Cos may issue debt to NRIs as bonus: RBI

With a view to rationalizing and simplifying the procedures, it has been decided by the Reserve Bank of India (RBI) that an Indian company may issue non-convertible/redeemable preference share or debentures to non-resident shareholders by way of distribution as bonus from its general reserves. So far, RBI was granting permission for such issuance's on a case-to-case basis. The RBI will have no objection if the borrower company wishes to issue equity shares for a rupee amount less than that arrived at as mentioned above by a mutual agreement with the ECB lender. It may be noted that the fair value of the equity shares to be issued shall be worked out with reference to the date of conversion only.