RESERVE BANK OF INDIA

External Commercial Borrowings (ECB) for Civil Aviation Sector

The Reserve Bank of India had earlier issued a circular in terms of which External Commercial Borrowings (ECB) could be raised by airline companies for working capital as a permissible end-use, under the approval route. The scheme was extended until 31st December, 2013. RBI has now vide its circular RBI/2013-14/537 A.P.(DIR Series) Circular No.113 dated March 26, 2014 has extended the scheme of raising ECB for working capital for Civil Aviation Sector until 31st March, 2015.

Buyback of assets from SC/RCs by the Defaulters and acquisition of assets by

SC/RCs from sponsor banks

The Reserve Bank of India has issued the circular no. RBI/2013-2014/523 -DNBS (PD) CC.No. 37/SCRC/26.03.001/2013-2014 dated 19th March, 2014, modifying the existing Guidelines of “The Securitisation Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003” as under:

• SC/ RCs are not permitted to acquire any non performing financial asset from their sponsor banks on a bilateral basis, whatever may be the consideration. However, they may participate in auctions of non-performing assets by their sponsor banks provided such an auction is conducted in a transparent manner, on arms length basis, at prices determined by the market factors.

• Promoters of the defaulting company/ borrowers or guarantors are allowed to buy back their assets from the SC/RCs provided that the conditions specified therein are met.

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) (Second Amendment) Regulations, 2014

The Reserve Bank of India has issued Notification No. FEMA. 297/2014-RB dated 13th March 2014 making amendments in the Foreign Exchange Management (Transfer or Issue of Security by Person Resident Outside India) Regulations, 2000 (Notification No. FEMA 20/2000- RB dated 3rd May 2000)

Money Transfer Service Scheme – ‘Direct to Account’ facility

The Reserve Bank of India has issued the circular no. A.P. (DIR Series) Circular No. 110 dated 4thMarch, 2014 facilitating the receipt of foreign inward remittances directly into bank account of the beneficiary. As a result of this, the foreign inward remittances received under MTSS will be allowed to be transferred to the KYC compliant beneficiary bank account through electronic mode, such as NEFT, IMPS etc.,