For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

Companies can convert overseas borrowing into equity via ECB route: RBI

By Religare
|
Companies can convert overseas borrowing into equity via ECB route: RBI
Reserve Bank of India (RBI) said companies can convert their overseas borrowings through the ECB route into equity shares at the foreign exchange rate applicable on the date of swap agreement., reported PTI.
 

"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," the RBI said in a notification on conversion of External Commercial Borrowing (ECB) and lumpsum fee/royalty into equity.

The RBI also said that where the liability sought to be converted by the company is denominated in foreign currency as in case of ECB and import of capital goods, it will be in order to apply the exchange rate prevailing on the date of the agreement between the parties concerned for such conversion.

The notification was issued after RBI received references regarding what rate of exchange should be applied to the amount in foreign currency borrowed or owed by the resident entity from/to the non-resident entity.

Dion Global Solutions Ltd.

Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more