency / supplier of equipment or foreign collaborator, foreign equity
holder, NRI, OCB, corporate/ institution with a good credit rating from
internationally recognised credit rating agency, or from international capital
market by way of issue of bonds, floating rate notes or any other debit
instrument by whatever name called.
4.
The borrower shall not utilize the funds borrowed under any of these
Schemes for investment in stock market or in real estate business.
(i)
Short �term loans scheme
(a)
Foreign currency credit extended by the overseas supplier of goods to an
importer of goods for financing import of goods in to India, provided the period
of maturity of credit is more than six months but less than three years.
(b)
Foreign currency loan/ credit extended to an importer in India for
financial imports into India, by any bank or financial institution outside
India, provided the period of maturity of loan / credit is less than three
years.
(ii)
Borrowing under US dollar Five Million Scheme
Borrowing in foreign exchange upto US$
Five Million or its equivalent by an Indian entity for general corporate
purposes at a simple minimum maturity of three years.
(iii)
Borrowing under US dollar Ten Million Scheme
Borrowing in foreign exchange not
exceeding US$ Ten Million or its equivalent by an Indian entity for the
following purposes:
(a) Borrowing for Financing of
Infrastructure Projects
(i)
Borrowing in order to finance equity investment in a subsidiary/ joint
venture company promoted by the Indian entity for implementing infrastructure
projects, provided that the minimum average maturity of loan is three years. In
case the loan is to be raised by more than one promoter entity for a single
project, the aggregate of loan by all promoters should not exceed US$ 10
Million.
(ii)
Foreign currency loan raised by an Indian entity for financing
infrastructure project, provided that the minimum average maturity of loan is
not less than three years.
(b) Borrowing
by Exporter/ Foreign Exchange Earner
Borrowing
in foreign exchange by an exporter/ foreign exchange earner upto three times of
the average amount of his annual foreign exchange earnings during the previous
three years subject to a maximum of US$ Ten million or its equivalent, with a
minimum average maturity of three years
(c) Long-term
borrowing
Borrowing for general corporate
purposes at the minimum average maturity of eight years.
(iv)
Scheme for raising loans from NRIs on repatriation basis
Borrowings
not exceeding US$ 2,50,000 or its equivalent in foreign exchange by an
individual resident in India from his close relatives resident outside India,
subject to the conditions that �
(a)
the loan is free of interest;
(b)
the minimum maturity period of the loan is seven years;
(c) the
amount of loan is received by inward remittance in free foreign exchange through
normal banking channels or by debit to the NRE/ FCNR account of the non-resident
lender;
(d) the loan
is utilised for the borrower�s personal purposes or for carrying on his normal
business activity but not for carrying on agriculture/ plantation activities,
purchase of immovable property or shares/ debentures/ bonds issued by companies
in India or for re-lending.
Explanation: �Close
relative� means relatives as defined in section 6 of the Companies Act,
1956.
FORM
ECB
Application
for permission to raise External Commercial Borrowings under Short Term Loan/
Credit US$ 5/ 10 million Scheme
Instructions:
The
application complete in all respects should be submitted in duplicate by the
applicant through the authorised dealer designated by him to handle the matters
relating to the foreign currency borrowings / credit to the Chief General
Manager, Exchange Control Department, Central Office, ECB Division, Reserve Bank
of India, Mumbai-400 001. In respect of short-term loan/ credit for imports, it
should be submitted through the authorised dealer through whom the imports
documents have been received/ will be received.
Documentation:
Following
documents, (as relevant) duly certified by authorised dealer, should be
forwarded with the application.
(i)
A copy of offer from the overseas lender/ supplier furnishing complete
details of the terms and conditions of proposed loan/ credit arrangement.
(ii)
Copies of FIPB/ SIA/ CCEA approvals wherever applicable.
(iii)
In case the application is being made under Exporters�/ Foreign
Exchange Earners� Scheme, bank certificates in respect of export realisation
for past 3 years.
(iv)
If the applicant is NBFC, a copy of credit rating awarded by a recognised
credit rating agency and copy of RBI registration certificate.
(v)
A copy of the import contract, proforma/ commercial invoice/ Bill of
Lading.
(vi)
A report from an international credit rating agency of repute, if the
lender is other than the recognised category as per ECB Guidelines issued by the
Government from time to time.
(vii)
In case the payment for imports is through Letter of Credit, a copy of
L/C with amendments, if any.
