ANNOUNCEMENT 10 Sep 2013In September 2013, the government of India announced a rule change for international private debt transactions.
NUMBER OF INTERVENTIONS
RBI notification 10 September
25 September 2013
10 October 2013
On 10 Septemeber 2013, the Reserve Bank of India (RBI) issued a circular liberalising limits on foreign currency borrowings of Authorised Dealer Category - I (AD Category-I) banks from their Head Office, overseas branches and correspondents and overdrafts in Nostro accounts. The earlier limit of maximum 50 per cent of the unimpaired Tier I capital as at the close of the previous quarter or USD 10 million (or its equivalent), whichever is higher has been raised to maximum 100 percent of the unimpaired Tier I capital or USD 10 million, whichever is higher.
AD Category - I banks are branches of banks authorised to deal in foreign exchange business, and that maintain independent foreign currency accounts.
On 25 September 2013, the RBI issued a notification clarifying that any foreign currency borrowing made on or before 30 November 2013 could have a minimum maturity of one year, whereas any borrowing after this date has to have a minimum maturity of three years.
Further on 10 October 2013, the RBI allowed AD Category-I banks to borrow from international/multilateral financial institutions and not just their Head Offices up to 30 November 2013.