Manoj Agarwal (Chief Manager) (29 Points)
20 June 2011We have been sanctioned ECB for our upcoming steel projects, since there was a delay for the debt finance, promoters have bought the intial capital expenditue more than there ratio, now we are going to draw down ECB, Whether ECB can be utilised for the payment of the excess contribution bought by the promoters? please specify with respect to ECB guidelines.
valji
(Accounts manager-MBA)
(2150 Points)
Replied 20 June 2011
ECB cannot use for the following purpose
END-USE REQUIREMENTS
.(A) External commercial loans are to be utilised for import of capital goods and services (on FOB or CIF basis) and for project reletated expenditure in all sectors subject to following conditions :
(a) ECB raised for project-related rupee expenditure must be brought into the country immediately.
(b) ECB raised for import of capital goods and services should be utilised at the earliest and corporates should strictly comply with RBI's extant guidelines on parking ECBs outside till actual imports. RBI would be monitoring ECB proceeds parked outside.
(c) ECB raised is not permitted for investment in stock market or in real estate.
C) Under no circumstances, ECB proceeds will be utilised for -
( i) Investment in stock market; and
(ii) Speculation in real estate.
GO TO RBI SITE READ ECB GUIDELINES
valji
(Accounts manager-MBA)
(2150 Points)
Replied 20 June 2011
Manoj Agarwal
(Chief Manager)
(29 Points)
Replied 20 June 2011
Dear Valji,
Thanks for reply. But it is stil not clear whether we can repay the additional amount brought in by promoters pending disbursement from Banks.Pl. give your comment as the same is not specifically given in Non-permitted list also. Pl. advice.
valji
(Accounts manager-MBA)
(2150 Points)
Replied 20 June 2011
ECB amt use only for the purpose buiness expansion & purchase of capital purpose only
no other purpose
you have to submit ECB return for what purpose money is utilised
you cannot pay director loan ,please check ECB checklist
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