Euro issue in_foreign_currency_with_authorised_ins

Euro Issue in foreign currency with authorized dealers/public financial institutions

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1). Remember that the issue proceeds of your company’s Euro Issue kept in foreign currency can be utilized for the following purposes:

(a) meeting the cost of expansion or diversification or acquisition or import of new plants and machinery;

(b) repayment of foreign currency loans;

(c) any other purpose approved by the Government.

Foreign currency euro issue with the authorised institution Foreign currency euro issue with the authorised institution



Foreign currency euro issue with the authorised institution Foreign currency euro issue with the authorised institution

Further remember that pending deployment of funds for the aforesaid purposes, your company is allowed to keep the currency funds abroad in deposits with or certificate of Deposits or other instruments of banks who have been rated not less than AA( -) by Standard and Poor or by Moody’s for short-term obligations, deposits to the branch outside India of an authorized dealer in India and in treasury bills and other monetary instruments with, maturity or unexpired maturity not exceeding one year.



NOTE THE FOLLOWINGNOTE THE FOLLOWING

The authorized dealers or public financial institutions will accept foreign currency deposits of your company’s Euro Issue subject to the conditions given below:

(a) Concerned authorized dealers/public financial institutions are not allowed to swap the currency for rupees but can use the amount for lending in foreign currency to eligible clients;



(b) The concerned authorized dealers/public financial institutions are eligible to charge interest not exceeding 2.5% over 6-months for lending out such funds.

(c) The authorized dealers can invest surplus currency out of the Euro Issue.

(d) The authorized dealers are required to maintain a cash reserve ratio or statutory liquidity reserve as laid down by RBI from time to time while dealing with such foreign currency deposits.




(e) The above conditions are in addition to the conditions as may be imposed by the Government of India in its approval letter for the Euro Issue.(g) retention of proceeds of GDRs or FCCBs abroad pending their utilization and

(f) Retention of proceeds of GDRs or FCCBs abroad pending their utilization and investing them, abroad for a period not exceeding 1 year also pending their utilization is a temporary facility allowed by RBI for parking of funds and this facility should not be used as an arena for investment by investing such funds beyond the period of 1 year without RBI’s approval.




Foreign Currency Deposits Foreign Currency Deposits

It will carry interest at a rate not exceeding LI-BOR for the respective period for which deposit is accepted.

FCDs are convertible into Indian Rupees only as and when expenditure for approved end-uses is incurred by the issuer company including up to a maximum of 15% of the proceeds earmarked for general corporate restructuring uses.




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Euro issue in_foreign_currency_with_authorised_ins