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P. 50

RBI CIRCULAR

per cent to 7.75 per cent with effect from September 29,        Registration Number (LRN) through submission of Form 83
2015.                                                           where type of ECB is to be specifically mentioned as
                                                                borrowing through issuance of Rupee denominated bonds
All penal interest rates on shortfall in reserve requirements,  overseas), parking of bond proceeds, security / guarantee
which are specifically linked to the Bank Rate, also stand      for the borrowings, conversion into equity, corporates under
revised.                                                        investigation, etc., not appearing in the Annex will be
                                                                applicable for borrowing by issuance of Rupee denominated
Yours faithfully                                                bonds overseas.
(Lily Vadera)
Chief General Manager                                           AD Category-I banks may bring the contents of this circular
                                                                to the notice of their constituents and customers.
  External Commercial Borrowings (ECB)
 Policy - Issuance of Rupee denominated                         The directions contained in this circular have been issued
                                                                under Section 10(4) and 11(1) of the Foreign Exchange
                 bonds overseas                                 Management Act, 1999 (42 of 1999) and are without
                                                                prejudice to permissions / approvals, if any, required under
RBI/2015-16/193                                                 any other law.
A.P. (DIR Series) Circular No.17

September 29, 2015                                              Yours faithfully
                                                                (B. P. Kanungo)
To,                                                             Principal Chief General Manager
All Authorised Dealer Category - I Banks
Madam/ Sir                                                      Regularization of assets held abroad by a
In order to facilitate Rupee denominated borrowing from           person resident in India under Foreign
overseas, it has been decided to put in place a framework            Exchange Management Act, 1999
for issuance of Rupee denominated bonds overseas within
the overarching ECB policy. The broad contours of the           September 30, 2015
framework are as follows:
i. Eligible borrowers: Any corporate or body corporate as       To
                                                                All Category - I Authorised Dealer Banks
     well as Real Estate Investment Trusts (REITs) and          Madam / Sir,
     Infrastructure Investment Trusts (InvITs).                 1. The Government of India has enacted The Black Money

ii. Recognised investors: Any investor from a Financial              (Undisclosed Foreign Income and Assets) and Imposition
     Action Task Force (FATF) compliant jurisdiction.                of Tax Act, 2015 (Black Money Act) on May 26, 2015
                                                                     to address the issue of undisclosed assets held abroad.
iii. Maturity: Minimum maturity period of 5 years.                   It provides for separate taxation of income and assets
                                                                     acquired abroad from income not disclosed but
iv. All-in-cost: All in cost should be commensurate with             chargeable to tax in India.
     prevailing market conditions.
                                                                2. To effectively deal with assets held abroad by persons
v. Amount: As per extant ECB policy.                                 resident in India in violation of the Foreign Exchange
                                                                     Management Act, 1999 (FEMA) for which declarations
vi. End-uses: No end-use restrictions except for a negative          have been made and taxes and penalties have been
     list.

All other provisions of extant ECB guidelines regarding
reporting requirements (including obtaining Loan

50 | 2015 | NOVEMBER                                            | BANKING FINANCE

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