Friday, November 15, 2013

Overseas Foreign Currency Borrowings by Authorised Dealer Banks

The Reserve Bank of India has said that AD Category  - I banks may borrow funds from their Head Office, overseas branches and correspondents and avail overdraft in the Nostro accounts up to a limit of hundred per cent of their unimpaired Tier I capital as at the close of the previous quarter or USD 10 million (or its equivalent), whichever is higher (excluding borrowings for financing of export credit in foreign currency and capital instruments). Authorised dealers may borrow from their Head Office or overseas branches or correspondents outside India or any other entity as permitted by RBI. RBI permission is hereby granted to AD Category I banks to borrow from international / multilateral financial institutions for a limited period up to November 30, 2013. Such borrowings should be for the purpose of general banking business and not for capital augmentation and shall be subject to the
conditions stipulated in the A.P. (DIR Series) circular no. 40, 2013 dated September 10, 2013.
Further, such borrowings shall be eligible for the concessional swap facility of RBI as per A.P. (DIR
Series) circulars no. 40, 2013 dated September 10, 2013 and 54 dated September 25, 2013.


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