Here we are going to discuss and get a clear idea about the euro issue in foreign currency with authorised institutions.

1. Euro Issue in foreign currency
with authorized dealers/public
financial institutions
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2. 1). Remember that the issue proceeds of your company’s Euro Issue kept
in foreign currency can be utilized for the following purposes:
(a) meeting the cost of expansion or diversification or acquisition or
import of new plants and machinery;
(b) repayment of foreign currency loans;
(c) any other purpose approved by the Government.
Foreign currency euro issue with the authorised institutionForeign currency euro issue with the authorised institution
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3. Foreign currency euro issue with the authorised institutionForeign currency euro issue with the authorised institution
Further remember that pending
deployment of funds for the aforesaid
purposes, your company is allowed to
keep the currency funds abroad in
deposits with or certificate of Deposits
or other instruments of banks who have
been rated not less than AA( -) by
Standard and Poor or by Moody’s for
short-term obligations, deposits to the
branch outside India of an authorized
dealer in India and in treasury bills and
other monetary instruments with,
maturity or unexpired maturity not
exceeding one year.
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4. NOTE THE FOLLOWINGNOTE THE FOLLOWING
The authorized dealers or public financial institutions will accept foreign
currency deposits of your company’s Euro Issue subject to the conditions
given below:
(a) Concerned authorized dealers/public financial institutions are not
allowed to swap the currency for rupees but can use the amount for lending in
foreign currency to eligible clients;
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5. (b) The concerned authorized dealers/public financial institutions are eligible
to charge interest not exceeding 2.5% over 6-months for lending out such
funds.
(c) The authorized dealers can invest surplus currency out of the Euro Issue.
(d) The authorized dealers are required to maintain a cash reserve ratio or
statutory liquidity reserve as laid down by RBI from time to time while
dealing with such foreign currency deposits.
NOTE THE FOLLOWINGNOTE THE FOLLOWING
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6. (e) The above conditions are in addition to the conditions as may be imposed by
the Government of India in its approval letter for the Euro Issue.(g) retention of
proceeds of GDRs or FCCBs abroad pending their utilization and
(f) Retention of proceeds of GDRs or FCCBs abroad pending their utilization
and investing them, abroad for a period not exceeding 1 year also pending their
utilization is a temporary facility allowed by RBI for parking of funds and this
facility should not be used as an arena for investment by investing such funds
beyond the period of 1 year without RBI’s approval.
NOTE THE FOLLOWINGNOTE THE FOLLOWING
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7. Foreign Currency DepositsForeign Currency Deposits
It will carry interest at a rate not exceeding LI-BOR for the
respective period for which deposit is accepted.
FCDs are convertible into Indian Rupees only as and when
expenditure for approved end-uses is incurred by the issuer
company including up to a maximum of 15% of the
proceeds earmarked for general corporate restructuring uses.
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8. http://www.onlinecompanyregistration.in
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