What changed
The earlier deadline of June 30, 2010 for FCCB buyback under approval route has been extended to June 30, 2011. This follows representations from issuers and a policy review.
What it means for you
Indian companies with outstanding FCCBs get more time to manage their foreign currency liabilities through buybacks. Banks must process applications under the same conditions as before, ensuring compliance with FEMA and earlier circulars.
What you must do
- Inform corporate clients about the extended deadline for FCCB buyback applications.
- Verify that buyback applications comply with conditions from circulars dated Dec 8, 2008 and Apr 28, 2009.
- Forward complete applications with supporting documents to RBI's ECB Division in Mumbai.
- Ensure all transactions adhere to FEMA sections 10(4) and 11(1).
Who it affects
AD Category-I banks, Indian companies with outstanding FCCBs, Corporate clients seeking FCCB buyback
What is the new deadline for FCCB buyback applications?
The deadline has been extended to June 30, 2011, from the earlier June 30, 2010.
Which earlier circulars' conditions apply to these buybacks?
Conditions from A.P. (DIR Series) Circular No.39 dated Dec 8, 2008 and Circular No.65 dated Apr 28, 2009 must be met.
How should banks submit these applications to RBI?
Applications must be submitted through the designated AD Category-I bank to the Chief General Manager-in-Charge at RBI's ECB Division in Mumbai.