I WISH TO KNOW RBI GUIDELINES ABOUT ISSUE OF FIREIGN CURRENCY BONDS BY INDIAN COMPANIES, FIRMS AND TRUSTS.CAN EDUCATIONAL TRUSTS RAISE MONEY BY ISSUING FOREIGN CURRENCY BONDS IN DOLLAR AND EURO.
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Wish to know RBI Guidelines For Foreign Currency Bonds Issue
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Did you mean FCCBs
Foreign Currency Convertible Bonds’(FCCB) means a bond issued by an Indian company expressed in foreign currency, the principal and interest of which is payable in foreign currency. FCCBs are issued in accordance with the Foreign Currency Convertible Bonds and ordinary shares (through depository receipt mechanism) Scheme 1993 and subscribed by a non-resident entity in foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole, or in part.
The inward remittance received by the Indian company vide issuance of DRs and FCCBs are treated as FDI and counted towards FDI.
An Indian Company, which is not eligible to raise funds from the Indian Capital market including a company which has been restrained from accessing the securities market by the SEBI will not be eligible to issue FCCBs and ordinary shares through GDRs;
FCCBs can be issued by Indian companies in the overseas market in accordance with Scheme for Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993.
The FCCB issue needs to conform to External Commercial Borrowing guidelines, issued by RBI vide Notification No. FEMA 3/2000-RB dated May 3, 2000 as amended from time to time.
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