By News Desk
New Delhi: The Reserve Bank of India (RBI) has allowed Indian entities to issue tax-free bonds to overseas residents for investment in infrastructure sector.
“On a review, it has been decided to permit such resident entities/companies in India, authorised by the Government of India, to issue tax-free, secured, redeemable, non-convertible bonds in rupees to persons resident outside India…,” RBI said in a notification.
However, it said, fund raised has to be used for lending to the infrastructure sector.
A report in Business Today says: “Besides, the borrowed fund can be kept in fixed deposits with banks in India pending utilization by them for permissible end-uses, the central bank said.”
“According to the current regulation, the central bank imposes restrictions on person resident in India who have borrowed in Rupees from a person resident outside India to the effect that such borrowed funds cannot be used for any investment,” says a Business Today report.
