TMI BlogMaster Circular on External Commercial Borrowings and Trade Credits((Updated as on September 11, 2015)X X X X Extracts X X X X X X X X Extracts X X X X ..... rculars/ notifications for detailed information, if so needed. 3. This Master Circular is being updated from time to time as and when the fresh instructions are issued. The date up to which the Master Circular has been updated is suitably indicated. Yours faithfully (B P Kanungo) Principal Chief General Manager Index PART I EXTERNAL COMMERCIAL BORROWINGS (ECB) I.(A) AUTOMATIC ROUTE i) Eligible Borrowers ii) Recognised Lenders iii) Amount and Maturity iv) All-in-cost ceilings v) End-use vi) Payment for Spectrum Allocation vii) End-uses not permitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... INANCE VI. CONVERSION OF ECB INTO EQUITY VII. CRYSTALLISATION OF ECB VIII. ECB UNDER THE ERSTWHILE USD 5 MILLION SCHEME IX. COMPLIANCE WITH ECB GUIDELINES X. REPORTING ARANGEMENTS AND DISSEMINATION OF INFORMATION i) Reporting Arrangements ii) Dissemination of Information XI. RATIONALIZATION OF PROCEDURES - DELEGATION OF POWERS TO AUTHORISED DEALERS (AD) (a) Changes/modifications in the drawdown/repayment schedule (b) Changes in the currency of borrowing (c) Change of the AD bank (d) Changes in the name of the Borrower Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onvertible preference shares), buyers credit, suppliers credit availed of from non-resident lenders with a minimum average maturity of 3 years. (ii) Foreign Currency Convertible Bonds (FCCBs): FCCBs mean a bond issued by an Indian company expressed in foreign currency, and the principal and interest in respect of which are payable in foreign currency. The bonds are required to be issued in accordance with the scheme viz., Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993 , and subscribed by a non-resident in foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole, or in part, on the basis of any equity related warrants attached to debt instruments. The ECB policy is applicable to FCCBs. The issue of FCCBs is also required to adhere to the provisions of Notification FEMA No. 120/RB-2004 dated July 7, 2004, as amended from time to time. (iii) Preference shares: Preferences Shares (i.e. non-convertible, optionally convertible or partially convertible) for issue of which, funds have been received on or after May 1, 2007 would be considered as debt a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nks, financial institutions (FIs), Housing Finance Companies (HFCs) and Non-Banking Financial Companies (NBFCs), other than those specifically allowed by Reserve Bank, are eligible to raise ECB. Individuals, Trusts (other than those engaged in Micro-finance activities) and Non-Profit making organizations are not eligible to raise ECB. (b) Units in Special Economic Zones (SEZ) are allowed to raise ECB for their own requirement. However, they cannot transfer or on-lend ECB funds to sister concerns or any unit in the Domestic Tariff Area (DTA). (c) NBFCs-IFCs are permitted to avail of ECBs for on-lending to the infrastructure sector as defined under the ECB policy. (d) NBFCs-AFCs are permitted to avail of ECBs for financing the import of infrastructure equipment for leasing to infrastructure projects. (e) Non-Government Organizations (NGOs) engaged in micro finance activities are eligible to avail of ECB. (f) Micro Finance Institutions (MFIs) engaged in micro finance activities are eligible to avail of ECBs. MFIs registered under the Societies Registration Act, 1860, MFIs registered under Indian Trust Act, 1882, MFIs registered either under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company (CIC) regulatory framework of the Reserve Bank, the ECB availed should be within the ceiling of leverage stipulated for CICs and in case of CICs with asset size below ₹ 100 crore, the ECB availed of should be on fully hedged basis. ii) Recognised Lenders (1) Borrowers can raise ECB from internationally recognized sources, such as (a) international banks, (b) international capital markets, (c) multilateral financial institutions (such as IFC, ADB, CDC, etc.) / regional financial institutions and Government owned development financial institutions, (d) export credit agencies, (e) suppliers of equipment, (f) foreign collaborators and (g) foreign equity holders [other than erstwhile Overseas Corporate Bodies (OCBs)]. (2) NGOs engaged in micro finance and MFIs registered as societies, trusts and co-operatives can avail of ECBs from (a) international banks, (b) multilateral financial institutions, (c) export credit agencies (d) overseas organisations and (e) individuals. (3) NBFC-MFIs will be permitted to avail of ECBs from multilateral institutions, such as IFC, ADB etc./ regional financial institutions/international banks / foreign equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the