The RBI has asked corporates to park funds raised through ECBs (external commercial borrowings) for domestic expenditure with local banks. The modification in the norms for ECBs was done after a review of the developments in the global financial markets and current macro-economic conditions
Mumbai: Amid falling value of rupee, the Reserve Bank of India (RBI) today asked corporates to park funds raised through ECBs (external commercial borrowings) for domestic expenditure with local banks, a move which will increase inflow of foreign currency, reports PTI.
“The proceeds of the ECB raised abroad for rupee expenditure in India... should be brought immediately for credit to rupee accounts with AD Category I banks,” the RBI said in a notification.
Such funds could be used for local sourcing of capital goods, on-lending to self-help groups or for micro credit and payment for spectrum allocation, among other purposes.
The modification in the norms for ECBs was done after a review of the developments in the global financial markets and current macro-economic conditions. The directives have been made effective from today, the RBI said.
It, however, said that ECBs meant for foreign currency expenditure can be retained abroad pending utilisation.
The depreciation in rupee, which slumped to an all time low of 52.73 yesterday, has become a cause of concern for policy makers as the slide is affecting capital market and fuelling inflation.
The central bank said “as hitherto, however, the rupee funds will not be permitted to be used for investment in capital markets, real estate or for inter-corporate lending.”
As the cost of credit is significantly less in overseas markets, Indian companies have borrowed close to $29 billion in foreign currencies, through ECBs and FCCBs, so far in 2011, as against $18 billion in 2010.
Meanwhile, the RBI also enhanced the ‘all-in-costs ceiling’, which include rate of interest, fees and expenses, for raising funds through ECBs.
The ceiling with an average maturity period of ECBs between three and five years have been revised upwards to 350 basis points from 300 basis points.
However, the rate remains same for those with average maturity of above five years.
The enhancement in ceiling will be applicable up to 31 March 2012, the RBI said.
For the first time in the history of the Tata Group, somebody from outside the Tata family has been selected for the coveted post
Tata Sons, the holding company of the over $80 billion conglomerate Tata Group, on Wednesday announced that Cyrus P Mistry, the 43-year-old managing director of Shapoorji Pallonji Group, will succeed Ratan Tata.
"The Board of Directors of Tata Sons at its meeting today appointed Cyrus P Mistry as the Deputy Chairman. He will work with Ratan N Tata over the next year and take over from him when Tata retires in December 2012," Tata Sons said in a statement.
Commenting on the appointment, Ratan N Tata, chairman of Tata Sons, said: “The appointment of Cyrus P Mistry as deputy chairman of Tata Sons is a good and far-sighted choice.
“He has been on the Board of Tata Sons since August 2006 and I have been impressed with the quality and calibre of his participation, his astute observations and his humility.”
Mr Tata further said: “I will be committed to working with him over the next year to give him the exposure, involvement and operating experience to equip him to undertake the full responsibility of the Group on my retirement.”
Mr Mistry has been a director of Tata Sons since August 2006. A graduate in civil engineering from Imperial College, London, he also holds a masters of science in management degree from the London Business School.
The selection committee unanimously recommended Mr Mistry’s name. Mr Mistry will work with Ratan Tata for one year before he takes over as chairman. His appointment was largely in recognition of his family’s 16.5% stake in Tata Sons.
The five-member panel appointed by the Tata Sons board to find a successor to the chairman has seen its mandate evolve over time. Tata Sons had said while forming the committee to find a successor that the group would require someone with experience and exposure to direct its growth amidst the challenges of the global economy.
In May, the group said the selection committee had interviewed several candidates, both internal and external, but no final decision had been taken. Since then, the consensus within has been that the group is not yet ready for an expatriate leader.
The stay came after the accused in the 2G case, their relatives and lawyers had expressed their unhappiness over Tuesday’s announcement of shifting of the trial. The defence lawyers also opposed the move saying it would cause a lot of inconvenience to them and their clients
New Delhi: In a respite to lawyers and kin of the accused, the Delhi High Court on Wednesday stayed its order to shift the second generation (2G) spectrum case trial to the high-security Tihar jail from Patiala House court in the heart of the capital, reports PTI.
The stay came after the accused in the 2G case, their relatives and lawyers had expressed their unhappiness over Tuesday’s announcement of shifting of the trial. Former telecom minister A Raja and DMK MP Kanimozhi are among the accused in the case.
The seven-judge administrative committee headed by acting chief justice AK Sikri said the court’s administrative notification Tuesday to shift the trial will not come into effect and that the hearing will continue in the Patiala House court complex itself till an alternative arrangement is made.
The administrative committee also said a group of high court judges, lawyers and the judge-in-charge of the Patiala House courts will inspect the lower court premises again to explore the possibility of shifting the trial to a more spacious courtroom inside the court complex itself.
Sessions judge, the judge in-charge of Patiala House courts, special Central Bureau of Investigation (CBI) judge OP Saini and Registrar General of the Delhi High Court will be part of the group.
“If such arrangements do not work out, then the committee may also consider shifting the trial to nearby places such as Vigyan Bhawan and Pragati Maidan in the vicinity,” one of the lawyers, who was part of the in-chamber hearing on the issue, said outside the courtroom.
The accused in the 2G case had approached the high court earlier in the morning, challenging its 21st November notification to shift the trial to Tihar jail.
Around 15 defence lawyers mentioned the matter before a bench of justices SK Kaul and Rajiv Shakdher and sought its intervention on the decision to shift the trial, saying it would cause a lot of inconvenience to the lawyers and their clients.
“This case is not related to any terrorist activity where there is a security threat. It is only a case of economic offence that does not warrant this decision,” one of the defence lawyers had said.
On Tuesday, special judge Saini had announced shifting of the trial to Tihar jail from 24th November.
“In exercise of the powers conferred by Section 9 (6) of the CRPC, 1973, the acting chief justice and judges of this court (Delhi High Court) have been pleased to order that the trial of the 2G spectrum cases shall be held in Tihar court complex, New Delhi, according to law,” the notification, issued by the high court, read.
The decision was opposed by all accused, including former telecom minister A Raja and DMK MP Kanimozhi
“I do not know what is happening in this country. The shifting of the trial to Tihar jail would create a lot of problems as we will not be able to properly have legal consultation with our counsel.
“Till now, the lawyers could reach Patiala House courts from the Supreme Court or the high court within 10-15 minutes, but it would not be possible for them to reach Tihar jail as they would have to leave all their other cases,” Mr Raja had said.