A company wants to issue debentures abroad for the purpose of repayment of its rupee loan taken in India(which comes under ecb only)... whether ecb guidelines r applicable or fccb guidelines as given in ecb guidelines only...????
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Does it come under (ecb)external commercial borrowings????
Replies (1)
Dear Manpreet,
As per RBI/2012-13/15 Master Circular No.15/2012-13 dated July 2, 2012 Section I, Point 4(iii) :
“As far as debentures are concerned, only those which are fully and mandatorily convertible into equity, within a specified time would be reckoned as part of equity under the FDI Policy.”
Non convertible debentures would be reckoned as a debt and ECB Guidelines will apply.
Finally, for conditions for repayment of Rupee loan by means of ECB, please refer RBI circular : RBI/2012-13/200 A.P. (DIR Series) Circular No. 26 dated September 11, 2012.
Regards,
Veeral
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