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March 2012

A.P. (DIR Series) Circular No. 69, dated 25- 11-2012 External Commercial Borrowings — Simplification of procedure.

By Gaurang Gandhi, Chartered Accountant
Reading Time 2 mins
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Presently, approval of RBI is required for:

(a) Cancellation of Loan Registration Number (LRN); or
(b) Change in permissible end-use for an existing ECB

This Circular has granted powers to banks to approve changes in respect of the above i.e., cancellation of LRN and change in permissible end-use, subject to certain conditions.

(a) Cancellation of LRN

Banks can directly approach DSIM for cancellation of LRN for ECBs availed, both under the automatic and approval routes, provided

(i) No draw-down for the said LRN has taken place; and
(ii) Monthly ECB-2 returns till date in respect of the LRN have been submitted to DSIM.

(b) Change in the end-use of ECB proceeds

Banks can approve requests for change in end-use in respect of ECB availed under the Automatic Route, provided

(i) The proposed end-use is permissible under the automatic route;
(ii) There is no change in the other terms and conditions of the ECB;
(iii) ECB is in compliance with the extant guidelines; and
(iv) Monthly ECB-2 returns till date in respect of the LRN have been submitted to DSIM.

However, RBI approval will be required for change in the end-use of ECB availed under the Approval Route.

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