External Commercial Borrowings, Trade Credits and
Author : lois-ondreau | Published Date : 2025-06-23
Description: External Commercial Borrowings Trade Credits and Structured Obligations CA Santhosha Kumar Partner Ms SBA Associates Bangalore Master Direction and Framework FED Master Direction No 520182019 Dated March 262019 supersedes FED Master
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Transcript:External Commercial Borrowings, Trade Credits and:
External Commercial Borrowings, Trade Credits and Structured Obligations CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore Master Direction and Framework FED Master Direction No 5/2018-2019 Dated March 26,2019 supersedes FED Master Direction No. 5/2015-2016 dated Jan 1, 2016 New Master Direction only covers: Part I External Commercial Borrowings Framework Part II Trade Credits Framework Part III Structured obligations Borrowing and Lending in Foreign currency by AD and other than AD are covered in FEM(Borrowing and Lending) Regulations 2018 dated 17th Dec 2018. CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore Regulations RBI Master Direction -No. 5/2018-19 dated 26th March 2019 (updated with Notifications AP DIR Circulars from time to time – updated as on 08th August,2019) FAQs issued by RBI (updated as on 29 May 2019) Foreign Exchange Management ( Borrowing or Lending in Foreign Exchange) Regulations, 2018, notified vide Notification No. FEMA 3R/2018-RB dated December 17,2018 Foreign Exchange Management ( Guarantees) Regulations, 2000, notified vide Notification No. FEMA 8/2000-RB dated May 3,2000 CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore Part I - External Commercial Borrowings CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore Part I-External Commercial Borrowings ECBs are commercial loans, raised by eligible resident entities from recognised non-resident entities should confirm to minimum maturity, end-use, all-in-cost ceiling in totality and not stand alone basis. Important terms used: All in Cost Approval Route/Approval Route Authorized Dealer Benchmark Rate Designated AD Category I Bank ECB Liability-Equity Ratio FATF Compliant Country Foreign Equity Holder Person Resident in India Foreign Currency Convertible Bonds (FCCBs) Foreign Currency Exchangeable Bonds (FCEBs) IOSCO Compliant Country Infrastructure Sector and Infrastructure Space Companies Real Estate Activities Special Economic Zone & Free Trade Warehousing Zone CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore Framework of ECB CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore Framework of ECB CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore Framework of ECB CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore ECB –Minimum Average Maturity Period Calculation of Average Maturity-An Illustration ABC Ltd. Loan Amount = USD 2 million Average Maturity= 3.2851 **Calculated by = DAYS360 (firstdate, seconddate, 360) CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore Limit, ECB Ratio and Parking of ECB CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore Guarantees, FCCBs and FCEBs by Indian Banks, Indian financial institutions and NBFCs not Permitted CA. Santhosha Kumar, Partner M/s SBA Associates, Bangalore Procedure and Reporting of ECB CA. Santhosha Kumar,
