Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to A.P.(DIR Series) Circular No. 39 dated December 8, 2008 and A.P. (DIR Series) Circular No. 58 dated March 13, 2009 on the captioned subject. In terms of Para 4 B of A.P (DIR Series) Circular No. 39 dated December 8, 2008, Reserve Bank has been considering proposals from Indian companies for buyback of FCCBs out of their internal accruals, under the approval route up to a total amount of USD 50 million of the redemption value per company, subject to a minimum discount of 25 per cent on the book value.

i) minimum discount of 25 per cent of book value for redemption value up to USD 50 million;
ii) minimum discount of 35 per cent of book value for the redemption value over USD 50 million and up to USD 75 million; and
iii) minimum discount of 50 per cent of book value for the redemption value of USD 75 million and up to USD 100 million.

3. All other terms and conditions stipulated in A.P. (DIR Series) Circular No. 39 dated December 8, 2008 will continue to be applicable.  This facility shall come into force with immediate effect and the entire procedure of buyback should be completed by December 31, 2009 as specified in A.P. (DIR Series) Circular No. 58 dated March 13, 2009.

4. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

5. 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 is without prejudice to permissions / approvals, if any, required under any other law.