Procedure to obtain foreign currency loans
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 November 2011
KIND ATTN. SIR
===============
KINLDY CLARIFY THE PROCEDURE TO OBTAIN FOREIGN CURRENCY LOANS BY AN EXPORTER AND WHO IS PACKING CREDIT LIMIT WITH CANARA BANK. WHETHER THE EXPORTER CAN AVAIL FOREIGN CURRENCY LOANS THROUGH CANARA BANK ITSELF.
KINDLY CLARIFY
WITH REGARDS
CA.P.SHANGAR
===============
KINLDY CLARIFY THE PROCEDURE TO OBTAIN FOREIGN CURRENCY LOANS BY AN EXPORTER AND WHO IS PACKING CREDIT LIMIT WITH CANARA BANK. WHETHER THE EXPORTER CAN AVAIL FOREIGN CURRENCY LOANS THROUGH CANARA BANK ITSELF.
KINDLY CLARIFY
WITH REGARDS
CA.P.SHANGAR
09 November 2011
Proposals for raising foreign currency loans/credits viz. Buyer's Credits, Supplier's Credits or lines of credits by firms/companies/lending institutions, banks, etc. for financing cost of
import of goods, technology or for any other purposes other than those considered by Reserve bank in terms of paragraph 7B.8 and 7B.8A should first be submitted to Government of India, Ministry of Finance (Department of Economic Affairs), ECB Division, New Delhi for necessary clearance. The proposals are considered by the Government on merits and in light of prevailing Government policy.
(ii)
In terms of Section 8(1) of FERA 1973 no person resident in India can borrow any
foreign exchange from any person resident in or outside India without prior permission of Reserve Bank. Similarly, Section 9(1) of the Act places certain restrictions on persons resident in India receiving payments from or making payments to persons resident outside India. Consequently, all loans or credits secured by persons resident in India from non-residents as also repayment of such loans/credits and payment of interest and other charges thereon, require prior permission of Reserve Bank.
NOTE:
The above procedure is also applicable for import of capital goods on financial
lease basis.
Procedure for Obtaining Reserve Bank Approval
7B.2
On receipt of letter indicating the terms and conditions regarding amount of loan/credit, rate of interest, period of repayment, etc. from the Ministry of Finance, the borrower firm/company
should make an application in form ECB1 to the concerned office of Reserve Bank within whose jurisdiction its Head/Registered Office is situated. On receipt of Reserve Bank approval, the borrower firm/company may conclude the loan/credit agreement with the overseas lender, taking care to ensure that no liability, direct or indirect, other than that specifically approved by Government/Reserve Bank is assumed by the borrower through the loan/credit agreement. The borrower should file the requisite number of copies of loan/credit agreement with Government. Government will take the agreement on record under advice to the borrower if it is found to be strictly in conformity with the approved terms. Thereafter, the borrower should apply to Reserve Bank along with two copies of the loan agreement for permission to effect drawal of the loan amount for utilisation towards approved purpose/s.
FOR MORE INFO:
http://www.rbi.org.in/scripts/ECMUserView.aspx?Id=32&CatID=10#partb
Proposals for raising foreign currency loans/credits viz. Buyer's Credits, Supplier's Credits or lines of credits by firms/companies/lending institutions, banks, etc. for financing cost of
import of goods, technology or for any other purposes other than those considered by Reserve bank in terms of paragraph 7B.8 and 7B.8A should first be submitted to Government of India, Ministry of Finance (Department of Economic Affairs), ECB Division, New Delhi for necessary clearance. The proposals are considered by the Government on merits and in light of prevailing Government policy.
(ii)
In terms of Section 8(1) of FERA 1973 no person resident in India can borrow any
foreign exchange from any person resident in or outside India without prior permission of Reserve Bank. Similarly, Section 9(1) of the Act places certain restrictions on persons resident in India receiving payments from or making payments to persons resident outside India. Consequently, all loans or credits secured by persons resident in India from non-residents as also repayment of such loans/credits and payment of interest and other charges thereon, require prior permission of Reserve Bank.
NOTE:
The above procedure is also applicable for import of capital goods on financial
lease basis.
Procedure for Obtaining Reserve Bank Approval
7B.2
On receipt of letter indicating the terms and conditions regarding amount of loan/credit, rate of interest, period of repayment, etc. from the Ministry of Finance, the borrower firm/company
should make an application in form ECB1 to the concerned office of Reserve Bank within whose jurisdiction its Head/Registered Office is situated. On receipt of Reserve Bank approval, the borrower firm/company may conclude the loan/credit agreement with the overseas lender, taking care to ensure that no liability, direct or indirect, other than that specifically approved by Government/Reserve Bank is assumed by the borrower through the loan/credit agreement. The borrower should file the requisite number of copies of loan/credit agreement with Government. Government will take the agreement on record under advice to the borrower if it is found to be strictly in conformity with the approved terms. Thereafter, the borrower should apply to Reserve Bank along with two copies of the loan agreement for permission to effect drawal of the loan amount for utilisation towards approved purpose/s.
FOR MORE INFO:
http://www.rbi.org.in/scripts/ECMUserView.aspx?Id=32&CatID=10#partb
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 November 2011
THANK YOU SIR FOR YOUR TIMELY INFORMATION.
WITH REGARDS
CA.P.SHANGAR
WITH REGARDS
CA.P.SHANGAR
09 November 2011
SIR,
THANKS FOR APPRECIATE AND PARTICIPATION IN CA CLUB INDIA
THANKS FOR APPRECIATE AND PARTICIPATION IN CA CLUB INDIA
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