June 19, 2017
FEMA : Issuance of Rupee denominated bonds overseas
RBI has, vide the attached circular, stated that any proposal of borrowing by eligible Indian entities by issuance of Rupee denominated bonds overseas (Masala Bonds) will now be examined at the FED, Central Office, Mumbai.
Further, the provisions in respect of maturity period, all-in-cost ceiling and recognized lenders (investors) of Masala Bonds have been revised as under:
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Maturity period: Minimum original maturity period for Masala Bonds raised upto USD 50 million equivalent in INR per financial year should be 3 years and for bonds raised above USD 50 million equivalent in INR per financial year should be 5 years.
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All-in-cost ceiling: The all-in-cost ceiling for such bonds will be 300 basis points over the prevailing yield of the Government of India securities of corresponding maturity.
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Recognised investors: Entities permitted as investors under the provisions of paragraph 3.3.3 of the Master Direction but should not be related party within the meaning as given in Ind-AS 24.
The aforesaid changes have also been made in the ECB Master Direction, as available on RBI's website.
For any details and clarifications, please feel free to write to:
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