February 2, 2013
- External Commercial Borrowings (ECB) Policy – Non-Banking Financial Company – Infrastructure Finance Companies (NBFC-IFCs) RBI has decided to enhance the ECB limit for NBFC-IFCs under the automatic route from 50 % of their owned funds to 75 % of their owned funds, including the outstanding ECBs. NBFC-IFCs desirous of availing ECBs beyond 75 % of their owned funds would require the approval of the Reserve Bank and will, therefore, be considered under the approval route. RBI has decided to reduce the hedging requirement for currency risk from 100 per cent of their exposure to 75 per cent of their exposure.RBI/2012-13/367 A.P. (DIR Series) Circular No. 69 dated 07.01.2013
- Foreign Direct Investment (FDI) in India - Issue of equity shares under the FDI scheme allowed under the Government route RBI has vide its circular RBI/2012-13/375 A. P. (DIR Series) Circular No.74 dated 10.01.2013 amended certain conditions for allowing the issue of equity shares/preference shares under the Government route. As per the revised conditions, issue of equity shares/preference shares by conversion of import of capital goods, etc., have been amended so as to exclude second hand machineries.
- Reporting under Foreign Exchange Management Act, 1999 (FEMA) RBI has reiterated that all the transactions involving Foreign Direct Investment (FDI), External Commercial Borrowing (ECB) and Outward Foreign Direct Investment (ODI) are important components of our Balance of Payments statistics which are being compiled and published on a quarterly basis. Any delay in reporting affects the integrity of data and consequently the quality of policy decisions relating to capital flows into and out of the country. RBI has vide its notification RBI/2012-13/383 A.P. (DIR Series) Circular No. 76 dated 17.01.2013 advised the Authorised Dealers to take necessary steps to ensure that checks and balances are incorporated in systems relating to dealing with and reporting of foreign exchange transactions so that contraventions of provisions of FEMA, 1999 attributable to the Authorised Dealers do not occur.
- Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2013 RBI has vide its Notification No.FEMA. 255/2013-RB dated 19.01.2013 made certain amendments to Schedule 5 to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, (Notification No.FEMA 20/2000-RB dated 3rd May 2000).
- External Commercial Borrowings (ECB) Policy – Repayment of Rupee loans and/or fresh Rupee capital expenditure – USD 10 billion scheme As per the extant guidelines, Indian companies in the manufacturing and infrastructure sector (as defined under the extant ECB policy), which are consistent foreign exchange earners, are allowed to avail of ECBs for repayment of outstanding Rupee loan(s) availed of from the domestic banking system and / or for fresh Rupee capital expenditure. RBI has vide its circular RBI/2012-13/387 A.P. (DIR Series) Circular No.78 dated 21.01.2013, decided to include Indian companies in the hotel sector (with a total project cost of INR 250 crore or more), irrespective of geographical location as eligible borrowers under this scheme. AD may certify the project cost at the time of forwarding the ECB application to the Reserve Bank.