Euro Issue in foreign currency with authorized dealers/public financial institutions?

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Euro Issue in foreign currency with authorized
dealers/public financial institutions
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Foreign currency euro issue with the
authorised institution
1). Remember that the issue proceeds of your
companys 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.
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Foreign 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 Moodys
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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NOTE THE FOLLOWING
The authorized dealers or public financial
institutions will accept foreign currency
deposits of your companys 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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NOTE THE FOLLOWING
(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.
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NOTE THE FOLLOWING
(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 RBIs approval.
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Foreign 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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