A. P. (DIR Series) Circular No.47
All Authorised Dealer Category –
of Rupee denominated bonds overseas
Attention of Authorized Dealer
Category - I (AD Category - I) banks is invited to Sr. No. 3, 4 and 5 of
Annex to A.P.(DIR Series) Circular No.17 dated September 29, 2015,
paragraph No. 2, 3, 4 and 5 of A.P. (DIR Series) Circular No. 60 dated
April 13, 2016, paragraph No. 2 of A.P. (DIR Series) Circular No. 31
dated February 16, 2017 and paragraph No. 3.2, 3.3.1, 3.3.3 and 3.3.4 of
Master Direction No.5 dated January 1, 2016 on ‘External Commercial
Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by
Authorised Dealers and Persons other than Authorised Dealers’ (Master
Direction), as amended from time to time, on the provisions of available
routes of borrowing, recognized lender and all-in-cost, etc. under the
framework for issuance of Rupee denominated bonds overseas.
2. On a review of the laid down framework
for issuance of Rupee denominated bonds overseas (Masala Bonds) and with a
view to harmonize the various elements of the ECB framework, it has been
decided that any proposal of borrowing by eligible Indian entities by
issuance of these bonds will be examined at the Foreign Exchange
Department, Central Office, Mumbai. Further, it has also been decided to
revise the provisions in respect of maturity period, all-in-cost ceiling
and recognized lenders (investors) of Masala Bonds as under:
period: Minimum original maturity
period for Masala Bonds raised upto USD 50 million equivalent in INR per
financial year should be 3 years and for bonds raised above USD 50 million
equivalent in INR per financial year should be 5 years.
ceiling: The all-in-cost ceiling
for such bonds will be 300 basis points over the prevailing yield of the
Government of India securities of corresponding maturity.
investors: Entities permitted as
investors under the provisions of paragraph 3.3.3 of the Master Direction
but should not be related party within the meaning as given in Ind-AS 24.
3. All other provisions of
aforesaid circulars dated September 29, 2015, April 13, 2016 and February 16, 2017 remain unchanged. AD
Category-I banks may bring the contents of this circular to the notice of
their constituents and customers.
4. The changes / revised
instructions in respect of issuance of Rupee denominated bonds will be
applicable from the date of issuance of this circular.
5. Relevant paragraphs of the Master
Directions No. 5 dated January 01, 2016 issued by RBI are being
updated to reflect the changes.
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.
Chief General Manager