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Presently, the Civil Aviation sector could avail of ECB for working capital purposes within 12 months from the date of issue of the erstwhile circular (i.e. A.P. (DIR Series) Circular No. 113 dated 24th April, 2012).
This circular has extended the said period and hence, the Civil Aviation sector can now avail of ECB for working capital purposes upto 31st December, 2013.
Buyback/prepayment of Foreign Currency Convertible Bonds (FCCBs)
This circular has extended the last date of the existing scheme for Buyback/Prepayment of FCCB, under the approval, route to 31st December, 2013 from 31st March, 2013.
Presently,
only Authorised Dealers Category-I banks are permitted to issue foreign
exchange pre-paid cards to residents travelling on private/business
visit abroad.
This Circular now permits Authorised Dealers
Category-II also to issue foreign exchange pre-paid cards to residents
travelling on private/business visits abroad, provided:
(1) AD Category-II adheres to KYC/AML/CFT requirements.
(2) Settlement in respect of foreign exchange prepaid cards is effected through AD Category-I banks.
2. Opening of Nostro Accounts
This Circular permits AD Category-II to open Nostro accounts subject to the following terms and conditions:
(i) Only one Nostro account for each currency must be opened.
(ii)
Balances in the account must be utilised only for the settlement of
remittances sent for permissible purposes and not for the settlement in
respect of foreign exchange prepaid cards.
(iii) Idle balance cannot be maintained in the said account.
(iv) Reporting requirements as prescribed are complied with.
(1) The Indian Party is eligible to undertake overseas direct investments.
(2) The host country Regulations require that investments into the country are to be routed through a designated account in that country.
(3) FCA is opened, held and maintained as per the regulations of the host country.
(4) Remittances sent to the FCA by the Indian party are utilised only for making overseas direct investment into the overseas JV/WOS.
(5) Any amount received in the account by way of dividend and/or other entitlements from the overseas JV/WOS are repatriated to India within 30 days from the date of credit.
(6) The Indian Party submits details of debits and credits in the FCA on yearly basis to the designated bank along with a certificate from the Statutory Auditors of the Indian party certifying that the FCA was maintained as per the host country laws and applicable FEMA regulations/provisions.
(7) FCA so opened must be closed immediately or within 30 days from the date of disinvestment from overseas JV/WOS or cessation thereof.
This Circular states that the present all-in-cost ceiling or Trade Credits, as mentioned below, will continue up to September 30, 2012:
|
Sr. No. |
Average maturity period |
All-in-cost over 6 month LIBOR for the respective |
|
1 |
Up to one year |
350 bps |
|
2 |
More than 1 year and up to 3 years |
350 bps |
All-in-cost ceiling will include arranger fee, upfront fee, management fee, handling/processing charges, out-of-pocket and legal expenses, if any.
This Circular states that the present all-in-cost ceiling for ECB, as mentioned below, will continue up to September 30, 2012:
|
Sr. |
Average maturity period |
All-in-cost over 6 month No. LIBOR for the respective currency of borrowing or applicable benchmark |
|
1 |
Three years and |
350 bps |
|
2 |
More than five years |
550 bps |
This Circular states that with effect from July 1, 2012, GR forms will only be available online from RBI website www.rbi.org.in at the following link:
“Notification -> FEMA -> Forms -> For Printing of GR Form”.
This Circular states that henceforth all proceeds of ECB raised abroad and meant for Rupee expenditure in India should be brought back immediately by the borrowers for credit to their Rupee accounts with banks in India. These Rupee funds cannot be used for investment in capital markets, real estate or for inter-corporate lending. Only ECB proceeds meant for foreign currency expenditure can be retained abroad pending utilisation.
Presently, shares can be allotted to a foreign investor under the Approval Route of the FDI Scheme against payments made by him (the foreign investor) towards pre-operative/pre-incorporation expenses (including payments of rent, etc.) only if the payment is routed through the bank account of the investee company.
This circular has modified the said condition and provides that equity shares can be allotted to a for-eign investor under the Approval Route of the FDI Scheme against payments made by him (the foreign investor) towards pre-operative/pre-incorporation expenses (including payments of rent, etc.) if the payment is routed through the bank account of the investee company or the payment is made from the bank account opened by the foreign investor as provided under FEMA Regulations. The amended paragraph is as under: –
Presently, gold can be imported by the nominated banks/agencies on a consignment basis. Ownership of the gold will rest with the supplier and the nominated banks/agencies only act as agents of the supplier. Remittances towards the cost of import have to be made as and when sales take place.
This circular restricts the import of gold on consignment basis, by providing that banks can import gold on consignment basis, only to meet the genuine needs of exporters of gold jewellery.
1. To grant permission to listed companies to hedge the price risk in respect of any commodity (except gold, silver, platinum) in the international commodity exchanges/markets as specified under the delegated route.
2. To grant permission to unlisted companies to hedge price risk on import/export in respect of any commodity (except gold, silver, platinum) in the international commodity exchanges/markets subject to guidelines Annexed to this Circular.
Presently, RBI had notified the names of 9 mining companies to whom an importer (other than a Public Sector Company (PSC) or a Department/Undertaking of the Government of India/State Government) could make advance remittance without any limit and without bank guarantee or stand by letter of credit for import of rough diamonds into India.
This circular provides that henceforth RBI will not notify the names of mining companies to whom an importer (other than a Public Sector Company (PSC) or a Department/Undertaking of the Government of India/State Government) could make advance remittance without any limit and without bank guarantee or stand by letter of credit for import of rough diamonds into India.
Henceforth, banks can decide, subject to certain conditions, on overseas mining companies to whom an importer (other than PSC or Department/Undertaking of Government of India/State Government) can make advance payments, without any limit / bank guarantee/stand-by letter of Credit for import of rough diamonds into India.
In case of an importer entity in the Public Sector or a Department/Undertaking of the Government of India/State Government/s, banks can permit advance remittance subject to satisfaction of the applicable conditions and a specific waiver of bank guarantee from the Ministry of Finance, Government of India, where the advance payments is equivalent to or exceeds US $ 100,000.
Banks have to submit a report of all advance remittances made without a bank guarantee or standby letter of credit, where the amount of advance payment is equivalent to or exceeds US $ 5,000,000, to the concerned Regional Office of Reserve Bank of India, in the format annexed to this circular, within 15 calendar days of the close of each half year.
