RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI - 400 001
November 18, 1999 A.D.(M.A. Series) Circular No.34
To,All Authorised Dealers in Foreign Exchange
Dear Sirs,
Prepayment of External Commercial Borrowings (ECBs)In terms of paragraphs 7B.7 (ii) & (iii) of Exchange Control Manual, authorised dealers, designated by the borrowers, have been permitted to effect remittances towards repayment of loans, payment of interest/penal interest, subject to certain conditions. It has now been decided that in the case of ECBs which had been approved by the Government of India, authorised dealer designated by the borrower, may allow the remittances towards prepayment/part-prepayment of ECB to the extent such prepayment has been approved by the Government of India, Ministry of Finance, Department of Economic Affairs (ECB Division), New Delhi and a letter from Government to that effect is produced by the borrower. Authorised dealers concerned should, immediately furnish the details of such remittances to the concerned Regional Office of Reserve Bank (ECD), quoting the Registration number allotted for the loan.
2. In case of prepayment of ECBs approved by the Reserve Bank, the borrower may submit an application for prepayment of loan through designated authorised dealer to the Reserve Bank of India, Exchange Control Department, Central Office, (ECB Division), Mumbai together with the following documents :-
A certificate from their Statutory Auditors to the effect that the ECB proceeds have been utilised for the purpose for which ECB was sanctioned.
Acknowledgement from the Regional Office of Reserve Bank for having received ECB-2 statement for the immediate preceding quarter.
On receipt of approval, the designated authorised dealer may effect the remittance towards prepayment of ECB under advice to the concerned Regional Office of Reserve Bank (ECD), quoting the Registration number allotted for the loan.
3. The following consequential amendments may be carried out in the Exchange Control Manual -
Volume I A new sub-paragraph (iv) may be added to paragraph 7B.7 as per the enclosed Slip.
The existing sub-paragraphs (iv) to (viii) may be renumbered as (v) to (ix).
4. Authorised dealers may bring the contents of this circular to the notice of their concerned constituents.
5. The directions contained in this circular have been issued under Section 73(3) of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and any contravention or non-observance thereof is subject to the penalties prescribed under the Act.
Yours faithfully,
B. MAHESHWARAN
Chief General Manager
Slip[AD/MA/ 34 /1999]
7B.7(iv) Applications for remittance towards prepayment of outstanding ECB which was earlier approved by the Government of India, should be made to the designated branch of authorised dealer through whom the borrower is making debt servicing payments, together with the Government approval in original for prepayment of outstanding ECB. The designated branch of authorised dealer may effect the remittance on behalf of their constituent borrower based on the Government approval, under advice to the concerned Regional Office of Reserve Bank quoting the Registration number of the loan.
In case of prepayment of outstanding ECB approved by Reserve Bank, the borrower is required to submit an application for prepayment of loan to the Reserve Bank of India, Exchange Control Department, Central Office (ECB Division), Mumbai through the designated branch of an authorised dealer together with the following documents:-
A certificate from Statutory Auditor to the effect that the ECB proceeds have been utilised for the purpose for which ECB was sanctioned.
Acknowledgement from the concerned Regional Office of Reserve Bank for having received ECB-2 statement for the last quarter.
The designated authorised dealer may effect the remittance towards prepayment of ECB based on the approval granted by Reserve Bank under advice to the concerned Regional Office of Reserve Bank quoting the Registration number allotted for the loan.
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