bank for at least a period of two years, (ii) that the lending entity is organised as per the local laws and held in good esteem by the business/local community and (iii) that there is no criminal action pending against it. ii. Individual Lender has to obtain a certificate of due diligence from an overseas bank indicating that the lender maintains an account with the bank for at least a period of two years. Other evidence /documents such as audited statement of account and income tax return, which the overseas lender may furnish, need to be certified and forwarded by the overseas bank. Individual lenders from countries wherein banks are not required to adhere to Know Your Customer (KYC) guidelines are not eligible to extend ECB. iii) Amount and Maturity a. The maximum amount of ECB which can be raised by a corporate other than those in the hotel, hospital and software sectors, and corporate in miscellaneous services sector is USD 750 million or its equivalent during a financial year. b. Corporates in the services sector viz. hotels, hospitals and software sector and miscellaneous services sector are allowed to avail of ECB up to USD 200 mil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ceilings over 6 month LIBOR* Three years and up to five years 350 basis points More than five years 500 basis points * for the respective currency of borrowing or applicable benchmark In the case of fixed rate loans, the swap cost plus margin should be the equivalent of the floating rate plus the applicable margin. The rate of penal interest should not be more than 2 per cent of the all-in-cost of ECB. v) End-use a. ECB can be raised for investment such as import of capital goods (as classified by DGFT in the Foreign Trade Policy), new projects, modernization/expansion of existing production units in real sector - industrial sector including small and medium enterprises (SME), infrastructure sector and specified service sectors, viz. hotel, hospital and software and miscellaneous services sector as given at I(A)(i)(j) above. Infrastructure sector is defined as (a) Energy which will include (i) electricity generation, (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stages of acquisition of shares in the disinvestment process to the public under the Government s disinvestment programme of PSU shares. d. Interest during Construction (IDC) for Indian companies which are in the infrastructure sector, where infrastructure is defined as per the extant ECB guidelines, subject to IDC being capitalized and forming part of the project cost. e. For on-lending to self-help groups or for micro-credit or for bonafide micro finance activity including capacity building by NGOs engaged in micro finance activities. f. NBFC-IFCs can avail of ECBs only for on-lending to the infrastructure sector as defined under the ECB policy. g. NBFC-AFCs can avail of ECBs only for financing the import of infrastructure equipment for leasing to infrastructure projects. h. Maintenance and operations of toll systems for roads and highways for capital expenditure provided they form part of the original project i. SIDBI can on lend to the borrowers in the MSME sector for permissible end uses, having natural hedge by way of foreign exchange earnings. SIDBI may on-lend either in INR or in foreign currency (FCY). In case of on-l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / subsidiaries of Indian banks. vii) End-uses not permitted Other than the purposes specified hereinabove, the borrowings shall not be utilized for any other purpose including the following purposes, namely: (a) For on-lending or investment in capital market or acquiring a company (or a part thereof) in India by a corporate [investment in Special Purpose Vehicles (SPVs), Money Market Mutual Funds (MMMFs), etc., are also considered as investment in capital markets]. (b) for real estate sector, (c) for general corporate purpose which includes working capital (other than what has been given at I(A)(v)(l) above) and repayment of existing rupee loans Note: The proceeds of the ECBs should not be used for acquisition of land. viii) Guarantees Issuance of guarantee, standby letter of credit, letter of undertaking or letter of comfort by banks, Financial Institutions and Non-Banking Financial Companies (NBFCs) from India relating to ECB is not permitted. ix) Security The choice of security to be provided to the overseas lender / supplier for securing ECB is left to the borrower. AD Category-I banks ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India or of any mutual funds, standing in the name of ECB borrower/promoter, will also be permitted. ii. In addition, security interest over all current and future loan assets and all current assets including cash and cash equivalents, including Rupee accounts of the borrower with AD Category-I banks in India, standing in the name of