While most attention was shifted over the last few days towards the developments in Satyam, there have been some policy announcements further liberalising the external commercial borrowings (ECBs) that merit consideration. On January 2, 2009, the Reserve Bank of India (RBI) announced policy changes to the ECB policy as follows: – all-in cost ceilings for both automatic and approval routes...
FCEB Scheme Operationalised
In February this year, the Government (Ministry of Finance) had issued a notification introducing Foreign Currency Exchange Bonds (FCEBs) that offered Indian companies an additional avenue to raise finances from overseas. We had discussed the implications of FCEBs in a post at that time. Now, the RBI has issued a circular operationalising the scheme paving the way for issuance of FCEBs. One issue...
Liberalisation of ECB in Infrastructure Sector
RBI has allowed infrastructure companies to raise external commercial borrowings (ECB) under the automatic route up to a maximum of US$ 500 million (compared to the erstwhile limit of US$ 100 million).
The RBI notification is available here.
The Impact of Status Quo on Participatory Notes
Last week, there was expectation that SEBI would make some announcements regarding issuance of participatory notes (P-notes) by foreign institutional investors, particularly that curbs on P-notes will be removed. However, no decision was taken by SEBI and it was decided to defer the matter. In an editorial, the Financial Express comes out very strongly in favour of removal of all restrictions...
Reverse Burden upon Exporters under FERA
(The following post has been contributed by Venugopal Mahapatra and Gautam Bhatia) A recent judgment of the Supreme Court addressed a few important questions with regard to the imposition of reverse burden under the Foreign Exchange Regulation Act (FERA). In the case of Seema Silk and Sarees and Anr. v. Directorate of Enforcement and Ors., decided in June 2008, the constitutional validity of...
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