**Summary:**
This circular, issued by the Reserve Bank of India (RBI) on July 7, 2022 (A. P. DIR Series Circular No. 08), addresses overseas foreign currency borrowings of Authorised Dealer Category-I (AD Cat-I) banks. It references the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, and the Master Direction - Risk Management and Inter-Bank Dealings dated July 5, 2016.
The circular permits AD Cat-I banks to utilize funds raised from overseas foreign currency borrowings between July 8, 2022, and October 31, 2022, for lending in foreign currency to constituents in India. This provision aligns with paragraph Part C.5(a) of the Master Direction - Risk Management and Inter-Bank Dealings. Such lending is subject to end-use prescriptions applicable to External Commercial Borrowings (ECBs) as outlined in paragraph 2.1(viii) of the Master Direction - External Commercial Borrowings, Trade Credits and Structured Obligations dated March 26, 2019. The facility remains available until the maturity/repayment of the overseas foreign currency borrowings.
The directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).
For further information, contact Dimple Bhandia, Chief General Manager, Financial Markets Regulation Department, Central Office, Reserve Bank of India, 9th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai – 400 001. Tel: 91-22-2260 1000, Fax: 91-22-22702290, Email: cgmfmrdrbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and managing the country's currency.
Authorised Dealer Category-I Banks: Banks authorized by the Reserve Bank of India to deal in foreign exchange.
Foreign Exchange Management Act, 1999: An Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Foreign Exchange Management Borrowing and Lending Regulations, 2018: Regulations issued by the Reserve Bank of India governing borrowing and lending in foreign exchange.
Master Direction Risk Management and Inter-Bank Dealings: A comprehensive set of guidelines issued by the Reserve Bank of India for managing risks and conducting inter-bank dealings.
External Commercial Borrowings: Commercial loans raised by eligible resident entities from recognized non-resident lenders.
Master Direction External Commercial Borrowings, Trade Credits and Structured Obligations: A comprehensive set of guidelines issued by the Reserve Bank of India for External Commercial Borrowings, Trade Credits and Structured Obligations
Mumbai, Maharashtra: A city in Maharashtra where the Financial Markets Regulation Department, Central Office of Reserve Bank of India is located.
भारतीय �रज़व र् ब�क
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2022-23/88
A. P. (DIR Series) Circular No. 08 July 07, 2022
All Authorised Dealer Category-I Banks
Madam/Sir,
Overseas foreign currency borrowings of Authorised Dealer Category-I banks
Attention of Authorised Dealer Category-I (AD Cat-I) banks is invited to the Foreign
Exchange Management (Borrowing and Lending) Regulations, 2018 [Notification no.
FEMA 3(R)/2018-RB dated December 17, 2018] and Master Direction - Risk
Management and Inter-Bank Dealings dated July 05, 2016, as amended from time to
time.
2. As announced in paragraph 4 of the press release on “Liberalisation of Forex Flows”
dated July 06, 2022, AD Cat-I banks can utilise the funds raised from overseas foreign
currency borrowings between July 08, 2022 and October 31, 2022 (both dates included)
in terms of paragraph Part-C(5)(a) of the Master Direction - Risk Management and Inter-
Bank Dealings dated July 05, 2016, as amended from time to time, for lending in foreign
currency to constituents in India. Such lending shall be subject to the end-use
prescriptions as applicable to External Commercial Borrowings (ECBs) in terms of
paragraph 2.1(viii) of the Master Direction - External Commercial Borrowings, Trade
Credits and Structured Obligations dated March 26, 2019, as amended from time to time.
This facility will be available till the maturity / repayment of the overseas foreign currency
borrowings.
3. The directions contained in this circular have been issued under Sections 10(4) and
11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
िव�ीय बाज़ार िविनयमन िवभाग, क��ीय कायार्लय, 9वी मंिजल, केन्�ीय कायार्लय भवन, शहीद भगत �संह मागर्, फोटर्, मुंबई – 400 001
फोन: (91-22) 2260 1000, फैक्स: (91-22) 22702290, ई-मेल: cgmfmrd@rbi.org.in
Financial Markets Regulation Department, Central Office, 9th Floor, Central Office Building,
Shahid Bhagat Singh Road, Fort, Mumbai – 400 001
Tel: (91-22) 2260 1000, Fax: (91-22) 22702290, E-mail: cgmfmrd@rbi.org.in
िहन्दी आसान ह,ै इसका �योग बढ़ाइए