the borrower/promoter, can be used as security for ECB. The Rupee accounts of the borrower/promoter can also be in the form of escrow arrangement or debt service reserve account. iii. In case of invocation of pledge, transfer of financial securities shall be in accordance with the extant FDI/FII policy including provisions relating to sectoral cap and pricing as applicable read with the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000. (d) Issue of Corporate or Personal Guarantee i. A copy of Board Resolution for the issue of corporate guarantee for the company issuing such guarantee, specifying name of the officials authorised to execute such guarantees on behalf of the company or in individual capacity should be obtained. ii. Specific reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xii) Refinancing of an existing ECB The existing ECB, whether raised under the automatic route or the approval route, may be refinanced by raising a fresh ECB subject to the condition that the fresh ECB is raised at a lower all-in-cost, the outstanding maturity of the original ECB is not reduced (i.e. outstanding maturity of the existing ECB is either maintained or elongated) and the amount of fresh ECB is eligible to be raised under the automatic route. Further, such refinance is not permitted by raising fresh ECB from overseas branches / subsidiaries of Indian banks. xiii) Debt Servicing The designated AD bank has the general permission to make remittances of installment of principal, interest and other charges in conformity with the ECB guidelines issued by Government / Reserve Bank of India from time to time. xiv) Corporates Under Investigation All entities against which investigations / adjudications / appeals by the law enforcing agencies are pending may avail of ECBs as per the current norms, if they are otherwise eligible, notwithstanding the pending investigations / adjudications / appeals, without prejudice to the outcome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CCB is USD 100 million and (iv) the applicant should submit the purpose / plan of utilization of funds. g. Special Purpose Vehicles, or any other entity notified by the Reserve Bank, set up to finance infrastructure companies / projects exclusively, will be treated as Financial Institutions and ECB by such entities will be considered under the Approval Route. h. Multi-State Co-operative Societies engaged in manufacturing activity and satisfying the following criteria i) the Co-operative Society is financially solvent and ii) the Co-operative Society submits its up-to-date audited balance sheet. i. SEZ developers can avail of ECBs for providing infrastructure facilities within SEZ (infrastructure sector as given at I(A)(v)(a) above). j. Developers of National Manufacturing Investment Zones (NMIZs) can avail of ECB for providing infrastructure facilities within SEZ (infrastructure sector as given at I(A)(v)(a) above). k. Eligible borrowers under the automatic route other than corporates in the services sector viz. hotel, hospital and software and in the miscellaneous services sector can avail of ECB beyond USD 750 million or equivalent per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Core Investment Company (CIC) regulatory framework of the Reserve Bank, the ECB availed should be within the ceiling of leverage stipulated for CICs and in case of CICs with asset size below ₹ 100 crore, the ECB availed of should be on fully hedged basis. l) Cases falling outside the purview of the automatic route limits and maturity period as indicated at paragraph I A (iii). ii) Recognised Lenders (a) Borrowers can raise ECB from internationally recognised sources, such as (i) international banks, (ii) international capital markets, (iii) multilateral financial institutions (such as IFC, ADB, CDC, etc.)/ regional financial institutions and Government owned development financial institutions, (iv) export credit agencies, (v) suppliers' of equipment, (vi) foreign collaborators and (vii) foreign equity holders (other than erstwhile OCBs).Overseas branches / subsidiaries of Indian banks are not recognised as lenders in case the end use is repayment / refinance of Rupee loans raised from domestic banking system under any of the schemes under the ECB policy. (b) A foreign equity holder to be eligible as recognized lender under the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illustration for calculation of average maturity period is provided at Annex VI. All eligible borrowers can avail of ECBs designated in INR from recognised lenders as per the extant ECB guidelines. iv) All-in-cost ceilings All-in-cost includes rate of interest, other fees and expenses in foreign currency except commitment fee, pre-payment fee and fees payable in Indian Rupees. The payment of withholding tax in Indian Rupees is excluded for calculating the all-in-cost. The