)
The Reserve Bank of India (RBI) has permitted Indian companies to use money, raised by issuing tax-free non-convertible bonds to overseas investors, in infrastructure projects.
The resident entities and companies, allowed by the government to issue tax-free, secured, redeemable, non-convertible bonds in rupees to person resident outside India can use such borrowed funds for lending or re-lending, said RBI.
The central bank said this money could be parked in deposits with banks in India pending utilisation by them for permissible end-uses.
Earlier, RBI had imposed restrictions on usage of funds by person resident in India borrowed in rupees from a person resident outside India. They could not use such borrowed funds for any investment in any company or partnership firm or proprietorship concern or any entity, or for re-lending.
