Ozg Corporate Funding Consultant
Ozg Center, New Delhi & Mumbai
Website: http://fundraising.ozg.in
To book an appointment with Ozg Fundraising Consultants, please go to: ozgcenter.com/appointment
Phone # +91 (0) 88-007-25647
To book an appointment with Ozg Fundraising Consultants, please go to: ozgcenter.com/appointment
Email: funding.consultant@ozg.co.in
RBI/2012-13/284
A.P. (DIR Series) Circular No.
48
November 6, 2012
To
All Category - I Authorised
Dealer Banks
Madam / Sir,
External Commercial Borrowings
(ECB) Policy – ECB by Small Industries Development Bank of India (SIDBI)
Attention of Authorized Dealer
Category-I (AD Category-I) banks is invited to the Foreign Exchange Management
(Borrowing or Lending in Foreign Exchange) Regulations, 2000, notified vide
Notification No. FEMA 3/2000-RB dated May 3, 2000, amended from time to time
and A.P. (DIR Series) Circular No. 5 dated August 1, 2005 relating to the
External Commercial Borrowings (ECB).
2. On a review of the extant
ECB policy, it has been decided to include SIDBI as an eligible borrower for
availing of ECB for on-lending to MSME sector, as defined under the Micro,
Small and Medium Enterprises Development (MSMED) Act, 2006, subject to the following
terms and conditions:-
(a) such on-lending by SIDBI
shall be to the borrowers’ directly either in INR or in foreign currency (FCY);
the foreign currency risk shall be hedged
by SIDBI in full in case of on-lending to MSME sector in INR; and
on-lending in foreign currency shall be
subject to Regulation 5(5) of FEMA Notification No. 3/2000-RB dated May 03,
2000, as amended from time to time and shall only be to those beneficiaries
which have natural hedge by way of foreign exchange earnings;
(b) availment of ECBs,
including the outstanding ECBs, up to 50 per cent of their owned funds, for
on-lending to MSME sector, will be under the automatic route and beyond 50 per
cent of owned funds, will be under the approval route, subject to a ceiling of
USD 500 million per financial year; and
(c) the proceeds of ECB
availed by SIDBI, shall be used for on-lending to MSME sector only for the
permissible end-uses as provided under the extant ECB policy.
3. All other conditions of
ECB, such as recognized lender, all- in-cost, average maturity, prepayment,
refinancing of existing ECB and reporting arrangements shall remain unchanged.
4. The amended ECB policy
shall come into force with immediate effect and is subject to review based on
the experience gained in this regard.
5. AD Category-I banks may
bring the contents of this circular to the notice of their constituents and
customers concerned.
6. The directions contained in
this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange
Management Act, 1999 (42 of 1999) and are without prejudice to permissions /
approvals, if any, required under any other law.
Yours faithfully,
(Rashmi Fauzdar)
Chief General Manager
Ozg Corporate Funding Consultant
Ozg Center, New Delhi & Mumbai
Website: http://fundraising.ozg.in
To book an appointment with Ozg Fundraising Consultants, please go to: ozgcenter.com/appointment
Phone # +91 (0) 88-007-25647
To book an appointment with Ozg Fundraising Consultants, please go to: ozgcenter.com/appointment
Email: funding.consultant@ozg.co.in
