RBI/2016-17/316 A. P. (DIR Series) Circular No.47 June 7, 2017 To All Authorised Dealer Category – I Banks Madam/Sir Issuance 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: -
Maturity 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. -
All-in-cost 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. -
Recognised 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. Yours faithfully (J K Pandey) Chief General Manager |