(i) Proposals for raising foreign currency loans/ credits viz. Buyers Credit, Suppliers Credit, or lines of credit by firms/companies/lending institutions, banks etc. for financing cost of import of goods, technology or for any other purposes other than those considered by Reserve bank in terms of paragraph 7B 8 and 7B 8A should first be submitted to Government of India, Ministry of Finance ( Department of Economic Affairs), ECB Division, New Delhi for necessary clearance. The proposals are considered by the Government on merits and in light of prevailing Government policy.

(ii) In terms of Section 8(1) of FERA 1973 no person resident in India can borrow any foreign exchange from any person resident in or outside India without prior permission of Reserve Bank. Similarly, Section 9(1) of the Act places certain restrictions on persons resident in India receiving payments from or making payments to persons resident outside India. Consequently, all loans or credits secured by persons resident in India from non-residents as also repayment of such loans/credits and payment of interest and other charges thereon, require prior permission of Reserve Bank.

NOTE: The above procedure is also applicable for import of capital goods on financial