existing all-in-cost ceilings for ECB are as under: Average Maturity Period All-in-cost Ceilings over 6 month LIBOR* Three years and up to five years 350 basis points More than five years 500 basis points * for the respective currency of borrowing or applicable benchmark In the case of fixed rate loans, the swap cost plus the margin should be the equivalent of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;new infrastructure' project(s) (ii) in respect of remaining 25 per cent, the refinance shall only be utilized for repayment of the Rupee loan availed of for 'capital expenditure' of earlier completed infrastructure project(s); and (iii) the refinance shall be utilized only for the Rupee loans which are outstanding in the books of the financing bank concerned. (iv) ECB should not be raised from overseas branches / subsidiaries of Indian banks. Companies in the power sector are permitted to utilize up to 40 per cent of the fresh ECB raised by them towards refinancing of the Rupee loan/s availed by them from the domestic banking system subject to the condition that at least 60 per cent of the fresh ECB proposed to be raised should be utilized for fresh capital expenditure for infrastructure project(s). g. ECB is allowed for Import of services, technical know-how and payment of license fees. The companies in the manufacturing and infrastructure sectors may import services, technical know-how and payment of license fees as part of import of capital goods subject to certain conditions. h. Bridge Finance: Indian companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with consistent forex earnings USD 10 billion scheme a) Indian companies in the manufacturing, infrastructure sector and hotel sector (with a total project cost of INR 250 crore or more irrespective of geographical location for hotel sector), can avail of ECBs for repayment of outstanding Rupee loans availed of for capital expenditure from the domestic banking system and/or fresh Rupee capital expenditure provided they are consistent foreign exchange earners during the past three financial years and not in the default list/caution list of the Reserve Bank of India. The overall ceiling for such ECBs shall be USD10 (ten) billion and the maximum ECB that can be availed by an individual company or group, as a whole, under this scheme will be restricted to USD 3 billion. Further, the maximum permissible ECB that can be availed of by an individual company will be limited to 75 per cent of the average annual export earnings realized during the past three financial years or 50 per cent of the highest foreign exchange earnings realized in any of the immediate past three financial years, whichever is higher. In case of Special Purpose Vehicles (SPVs), which have complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion projects will also be eligible under the low cost affordable housing scheme, the eligibility of which would be based on the parameters to be set by the Central Sanctioning and Monitoring Committee of the Affordable Housing in Partnership Scheme (AHP) constituted for the purpose. ECB proceeds shall be utilized only for low cost affordable housing projects and shall not be utilized for acquisition of land. (b) Developers/builders may avail of ECB for low cost affordable housing projects provided they are companies registered under the Companies Act, 1956, having minimum 3 years experience in undertaking residential projects, have good track record in terms of quality and delivery and the project and all necessary clearances from various bodies including Revenue Department with respect to land usage/environment clearance, etc., are available on record. They should also not have defaulted in any of their financial commitments to banks/ financial institutions or any other agencies and the project should not be a matter of litigation. The ECB should be swapped into Rupees for the entire maturity on fully hedged basis. (c) Housing Finance Companies (HFCs) can also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the approval route. Once NHB decides to forward an application for consideration of RBI, the prospective borrower (builder/developer) will be advised by the NHB to approach RBI for availing ECB through his Authorised Dealer in the prescribed format. (g) Developers / builders / HFCs / NHB will not be permitted to raise Foreign Currency Convertible Bonds (FCCBs) under this scheme. (h) An aggregate limit of USD 1(one) billion each for the financial years 2013-14, 2014-15 and 2015-16 is fixed for ECB under the low cost affordable housing scheme which includes ECBs to be raised by developers/builders and NHB/specified HFCs. viii) 3G Spectrum Allocation The payment for 3G spectrum allocation, initially met out of Rupee resources raised domestically from banks by the successful bidders and are still outstanding in telecom operator