Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT Audit :: articles on VAT and GST in India :: TDS :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: Central Excise rule to resale the machines to a new company :: cpt :: empanelment :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: due date for vat payment :: TAX RATES - GOODS TAXABLE @ 4%
 
 
Latest Circulars »
 How to save maximum tax from Sec 80C deductions for FY2017-18
 Settlement of Agency transactions in certain cases (for Funds and Agency Commission) directly from Reserve Bank of India
 Change in name of “Sardar Bhiladwala Pardi People’s Co-operative Bank Ltd., Killa Pardi, Dist. Valsad (Gujarat)” to “SBPP Co-operative Bank Ltd., Killa Pardi, Dist. Valsad (Gujarat)” in the Second Schedule to the Reserve Bank of India Act, 1934
 Auction of Government of India Dated Securities December 5, 2017
 Auction for Sale (Re-issue) of Government Stock (GS) December 5, 2017
  5 Opening Manager Indirect Taxation
 RBI to conduct Overnight Variable rate Reverse Repo Auction under LAF on December 05, 2017
 15 NBFCs surrender their Certificate of Registration to RBI
  RBI-Auction of State Government Securities
 Reporting of Transactions by agency banks to RBI
 RBI seeks Comments/Feedback on Report of the Working Group on Hedging of Commodity Price Risk by Residents

RBI-Conversion of External Commercial Borrowing and Lumpsum Fee/Royalty into Equity
January, 20th 2014

RBI/2013-2014/449
A.P. (DIR Series) Circular No. 94

January 16, 2014

To

All Category - I Authorised Dealer banks

Madam/Sir,

Conversion of External Commercial Borrowing and Lumpsum Fee/Royalty into Equity

Attention of Authorised Dealer (AD) banks is invited to A.P. (DIR Series) Circular No. 15 dated October 1, 2004 on the captioned subject.

2. In terms of the said circular, an Indian company can issue equity shares against External Commercial Borrowings (ECB) subject to conditions mentioned therein and pricing guidelines as prescribed by the Reserve Bank from time to time regarding value of equity shares to be issued. Reserve Bank has received some references regarding how the rupee amount against which equity shares are to be issued shall be arrived at; in other words, what rate of exchange shall be applied to the amount in foreign currency borrowed or owed by the resident entity from/to the non-resident entity.

3. It is clarified that where the liability sought to be converted by the company is denominated in foreign currency as in case of ECB, import of capital goods, etc. it will be in order to apply the exchange rate prevailing on the date of the agreement between the parties concerned for such conversion. Reserve Bank will have no objection if the borrower company wishes to issue equity shares for a rupee amount less than that arrived at as mentioned above by a mutual agreement with the ECB lender. It may be noted that the fair value of the equity shares to be issued shall be worked out with reference to the date of conversion only.

4. It is further clarified that the principle of calculation of INR equivalent for a liability denominated in foreign currency as mentioned at paragraph 3 above shall apply, mutatis mutandis, to all cases where any payables/liability by an Indian company such as, lump sum fees/royalties, etc. are permitted to be converted to equity shares or other securities to be issued to a non-resident subject to the conditions stipulated under the respective Regulations.

5. Authorised Dealers may bring the contents of this circular to the notice of their constituents and customers concerned.

6. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully,

Rudra Narayan Kar
Chief General Manager In-Charge

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Web Application Development Web based Software Solution Web Application Deployment Web Application Solutions Web Application Software Development Web Application Deployment Web Application Programming Web Application Design and Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions