Revised Guidelines for fresh
sanctions/renewals
Banks may extend
facilities to the step-down subsidiaries of Indian companies, to finance
projects undertaken abroad.
The immediate
overseas subsidiary must be directly controlled by the Indian parent company
and must directly hold a minimum 51% of its shareholding.
All the
step-down subsidiaries, must be a wholly owned subsidiary or its entire shares
shall be jointly held by the immediate parent company and the Indian parent
company and / or its wholly owned subsidiary. The immediate parent should,
wholly or jointly with Indian parent company and / or its wholly owned
subsidiary, have control over the step-down subsidiary.
Banks shall make
additional provision of 2% (in addition to country risk provision) against
standard assets, to cover the additional risk.
Based on RBI
Circular dt 31/12/15. Please visit www.rbi.org.in for any
further clarification if required….. Poppy
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