s books of account is allowed to be refinanced with a long-term ECB, till March 31, 2014. ix) End-uses not permitted Other than the purposes specified hereinabove, the borrowings shall not be utilised for any other purpose including the following purposes, namely: (a) For on-lending or investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (c) deposits with overseas branches / subsidiaries of Indian banks abroad. The funds should be invested in such a way that the investments can be liquidated as and when funds are required by the borrower in India. b) ECB proceeds raised abroad meant for Rupee expenditure in India: Funds meant for local sourcing of capital goods, on-lending to Self-Help Groups or for micro credit, payment for spectrum allocation, repayment of rupee loan availed from domestic banks, etc. should be repatriated immediately for credit to their Rupee accounts with AD Category-I banks in India. ECB borrowers are also allowed to park ECB proceeds in term deposits with AD Category- I banks in India for a maximum period of six months pending utilization subject to conditions. The rupee funds, however, will not be permitted to be used for investment in capital markets, real estate or for inter-corporate lending. The primary responsibility to ensure that the ECB proceeds meant for Rupee expenditure in India are repatriated to India is that of the borrower concerned and any contravention of the ECB guidelines will be viewed seriously and will invite penal action under the Foreign Exchange Manageme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of private placement, shall not exceed 2% of the issue size, etc. as required in terms of Notification FEMA No. 120/RB-2004 dated July 7, 2004. FCCBs are also subject to all the regulations which are applicable to ECBs. Redemption of FCCBs Keeping in view the need to provide a window to facilitate refinancing of FCCBs by the Indian companies which may be facing difficulty in meeting the redemption obligations, designated AD Category - I banks have been permitted to allow Indian companies to refinance the outstanding FCCBs, under the automatic route, subject to compliance with the terms and conditions set out hereunder: i. Fresh ECBs/ FCCBs shall be raised with the stipulated average maturity period and applicable all-in-cost being as per the extant ECB guidelines; ii. The amount of fresh ECB/FCCB shall not exceed the outstanding redemption value at maturity of the outstanding FCCBs; iii. The fresh ECB/FCCB shall not be raised six months prior to the maturity date of the outstanding FCCBs ; iv. The purpose of ECB/FCCB shall be clearly mentioned as Redemption of outstanding FCCBs in Form 83 at the time of obtaining Loan Regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btained. Entities not eligible to subscribe to FCEB: Entities prohibited to buy, sell or deal in securities by the SEBI will not be eligible to subscribe to FCEB. End-use of FCEB proceeds: Issuing Company: (i) The proceeds of FCEB may be invested by the issuing company overseas by way of direct investment including in Joint Ventures or Wholly Owned Subsidiaries abroad, subject to the existing guidelines on overseas investment in Joint Ventures / Wholly Owned Subsidiaries. (ii) The proceeds of FCEB may be invested by the issuing company in the promoter group companies. Promoter Group Companies: Promoter group companies receiving investments out of the FCEB proceeds may utilize the amount in accordance with end-uses prescribed under the ECB policy. End-uses not permitted: The promoter group company receiving such investments will not be permitted to utilise the proceeds for investments in the capital market or in real estate in India. All-in-cost: The rate of interest payable on FCEB and the issue expenses incurred in foreign currency shall be within the all-in-cost ceiling as specified by Reserve Bank under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vative contracts), there is no transaction involving foreign exchange until the guarantee is invoked and the non-resident guarantor is required to meet the liability under the guarantee. The non-resident guarantor may discharge the liability by i) payment out of rupee balances held in India or ii) by remitting the funds to India or iii) by debit to his FCNR(B)/NRE account maintained with an AD bank in India. In such cases, the non-resident guarantor may enforce his claim against the resident borrower to recover the amount and on recovery he may seek repatriation of the amount if the liability is discharged either by inward remittance or by debit to FCNR(B)/NRE account. However, in case the liability is discharged by payment out of Rupee balances, the amount recovered can be credited to the NRO account of the non-resident guarantor. The Reserve Bank vide its Notification No. FEMA.29/ RB-2000 dated September 26, 2000 has granted