RBI/2018-19/121
A.P. (DIR Series) Circular No. 18
February
07, 2019
To
All Category-I Authorised Dealer Banks
Madam / Sir,
External Commercial Borrowings
(ECB) Policy – ECB facility for Resolution Applicants under Corporate
Insolvency Resolution Process
Attention of Authorized Dealer
Category-I (AD Category-I) banks is invited to paragraph 1 of the Statement on Developmental and Regulatory Policies of
the Sixth Bi-monthly Monetary Policy
Statement for 2018-19 dated February 07, 2019.
2. In terms of paragraph
2.1.(viii) of the Annex to the A.P. (DIR
Series) Circular No. 17, dated January 16, 2019 on “External
Commercial Borrowings (ECB) Policy – New ECB Framework”, ECB proceeds
cannot be utilised for repayment of domestic Rupee loans, except when the
ECB is availed from a Foreign Equity Holder as defined in the aforesaid
framework.
3. On a review it has been
decided, in consultation with the Government of India, to relax the end-use
restrictions for resolution applicants under the Corporate Insolvency
Resolution Process (CIRP) and allow them to raise ECBs from the recognised
lenders, except the branches/ overseas subsidiaries of Indian banks, for
repayment of Rupee term loans of the target company under the approval
route. Accordingly the resolution applicants, who are otherwise eligible
borrowers, can forward such proposals to raise ECBs, through their AD bank,
to Foreign Exchange Department, Central Office, Mumbai of the Reserve Bank
for approval.
4. All other provisions of the
ECB policy remain unchanged. AD Category - I banks should bring the
contents of this circular to the notice of their constituents and
customers. The amended ECB policy will come into force with immediate
effect.
5. The directions contained in
this circular have been issued under section 10(4) and 11(2) of the Foreign
Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions / approvals, if any, required under any other law.
Yours
faithfully
Ajay
Kumar Misra
Chief General Manager-in-Charge
|