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FEMA/FERA on External Commercial Borrowings

This query is : Resolved 
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12 September 2008 This is in regard to a public co in India not listed which is a 99 % subsidiary of a LLP in US, being held by director and some of his family members.
Goods are Purchased from a foreign country byt the indian subsidiary and payment is directly made by a director to the outside party.

This payment is treated as unsecured loans in the books.

For violating the FEMA rules, RBI imposes a fine and asks the co to comlpy with RBI interest rate guidelines and loan reg No.

Director has waived off interest completely on this loan, are there any RBI implications ?
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S.Srinivasaraghavan

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S.Srinivasaraghavan (Expert)
02 October 2008 Yes. Penalty for violating FEMA is still there.
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