TMI BlogRegulation 6(2) - Borrowings in Foreign Exchange under the Approval RouteX X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Financial institutions dealing exclusively with infrastructure or export finance such as IDFC, IL FS, Power Finance Corporation, Power Trading Corporation, IRCON and Exim Bank. (c) Banks and financial institutions which had participated in the textile or steel sector restructuring package as approved by the Central Government. (d) Entities falling outside the purview of the Automatic Route as per Schedule I. (e) Any other entity as specified by the Reserve Bank. (ii) Lenders The borrowings in foreign currency by way of issue of bonds, floating rate notes or other debt instruments by whatever name called may be made from - (a) International bank or export credit agency or international capital market or (b) Multilateral financial institutions, namely, IFC, ADB, CDC etc., or (c) Foreign collaborator or foreign equity holder as specified by the Reserve Bank or (d) Supplier of equipments provided the amount of loan raised does not exceed the total cost of the equipment being supplied by the lender or 1 (e) Any other eligible entity as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied hotels located outside cities with population of more than 1 million (fixed capital investment is excluding of land value), (iii) common infrastructure for industrial parks, SEZs, tourism facilities, (iv) fertilizer (capital investment), (v) post harvest storage infrastructure for agriculture and horticulture produce including cold storage, (vi) soil testing laboratories and (vii) cold chain (includes cold room facility for farm level pre-cooling, for preservation or storage or agriculture and allied produce, marine products and meat. (g) Any other sectors as prescribed by the Reserve Bank in consultation with Government of India.] (b) for first stage acquisition of shares in the disinvestment process and also in the mandatory second stage offer to the public under the Government's disinvestment programme of PSU shares. (c) for direct investment in overseas Joint Ventures (JV)/Wholly Owned Subsidiaries (WOS) subject to the existing guidelines on Indian Direct Investment in JV/WOS abroad. 6 [(AA) Borrowings in foreign exchange per borrower company per financial year up t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antee, or Letter of Comfort or Standby Letter of Credit in favour of Small and Medium Enterprises (SMEs) with the approval of the Reserve Bank. 3 Exception- 2 -Banks may provide Bank Guarantee, Standby Letter of Credit, Letter of Undertaking or Letter of Comfort in respect of ECB by textile companies for modernisation or expansion of their textile units, with the approval of the Reserve Bank. (vii) Prepayment Notwithstanding the provisions of clause (iv) above, prepayment of outstanding foreign currency loan may be made as per the directives issued by the Reserve Bank from time to time. 8 [viii) Parking of loan amount The proceeds of borrowings in foreign exchange availed under the schedule may, pending utilisation for permissible end-uses, be parked abroad or in India as directed by the Reserve Bank from time to time] (ix) Loan Agreement The loan agreement entered into by the borrower with the overseas lender shall strictly conform with these Regulations. The procedure for obtaining loan registration number would be as specified by the Reserve Bank. (x) Drawal of loan Draw-downs of borro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e approval route, any provision or proviso regarding various parameters listed in paragraphs 1 to 5 above of this Schedule or any other parameter as prescribed by the Reserve Bank and also prescribe the date from which any or all of the existing provisions will cease to exist, in respect of borrowings from overseas, whether in foreign currency or Indian Rupees, such as addition / deletion of borrowers eligible to raise such borrowings, overseas lenders / investors, purposes of such borrowings, change in amount, maturity and all-incost, norms regarding security, pre-payment, parking of ECB proceeds, reporting and drawal of loan, refinancing, debt servicing, etc. ] ******************* Note : 1. Has been inserted vide Notification No. 157/2007 dated 30/8/2007 (w.e.f 1st day of August, 2005) 2. Has been inserted vide Notification No. 157/2007 dated 30/8/2007 (w.e.f 1st day of August, 2005) 3 . Has been numbered as Exception 1 and shall be deemed to have been numbered with effect from the 4th day of November, 2005 and after Exception 1 as so numbered, the above Exception has been inserted and shall be deemed to have been inserted with effect from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd-use shall require prior approval of the Reserve Bank of India. 7. Substituted vide notification no. 194/2009 dated 17/6/2009 with effect from 8th day of October 2008, before it was read as, Explanation: The following sectors will qualify as infrastructure projects, namely:- i) Power, ii)Telecommunications, iii)Railways, iv)Roads including bridges, v)Ports, vi)Industrial Parks and vii)Urban infrastructure (water supply, sanitation and sewage projects). 8 . Substituted vide notification no. 194/2009 dated 17/6/2009 with effect from 22nd day of October, 2008, before it was read as viii Parking of loan amount abroad The proceeds of borrowings in foreign exchange shall be parked abroad until actual requirement in India. 9. Inserted vide Notification No. FEMA. 246/2012-RB, Dated 27/11/2012 10. Omitted vide Notification No.FEMA.250/2012-RB, dated 6-12-2012 , w.e.f. 26-09-2011 , before it was read as:- (5) No corporate registered under the Companies Act, 1956 shall avail domestic rupee denominated structured obligations credit enhanced by international banks, international financial institutions or joint venture partners, except wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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