general permission to a resident, being a principal debtor to make payment to a person resident outside India, who has met the liability under a guarantee. Accordingly, in cases where the liability is met by the non-resident out of funds remitted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rency, the IFC should hedge the entire foreign currency exposure; and viii) The reporting arrangements as applicable to the ECBs would be applicable to the novated loans. V. TAKE-OUT FINANCE Keeping in view the special funding needs of the infrastructure sector, a scheme of take-out finance has been put in place. Accordingly, take-out financing arrangement through ECB, under the approval route, has been permitted for refinancing of Rupee loans availed of from the domestic banks by eligible borrowers in the sea port and airport, roads including bridges and power sectors for the development of new projects, subject to the following conditions: i. The corporate developing the infrastructure project should have a tripartite agreement with domestic banks and overseas recognized lenders for either a conditional or unconditional take-out of the loan within three years of the scheduled Commercial Operation Date (COD). The scheduled date of occurrence of the take-out should be clearly mentioned in the agreement. ii. The loan should have a minimum average maturity period of seven years. iii. The domestic bank financing the infrastructure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, lump sum fees/royalties, etc. are permitted to be converted to equity shares or other securities to be issued to a non-resident subject to the conditions stipulated under the respective Regulations. (ii) Conversion of ECB may be reported to the Reserve Bank as follows: a. Borrowers are required to report full conversion of outstanding ECB into equity in the form FC-GPR to the Regional Office concerned of the Reserve Bank as well as in form ECB-2 submitted to the DSIM, RBI within seven working days from the close of month to which it relates. The words ECB wholly converted to equity should be clearly indicated on top of the ECB-2 form. Once reported, filing of ECB-2 in the subsequent months is not necessary. b. In case of partial conversion of outstanding ECB into equity, borrowers are required to report the converted portion in form FC-GPR to the Regional Office concerned as well as in form ECB-2 clearly differentiating the converted portion from the unconverted portion. The words ECB partially converted to equity should be indicated on top of the ECB-2 form. In subsequent months, the outstanding portion of ECB should be reported in ECB-2 form to D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), Reserve Bank of India, Bandra-Kurla Complex, Mumbai 400 051(Note: copies of loan agreement and offer documents for FCCB are not required to be submitted with Form 83). c. The borrower can draw-down the loan only after obtaining the LRN from DSIM, Reserve Bank. d. Borrowers are required to submit ECB-2 Return certified by the designated AD bank on monthly basis so as to reach DSIM, Reserve Bank within seven working days from the close of month to which it relates. [Note: All previous returns relating to ECB viz. ECB 3 ECB 6 have been discontinued with effect from January 31, 2004]. ii) Dissemination of Information For providing greater transparency, information with regard to the name of the borrower, amount, purpose and maturity of ECB under both Automatic and Approval routes are put on the Reserve Bank s website, on a monthly basis, with a lag of one month to which it relates. XI. RATIONALIZATION OF PROCEDURES - DELEGATION OF POWERS TO AUTHORISED DEALERS (AD) The powers have been delegated to the designated AD Category-I banks to approve the following requests from the borrowers for ECBs raised under the automat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (h) Cancellation of LRN The designated AD Category-I bank may directly approach DSIM for cancellation of LRN for ECBs availed, subject to ensuring that no draw down for the said LRN has taken place and the monthly ECB-2 returns till date in respect of the LRN have been submitted to DSIM. (i) Change in the end-use of ECB proceeds The designated AD Category-I bank may approve requests from ECB borrowers for change in end-use in respect of ECBs availed under the automatic route, subject to ensuring that the proposed end-use is permissible under the automatic route as per the extant ECB guidelines, there is no change in the other terms and conditions of the ECB, and the monthly ECB-2 returns till date in respect of the LRN have been submitted to DSIM. However, change in the end-use of ECBs availed under the approval route will continue to be referred to the Foreign Exchange Department, Central Office, Reserve Bank of India, as hitherto. (j) Reduction in amount of ECB Designated