RESERVE BANK OF INDIA (RBI)

1. External Commercial Borrowings (ECB) for Civil Aviation Sector:  RBI vide A. P. (DIR Series) Circular No. 113 dated 24th April, 2012  has notified that as per the extant guidelines, availing of ECB for working capital is not a permissible end-use for civil aviation sector. RBI has  reviewed  the policy related to ECB and keeping in view the announcement made in the Union Budget for the Year 2012-13, has been decided to allow ECB for working capital as a permissible end-use for the civil aviation sector, under the approval route, subject to the conditions specified in the circular. 2. External Commercial Borrowings (ECB) Policy – Refinancing / of ECB (Revised): RBI vide A. P. (DIR Series) Circular No. 112 dated April 20, 2012  has notified that borrowers desirous of refinancing an existing ECB can raise fresh ECB at a higher all-in-cost/reschedule an existing ECB at a higher all-in-cost under the approval route subject to the condition that the enhanced all-in-cost does not exceed the all-in-cost ceiling prescribed as per the extant guidelines. . The modifications to the ECB policy will come into force with immediate effect 3. External Commercial Borrowings (ECB) Policy – Liberalisation and Rationalisation : RBI vide A. P. (DIR Series) Circular No. 111 dated April 20, 2012 has decided to further rationalize and liberalize the extant guidelines keeping in view the announcements made in the Union Budget for the Year 2012-13 which basically cover:-

• Enhancement of Refinancing limit for Power Sector.
• ECB for Maintenance and Operation of Toll systems for Roads and Highways.

4.  FDI Policy of 2012: The Department of Industrial Policy and Promotion has released the new consolidated foreign direct investment policy which is made effective from April 10, 2012. The New FDI Policy supersedes the earlier version of the consolidated FDI policy of 2011 and other press notes issued prior to April 9, 2012.  5.  Overseas Direct Investments – Liberalisation / Rationalisation: Presently, an Indian Party requires prior permission of RBI to open, hold and maintain Foreign Currency Account in a foreign country for the purpose of overseas direct investments in that country.RBI vide A. P. (DIR Series) Circular No.101 April 02, 2012  has decided to  liberalise these regulations as a result of which the Indian Party will be permitted to open, hold and maintain Foreign Currency Account (FCA) abroad for the purpose of overseas direct investments without obtaining prior permission from RBI, provided the conditions mentioned in the circular are adhered to.