External Commercial Borrowings Policy - Liberalisation Issue of Guarantee for operating lease - ಆರ್ಬಿಐ - Reserve Bank of India
External Commercial Borrowings Policy - Liberalisation Issue of Guarantee for operating lease
RBI/2008-09/438 |
A. P. (DIR Series) Circular No.62 |
April 20, 2009
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To |
All Category-I Authorised Dealer Banks |
Madam / Sir, |
External Commercial Borrowings Policy – Liberalisation |
Attention of Authorized Dealer Category – I (AD Category –I) banks is invited to A. P. (DIR Series) Circular No. 24 dated March 1, 2002, in terms of which AD Category – I banks have been permitted to allow payment of lease rentals, opening of letters of credit towards security deposit, etc. in respect of import of aircraft / aircraft engine / helicopter on operating lease basis subject to conditions mentioned therein. Further, in terms of A. P. (DIR Series) Circular No.01 dated July 11, 2008, as a measure of rationalization of the existing procedures, AD Category - I banks have been allowed to convey ‘no objection’ under the Foreign Exchange Management Act (FEMA), 1999 for creation of charge on immovable assets, financial securities and issue of corporate or personal guarantees in favour of overseas lender / security trustee, to secure the ECB to be raised by the borrower, subject to compliance of prescribed conditions. |
2. As a further measure of rationalization, it has been decided to allow AD Category – I banks to convey ‘no objection’ from the Foreign Exchange Management Act (FEMA), 1999 angle for issue of corporate guarantee in favour of the overseas lessor, for operating lease in respect of import of aircraft / aircraft engine / helicopter. |
Yours faithfully,
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Salim Gangadharan |
Chief General Manager-in-charge
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