Issue
of Rupee denominated bonds
overseas will be within the aggregate limit of foreign investment in corporate debt,
which is capped at Rs.2443.23 billion as per the monetary policy.
The
maximum amount which can be borrowed by an entity in a financial year under the
automatic route by issue of these bonds will be Rs. 50 billion. Proposals to
borrow beyond this limit will require prior approval of the RBI.
The
Rupee denominated bonds can only be issued by the resident of a country:
•
that
is a member of FATF or a member of a FATF- Style Regional Body;
•
whose
securities market regulator is a signatory to the International Organization of
Securities Commission's (IOSCO’s) Multilateral Memorandum of Understanding or a
signatory to bilateral Memorandum of Understanding with the SEBI for
information sharing arrangements; and
•
should
not be a country identified in the public statement of the FATF as:
(i)
A
jurisdiction having a strategic AML or CFT deficiencies; or
(ii)
A
jurisdiction that has not made sufficient progress in addressing the
deficiencies.
The
minimum maturity period for Rupee denominated bonds issued overseas will be
three years.
Borrowers
issuing Rupee denominated bonds overseas should incorporate a clause in the offer
document so as to obtain the list of primary bond holders for providing it to
the regulatory authorities in India. The offer document should also state that
the bonds can only be sold / transferred / offered as security overseas,
subject to IOSCO / FATF requirements.
In order to capture inflows/ outflows on account of
the issue of these bonds, banks should report to RBI, the actual drawdown(s) /
repayment(s) by their constituent borrowers.
Based on RBI notification dated
13/4/2016. For further clarification, please refer www.rbi.org.in ………………Poppy Sharma
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