NORMS FOR USING OVERSEAS MONEY RAISED VIA TAX-FREE RUPEE BONDS EASED

ISSUING AUTHORITY : RESERVE BANK OF INDIA

DATE OF ISSUE : 24/12/2013

EFFECTIVE DATE : IMMEDIATE EFFECT

CIRCULAR NO. 81

The resident entities and companies, allowed by the government to issue tax-free, secured, redeemable, non-convertible bonds in rupees to person resident outside India, can use such borrowed funds for -

1. Lending or re-lending in Infrastructure Sector; and
2. Keeping in fixed deposits with banks in India pending utilization by them for permissible end-uses.

Earlier, restrictions were imposed on usage of funds by person resident in India who had borrowed in rupees from a person resident outside India. They could not use such borrowed funds for any investments in any company or partnership firm or proprietorship concern or any entity, or for re-lending.

For detailed Circular, please follow the link below:
A.P. (DIR Series) Circular No.81