manpreet.kaur (Student) (184 Points)
17 October 2012A company wants to issue debentures abroad for the purpose of repayment of its rupee loan taken in India(which comes under ecb only)... whether ecb guidelines r applicable or fccb guidelines as given in ecb guidelines only...????
Dear Manpreet,
As per RBI/2012-13/15 Master Circular No.15/2012-13 dated July 2, 2012 Section I, Point 4(iii) :
“As far as debentures are concerned, only those which are fully and mandatorily convertible into equity, within a specified time would be reckoned as part of equity under the FDI Policy.”
Non convertible debentures would be reckoned as a debt and ECB Guidelines will apply.
Finally, for conditions for repayment of Rupee loan by means of ECB, please refer RBI circular : RBI/2012-13/200 A.P. (DIR Series) Circular No. 26 dated September 11, 2012.
Regards,
Veeral
CAclubindia
