A public ltd. company is repaying its rupee loan by borrowing through external commercial borrowings.
so the company will borrow in dollars. the borrowing limit of the company as per the resolution passed under 293(1)(d) is rupees 50 crores. And company wants to borrow $2 million to repay the loan. whether any resolution is required in this case or old resolution is sufficient
Dear Manpreet there is end use restrictions for ECB one of which is it can not be utilized for repaying existing rupee loan. plz check following link...
This is written under ECB approval Route...
Repayment of Rupee loans and/or fresh Rupee capital expenditure for
companies with forex earnings
Indian companies in the manufacturing and infrastructure sector can avail of ECBs
for repayment of Rupee loans availed of for capital expenditure from the domestic
banking system which are still outstanding and/or fresh Rupee capital expenditure
provided they are consistent foreign exchange earners during the past three
financial years and not in the default list/caution list of the Reserve Bank of India.
The overall limit for such ECBs is USD 10 billion and the maximum permissible
ECB that can be availed of by an individual company will be limited to 50 per cent
of the average annual export earnings realized during the past three financial
years. The foreign exchange for repayment of ECB should not be accessed from
Indian markets and and the liability arising out of ECB should be extinguished only
out of the foreign exchange earnings of the borrowing company.
and m sorry.. that is the only link which isnt opening... So kindly search through google.. "REPAYMENT OF RUPEE LOAN"
See june as well as september directions by RBI
AND I JUST WANT TO KNOW THAT WHETHER THERE IS ANY SUCH THING WHICH REQUIRES THAT SINCE OUR RESOLUTION FOR THE BORROWING LIMIT IS IN INDIAN CURRENCY... AND WE WANT LOAN IN DOLLARS... BECAUSE OF THIS DO WE NEED TO PAAS A FRESH RESOLUTION TO CONVERT RUPEES INTO DOLLARS??? PLZ SUPPORT UR REPLY WITH A REASON....
what i think there is no requiremet for a separate resolution just keep in mind it should not go beyond limited as per 293 (1)(d) and is not out of the purview of ECB