AD Category I banks may approve reduction in the amount of ECB (irrespective of the number of occasions) with or without any changes in draw-down and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DE CREDITS FOR IMPORTS INTO INDIA Trade Credits (TC) refer to credits extended for imports, permissible under the extant Foreign Trade Policy, directly by the overseas supplier, bank and financial institution for maturity up to five years. Depending on the source of finance, such trade credits include suppliers credit or buyers credit. Suppliers credit relates to credit for imports into India extended by the overseas supplier, while buyers credit refers to loans for payment of imports into India arranged by the importer from a bank or financial institution outside India. a) Amount and Maturity Trade credit period for import of non-capital goods can be upto one year from the date of shipment or upto the operating cycle whichever is lower Trade credit period for import of capital goods can be upto five years from the date of shipment with abinitio contract period of 6(six) months. No roll-over / extension can be permitted by the AD Category - I bank beyond the permissible period. AD Category - I banks can permit trade credit upto USD 20 million equivalent per import transaction. Subject to above condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th floor, Fort, Mumbai 400 001 (and in MS-Excel file through email) so as to reach not later than 10th of the following month. Each trade credit may be given a unique identification number by the AD bank. AD banks are required to furnish data on issuance of LCs / Guarantees / LoU / LoC by all its branches, in a consolidated statement, at quarterly intervals (format in Annex V) to the Principal Chief General Manager, Foreign Exchange Department, ECB Division, Reserve Bank of India, Central Office Building, 11th floor, Fort, Mumbai 400 001 (and in MS-Excel file through email) from December 2004 onwards so as to reach the Department not later than 10th of the following month. Appendix List of Notifications/ A.P. (DIR Series) Circulars consolidated in the Master Circular on External Commercial Borrowings and Trade Credits Sl. No. Notification / Circular Date Amendment to FEMA 3/2000 RB dated May 3, 2000 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... September 26, 2013 Amendment to FEMA 8/2000 RB dated May 3, 2000 1 FEMA.206/2012-RB June 01, 2010 2 FEMA.251/2012-RB December 06, 2012 A.P.(DIR Series) Circulars 1 A.P.(DIR Series) Circular No.41 April 29, 2002 2 A.P.(DIR Series) Circular No.29 October 18, 2003 3 A.P.(DIR Series) Circular No.60 January 31, 2004 4 A.P.(DIR Series) Circular No.75 February 23, 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 A.P.(DIR Series) Circular No.42 May 28, 2008 20 A.P.(DIR Series) Circular No.43 May 29, 2008 21 A.P.(DIR Series) Circular No.46 June 2, 2008 22 A.P.(DIR Series) Circular No.1 July 11, 2008 23 A.P.(DIR Series) Circular No.16 September 22, 2008 24 A.P.(DIR Series) Circular No.17 September 23, 2008 25 A.P.(DIR Series) Circular No.20 October 8, 2008 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.P.(DIR Series) Circular No.44 March 29, 2010 41 A.P.(DIR Series) Circular No.51 May 12, 2010 42 A.P.(DIR Series) Circular No.04 July 22, 2010 43 A.P.(DIR Series) Circular No.08 August 12, 2010 44 A.P.(DIR Series) Circular No.01 July 04, 2011 45 A.P.(DIR Series) Circular No.11 September 07, 2011 46 A.P.(DIR Series) Circular No.25 September 23, 2011 47 A.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.P.(DIR Series) Circular No.99 March 30, 2012 62 A.P.(DIR Series) Circular No.100 March 30, 2012 63 A.P.(DIR Series) Circular No.111 April 20, 2012 64 A.P.(DIR Series) Circular No.112 April 20, 2012 65 A.P.(DIR Series) Circular No.113 April 24, 2012 66 A.P.(DIR Series) Circular No.119 May 07, 2012 67 A.P.(DIR Series) Circular No.134 June 25, 2012 68 A.P.(DIR Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s) Circular No.63 December 20, 2012 83 A.P.(DIR Series) Circular No.69 January 7, 2013 84 A.P.(DIR Series) Circular No.78 January 21, 2013 85 A.P.(DIR Series) Circular No.87 March 5, 2013 86 A.P.(DIR Series) Circular No.98 April 9, 2013 87 A.P.(DIR Series) Circular No.113 June 24, 2013 88 A.P.(DIR Series) Circular No.114 June 25, 2013 89 A.P.(DIR Series) Circular N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... September 30, 2013 104 A.P.(DIR Series) Circular No.58 September 30, 2013 105 A.P.(DIR Series) Circular No.59 September 30, 2013 106 A.P.(DIR Series) Circular No.78 December 03, 2013 107 A.P.(DIR Series) Circular No.85 January 06, 2014 108 A.P.(DIR Series) Circular No.94 January 16, 2014 109 A.P.(DIR Series) Circular No.105 February 17, 2014 110 A.P.(DIR Series) Circular No.113 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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