Circulars from the Reserve Bank of India: 1. Corporates under investigation can now avail of external commercial borrowings through the automatic route. The RBI and banks must notify investigating agencies of any approvals. 2. Exporters can now write-off unrealized export bills of up to 5-10% of the previous year's export proceeds, depending on their status, in order to provide greater flexibility. 3. Foreign institutional investors can now use corporate bonds as collateral in the cash market segment and government securities and corporate bonds in derivatives trading, in addition to existing collateral types.

1. HEDGE-SQUARE
FEMA SNAPS: From 01st March, 2013 to 20 th March, 2013
I. Circular No. 87 dated 05th March, 2013: External Commercial Borrowing
Policy (ECB) Policy – Corporates under Investigation:
Current guidelines prohibits corporate, who are under investigation by any law
enforcing agencies like the Directorate of Enforcement (DoE), etc, to avail ECB under
an automatic route and such proposal is subject to approval of the RBI.
Vide this Circular RBI has allowed ECBs under the automatic route, as per the current
norms, to all the entities notwithstanding the pending investigations / adjudications /
appeals by the law enforcing agencies, without effecting the outcome of such
investigations / adjudications / appeals. RBI and Authorised dealer at the time of
approval shall intimate the concerned investigating agencies by sending a copy of
approval letter.
II. Circular No. 88 dated 12th March, 2013: “Write-off” of Unrealised Export
Bills – Export of Goods and Services – Simplification of Procedure:
With a view to providing support and greater flexibility to all the Exporters and
Authorised Dealer (AD) Banks, vide this Circular it has been decided to revise the limits
of “Write-Offs” of unrealised Export Bills in following manner.
a. Self “Write-Off” by an Exporter – 5% of the total export proceeds realized
during the previous calendar year, if he is other than status holder exporter
b. Self “Write-Off” by an Exporter – 10% of the total export proceeds realized
during the previous calendar year, if he is status holder exporter
c. “Write-Off” by an AD – 10% of the total export proceeds realized during the
previous calendar year
Off course above said revised position has been introduced with certain conditions and
restrictions.
III. Circular No. 90 dated 14th March, 2013: Maintenance of collateral by
Foreign Institutional Investors (FIIs) for transactions in the cash and F & O
segments
Vide this Circular it FIIs has been permitted use their investment in corporate bonds as
a collateral in the cash segment and government securities and corporate bonds as
collateral in the F & O Segment in addition to already permitted collaterals. The
operational guidelines in this regard will be issued separately by SEBI.
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