Unsecured loan

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Preeti Sanghi (Querist)
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08 May 2008 Can an indian Pvt. limited JV company raise unsecured loan from his promoter foreign company, if yes whats the limit and what is the procedure to obtain unsecured loan.

Regards

Preeti

R.V.RAO

R.V.RAO (Expert)
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09 May 2008 yes unsecured loans FROM PROMOTER FOREIGN CO. CAN BE OBTAINED AS THERE IS A GENERAL PERMISSION OF RBI AS CAN BE SEEN FROM FOLLOWING RBI CIRCULAR.
AS FOR LIMITS THERE IS NONE STATED THEREIN.
AS FOR PROCEDURE,YOU NEED TO APPROACH YOUR AUTHORISED DEALER(BANK)..

General permission has been granted for conversion of ECB into equity, subject to certain conditions and reporting requirements. The conversion facility is available for ECBs availed either with general permission or specific permission of Reserve Bank. This would also be applicable to ECBs irrespective of whether due for payment or not, as well as secured / unsecured loans availed from non-resident collaborators. However, import payables, deemed as ECBs would not be eligible for conversion.

SOURCE:
RBI/2006 - 07/20
Master Circular No. / 02 /2006-07 July 1, 2006
Master Circular on Foreign Investments in India

R.V.RAO

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