PART
A: CATEGORY OF ECB APPLICATION
The
application is being submitted under following scheme (please put (X) in the
correct box):
(1)
Under short term credit/ loan
(2)
Under USD 5 million Scheme
(3)
Under USD 10 million Scheme
(a)
Exporters�/ Foreign Exchange Earners �Scheme
(b)
Long Term Borrowers� Scheme
(c)
Infrastructure Projects
(d) Other
(Please specify)
PART
B: GENERAL INFORMATION ABOUT THE BORROWER
1.
Name of the applicant (Block Letters)
:
Address
:
2.
Status of the applicant firm/company
: Private Sector (
) Public
Sector (
)
NBFC ( ) (Indicate RBI Registration Number)
3.
Details of Foreign Currency Loans (ECB) availed of and/ or approval
obtained by the applicant during past 3 years under US$ 5 Million Scheme
RBI/
GOI Approval No. & date
|
Amount
outstanding
|
Due
date of final repayment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
Details of ECB parked abroad
|
Sr.
No.
|
Name
of the bank
|
Amount
in USD equivalent
|
No.
& date of RBI permission obtained for parking funds abroad and
validity period thereof
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PART
C: INFORMATION ABOUT THE PROPOSED LOAN /CREDIT
1.
Details of the loan /credit
|
Purpose
of the loan
|
Currency
|
Amount
|
US$
equivalent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nature
of ECB (Please put (X) in the appropriate box)
(i)
Suppliers� Credit
:
( )
(II) Buyers�
Credit
:
( )
(iii)
Syndicated Loan
:
( )
(iv)
Export Credit
:
( )
(v)
Loan from foreign collaborator/ equity holder
: (
)
(vi)
FRN/ Bonds
:
( )
(vii)
Others (please specify)
:
( )
Terms
and conditions of the loan
(i)
Rate of interest
(ii)
Up front fee
(iii)
Management fee
(iv)
Other charges, if any (Please specify)
(v)
All-in-cost
(vi)
Commitment fee
(vii)
Rate of Penal interest
(viii)
Period of loan
(ix)
Grace/ moratorium period
(x)
Repayment terms (half yearly/ annually/ bullet)
(xi)
Average maturity
2.
Details of the lender
:
Name and address of the lender/
supplier
:
:
3.
Nature of security to be provided, if any
:
PART
D: INFORMATION ABOUT DRAW DOWN AND REPAYMENTS
Proposed
schedule
|
Dawn
down
|
Repayment/
payment
|
|
Month
And Year
|
Amount
|
Principal
|
Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PART
E: Additional Information required for applications under Short Term Credit/
Loan
1.
Particulars of commodity (ies) to be imported
:
Description
:
Value
:
2.
Details of imports made/ to be made
:
(A)
(i) Payment Terms
:
(ii) Due
date of the import bill
:
(iii) Extension sought upto
:
(iv) If import has already been made
Value
assessed as per Bill of Entry
:
(Please enclose a copy)
(B)
If goods are yet to be received
:
(i)
Date of shipment
:
(ii) Whether
goods have been sold on high Seas
or any such sale is contemplated?
:
3.
Period upto which statement giving details of drawals,
utilisation & outstanding has been
submitted to RBI for
loans raised in the past
:
PART
F: ADDITIONAL INFORMATION IN RESPECT OF ECB UNDER USD 5/ 10 MILLION SCHEME
1.
Details of the project
(i) Total project cost in USD
:
(ii) Total ECB as a % of project cost
:
2.
Export realisation (USD equivalent) of the applicant
during the last 3 years [To be
furnished only in case of
applications under Exporters�/
Foreign Exchange
Earners� Scheme]
:
PART
G: CERTIFICATIONS
1.
By the applicant
We hereby certify that-
(i)
the particulars given above are true and correct to the best of our
knowledge and belief.
(ii)
the credit/ loan to be raised will be utilised for the purpose for which
it is being applied for vide this application and shall not be utilised
for investment in stock market and real estate.
Place:
Date:
(Signature of Authorised
Official of the applicant)
Name
____________________________________
STAMP
Designation ________________________________
2.
By the authorised dealer -
We hereby certify that-
(e)
the applicant is our customer.
(ii) we have scrutinized the application and
the original letter of offer from the lender/supplier and also all the documents
relating to the import/proposed import, proposed borrowing/financing arrangement
and have found the same to be in order.
(Signature
of Authorised Official)
Place
________
Name ____________________________________
Date
_________
STAMP
Name of the Bank/ branch ________________________________
A
D Code ______________________________________________
|