Fema query - external commercial borrowing

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Pathik (Querist)

04 January 2012 Indian company wants take External Commercial borrowing (ECB) from foreign share holder who has equity of 50% in Indian company. Is there any requirement under Foreign exchange management act to inform to RBI about equity holding of lender in borrower company and get UIN from RBI for the same? Or Indian company should submit directly ECB form with RBI?

Vishal D Shah

Vishal D Shah (Expert)

05 January 2012 Of course there are stringent requirements for ecb. Refer master circular on ecb.

Filing shall be through authorised dealer bank.

Cavishalshah@gmail.com

Pathik

Pathik (Querist)

05 January 2012 Vishal,

If you have filed such document with RBI about equity holding of lender in borrower company then within how many days you have received reply from RBI?

Master circular does not state any such procedure. I would appreciate if you provide under which regulation such documents to be filed?

Thanks for your earlier promt reply.

Vishal D Shah

Vishal D Shah (Expert)

05 January 2012 Pathik, your first question seems for FDI. Pl clarify if otherwise.
Generally you get UIN in 15 days.

AS mentioned you need to submit Form ECB to AD bank along with necessary documents.

What kind of procedural hiccups are u facing?

Pathik

Pathik (Querist)

05 January 2012 Vishal,

My first quetion is on ECB only and not for FDI. RBI is asking to submit such document (about equity holding of lender in borrower company taken on record by RBI) from Indian company before filling ECB form. Hence, I am stuck up in filing ECB form.

Vishal D Shah

Vishal D Shah (Expert)

05 January 2012 OK, In case there is specific demand of RBI then you may reply to that on letterhead of the company. You need not wait for RBI reply as such.

Separately you may fill in Form ECB too.

cavishalshah@gmail.com
09920917939

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