Skip to main content

ECB vs FCCB


This is in response to the queries I received on whether ECB or FCCB is more convenient/liberal/less regulated.

For guidelines on each of them, please refer to the links attached in the respective articles.

FCCB

http://www.icai.org/icairoot/publications/complimentary/cajournal_nov05/703-708.pdf.

ECB

http://www.icai.org/icairoot/publications/complimentary/cajournal_may04/p1216-19.pdf

As regards which is more convenient, it always depends on the company raising funds.

Historically, companies prefer ECBs over FCCBs. The RBI data for the month of December 2007 showed only 7 of 44 companies raising funds through FCCBs automatic route and all 7 companies preferring the ECB over FCCB through approval route.

http://rbidocs.rbi.org.in/rdocs/ECB/pdfs/83662.pdf

Government has said that it is contemplating relaxing norms governing external commercial borrowings (ECBs) to enable Indian corporates access higher foreign capital at low cost. Besides, a review is underway to remove restrictions on foreign currency convertible bonds (FCCBs). The Govt is planning (though since quite a long time now) to amend FEMA and make the necessary changes in the guidelines so as to enable the Indian corporates raise substantial borrowings from overseas.

However, it has been made clear that the government would not allow unrestricted interest rate regime in ECBs in view of East Asian meltdown, caused by high interest rates and short duration of such borrowings in late ‘90s as Cost of borrowing is a concern for the Govt.

I hope at least this answers our initial questions. Please read through the links above while I prepare to answer more elaborately with updated information.

after all its all about ~ improving perfection ~

Labels:

Comments

Post a Comment

Popular posts from this blog

Angel Tax on start-ups may be amended soon

The Angel Tax imposed on start-ups has been the talk of the town lately. Various start-up founders have received demand notices from the tax authorities which plans to tax the capital receipts in the form of Income when the tax authorities believe that the amount is in excess of the value of the company. What is Angel Tax? In 2012, the then Finance Minister Pranab Mukherjee introduced a tax on unlisted companies which aimed at raising funds from investors (the 'angel investors") who invested in these companies with the objective of gaining significant returns. Since many companies used this route to launder money and raise funds at excessive valuations, the tax was imposed to arrest such money laundering. Angel Tax is a tax payable by the unlisted companies who raise funds via issue of shares where the share price is believed to be in excess of the fair market value of the shares sold. What is a Startup? An entity shall be considered as a Startup: (i). Upto a period o...
Post a Comment
Read more

Vikash Goel - Introduction

Hello People, Welcome to my Blog Please pardon me if u find this blog a bit unconventional, unusual and out of place. To be honest, m not a blogger and this is my Debut as far as Blogging is concerned. I am a simple, average guy from Kolkata, India. I am a CA, MS Finance, CFA (ICFAI, India), Diploma in Business Management, Bachelor of Commerce. Meanwhile for a quick look about me, visit the link below, (its become a little outdated as of now but still enough to give an idea about me) http://www.freewebs.com/vikash_goel/ www.vikashgoel.com Catch ya soon
1 comment
Read more

CA Info - industrial training

Hi Friends, Here is the list of approved insitutions eligible for imparting Industrial training Approved Organisations - Eastern Region SIEMENS LIMITED 43 SHANTI PALLY E.M.BY PASS CALCUTTA 700042 CITI BANK N.A. TATA CENTRE 41,CHOWRINGHEE ROAD CALCUTTA 700071 RECKITT & COLMAN OF INDIA LTD 41,CHOWRINGHEE ROAD CALCUTTA 700071 BRITANIA INDUSTRIES LTD . 14, TARATALA ROAD CALCUTTA 700088 ICI INDIA LTD 34, CHOWRINGHEE ROAD CALCUTTA 700071 GRASIM INDUSTRIES LTD. INDUSTRY HOUSE 14TH FLOOR, 10, CAMAC STREET KOLKATA 700017 AMERICAN EXPRESS BANK 21, OLD COURT HOUSE STREET CALCUTTA 700001 BALMER LAWRIE CO. LTD 21, NETAJI SUBHAS ROAD CALCUTTA 700001 INDIAN OIL CORPORATION LIMITED 2,GARIAHAT ROAD(S) DHAKURIA CALCUTTA 700068 SRF LIMITED EXPRESS BUILDING 1ST FLOOR BAHADUR SHAH ZAFAR MARG NEW DELHI 110002 INDIAN RAYON AND INDUSTRIES LTD RISHRA HOOGHLY 712249 PEPSI-COLA INDIA MARKETING COMPANY SREE MANJURI BLDG. SUITE NO.6 , 1ST FLOOR 8/1, MIDDLETON ROW CALCUTT...
116 comments
Read more