Hitherto, companies that are under
investigation by law enforcement agencies such as the Directorate of
Enforcement are not entitled to taken on external commercial borrowings (ECBs)
under the automatic route, and are required to approach the Reserve Bank of
India (RBI) for approval.
investigation by law enforcement agencies such as the Directorate of
Enforcement are not entitled to taken on external commercial borrowings (ECBs)
under the automatic route, and are required to approach the Reserve Bank of
India (RBI) for approval.
Through a recent circular,
the RBI has relaxed such position. Now, such entities under investigation are
eligible to avail of ECBs under the automatic route. Where the pendency of
investigation is disclosed by the borrowing entity, the authorized dealers approving
the proposal must highlight this fact to the RBI.
the RBI has relaxed such position. Now, such entities under investigation are
eligible to avail of ECBs under the automatic route. Where the pendency of
investigation is disclosed by the borrowing entity, the authorized dealers approving
the proposal must highlight this fact to the RBI.
This liberal approach reinforces the
well-known principle of presumption of innocence.
well-known principle of presumption of innocence.
