Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: list of goods taxed at 4% :: VAT RATES :: VAT Audit :: TDS :: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: ACCOUNTING STANDARD :: empanelment
 
 
General »
 Simplified one page Income Tax Return Form: Changes to keep in mind before filing tax return for AY2017-18
  No proposal to replace Income Tax with Banking Cash Transaction Tax
 GST coming July 1 despite calls for delay: Revenue Secretary Hasmukh Adhia
 Centre introduces provision of taxation on NPS in Income Tax Act
 Income Tax Department Clarifies On Cash Withdrawal From Banks, Post Offices
 The Goods And Services Tax (Compensation To States) Bill, 2017
  Goods and Service Tax (GST) and Real Estate Sector
 New Income Tax Rules On Home Loan Come Into Effect
 Here's how late filers can save on stress and taxes
 Clarifications on the Taxation and Investment Regime for Pradhan Mantri Garib ?Kalyan Yojana, 2016
 Companies should invest in upgradation of tax technology

RBI RESTRICTS SHORT-TERM NCDS FROM WEAK FIRMS
June, 25th 2010

Companies unable to pay their debts and are rated substandard assets by banks cannot raise money through non-convertible debentures (NCDs) with maturity of less than one year, the Reserve Bank of India (RBI) said in a notification.

According to RBI, companies that want to float NCDs for less than one year should have a credit rating of a minimum P2 or equivalent from authorised rating agencies.

The Issuance of Non-Convertible Debentures (Reserve Bank) Directions, 2010, which brings NCDs of up to one year under the regulatory jurisdiction of RBI, spells out clear eligibility for companies that aim to raise short-term money through such instruments.

The corporate has to have a tangible net worth of minimum Rs 4 crore as per the latest audited balance sheet; should have sanctioned working capital limit or term loan by banks or financial institutions and the borrowal account of the corporate should be classified as a standard asset by the financing banks, RBI said.

Apart from asking the companies to get a credit rating, RBI has specifically asked them to get their NCDs rated at the time of issuance.

RBI doesnt want companies to float NCDs based on stale ratings, an RBI official said. According to him, RBI has tried to make the NCD guidelines consistent with the commercial paper (CP) guidelines. The minimum credit rating has to be P2 of Crisil or such equivalent rating by other agencies, the notification said.

Also, RBI does not want companies to issue NCDs for maturities of less than 90 days from the date of issue. The exercise date of option (put/call), if any, attached to the NCDs shall not fall within the period of 90 days from the date of issue, the notification said.

Many companies have raised money through such issues though the market was hit for about a year and a half after the credit crisis gripped the world.

The market (NCD) has come down from its peak prior to the crisis, the official said. According to him, RBI is trying to analyse and understand the market and is awaiting reports.

As per RBI regulations, NCDs cannot be issued for a denomination less than Rs 5 lakh (face value) and in multiples of Rs1 lakh.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Achievements

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