(The importance of FDI is explained in this article in questions and answers format. The questions are like What way FDI is useful to domestic economy?, Why overseas entities invest in other countries?, Why India attracts FDI?, Why shop-keepers, businessmen and some political parties in India oppose FDI?, Is there any restriction for FDI?, What…
The Clearing Corporation of India Limited (CCIL) is now designated as ‘Trade Repository’ for the OTC interest rate and Foreign Exchange Contract. The designated trade repository will be regulated and supervised under section 34(2) of the Payment and Settlement Systems Act, 2007 (PSS Act). Being a Financial Market Infrastructure (FMI), the repository would function under…
(This post covers latest updates and amendments to earlier policies envisaged in Foreign Trade Policies 2015-2020 in respect of status holders.) The status- holder position allotted to the exporters of goods and services depending upon certain level of export performance achieved by them. The exporters of goods/service who hold valid importer-exporter code no. (IEC) may…
Henceforth the customers of banks may submit Form A2 through online. RBI in its communiqué to Foreign Exchange Dealers (February 11, 2016) who offer internet banking facility to their customers informed that the Authorised Dealers (ADs) may allow online submission of Form A2. Further they may also enable uploading/submission documents if required for establishing the…
The Central Bank (RBI in India) sometimes intervenes in the volatile foreign exchange market in order to manage excessive volatility and to influence the value of a floating currency in an orderly condition. Such intervention of Central bank is called “Dirty Float”. The recent communication of the regulator informs that the bank would intervene in…
(Ex-Bond Bill of Entry/Courier Bill of entry are now considered as evidence of physical import) An importer in India has to submit one of the following records as proof of physical import of goods Exchange Control copy of the Bill of Entry for domestic consumption or Exchange Control copy of the Bill of Entry for warehousing…
The salient features of the framework for Rupee denominated bonds overseas under External Commercial Borrowing policy are as follows. Eligibility to borrow: All corporate or corporate body, Real Estate Investment Trust (REIT) and Infrastructure Investment Trusts (REITs) are eligible to borrow under ECB policy. Investors in bonds: Any investor from a Financial Action Task Force…
In simple terms, External Commercial Borrowings (ECB) means commercial borrowings availed (in the form of bank loans, trade credits, securitized instruments) from external source (from abroad) with a minimum average maturity of three years. The borrowings under ECB takes place in two channels namely automatic route and approved routes. The eligible borrowers like Corporate Importers,…
The Reserve Bank of India has relaxed rules for rescheduling/restructuring of ECBs by permitting an increase in the total cost of borrowing offshore. In suppression of earlier provisions, this year the banking regulator has delegated powers to the designated AD category-I banks to allow changes/modification in the draw-down and repayment schedules notwithstanding the average maturity period or…
The recognized overseas ECB lenders who are able to mobilise Indian Rupees may extend Rupee denominated loans to Indian companies. The lenders may enter into back-to-back swap transaction with AD-Category-1 banks to facilitate Rupee denominated lending. The recognized non-resident lender (financier from abroad) approaches his overseas bank with a request for a swap rate for…