The Reserve Bank of India (RBI) on Friday decided not to treat/reckon the renewal/rollover of an existing/original guarantee, which is part of the total financial commitment of the Indian party, as a fresh financial commitment subject to certain riders.
These riders, including the existing/original guarantee, was issued in terms of the then extant/prevailing FEMA. Besides that there is no change in the end use of the guarantee, there is no change in any of the terms & conditions, including the amount of the guarantee except the validity period.
RBI also said that the reporting of the rolled over guarantee would be done as a fresh financial commitment in Part II of form overseas direct investments. And if the Indian party is under investigation by any investigation / enforcement agency or regulatory body, the concerned agency / body shall be kept informed about the same, said RBI.
RBI also said that in case these conditions are not met, the Indian party shall obtain prior approval of RBI for rollover / renewal of the existing guarantee through the designated bank.
