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Issuance of Rupee denominated bonds overseas
This circular has made the following changes with respect to issuance of Rupees Denominated Bonds overseas: –
a)
The maximum amount that can be borrowed by an entity in a financial
year under the automatic route by issuance of these bonds will be Rs. 50
billion and not US $ 750 million. Borrowing beyond Rs. 50 billion in a
financial year will require prior approval of RBI.
b) These
bonds can only be issued / transferred / offered as security overseas in
a country and can only be subscribed by a resident of a country:
a. That is a member of Financial Action Task Force (FATF ) or a member of a FATF – Style Regional Body; and
b.
Whose securities market regulator is a signatory to the International
Organization of Securities Commission’s (IOSCO’s) Multilateral
Memorandum of Understanding (Appendix A Signatories) or a signatory to
bilateral Memorandum of Understanding with the Securities and Exchange
Board of India (SEBI) for information sharing arrangements; and
c. Should not be a country identified in the public statement of the FATF as:
i.
A jurisdiction having a strategic Anti-Money Laundering or Combating
the Financing of Terrorism deficiencies to which counter measures apply;
or
ii. A jurisdiction that has not made sufficient progress in
addressing the deficiencies or has not committed to an action plan
developed with the Financial Action Task Force to address the
deficiencies.
c) The minimum maturity period for these bonds
will be three years in order to align them with the maturity
prescription regarding foreign investment in corporate bonds through the
Foreign Portfolio Investment (FPI) route.
d) Borrowers have to
obtain the list of primary bond holders and so that the same can be
provided to Regulatory Authorities in India as and when required.
e)
Banks are required to report to the Foreign Exchange Department,
External Commercial Borrowings Division, Central Office, Shahid Bhagat
Singh Road, Fort, Mumbai – 400 001, the figures of actual drawdown(s) /
repayment(s) by their constituent borrowers quoting the related loan
registration number. However, reporting by email shall be made on the
date of transaction itself.
