FCNR (B) Loans

Corporatescan avail loans from Bank of Baroda. The Indian corporates/ firms are allowedto raise the funds through foreign currency loans at select Indian brancheswithin the prevailing policy guidelines of the Bank/ RBI.

Key Benefits

FCNR (B) loans are beneficial to the corporates on account of following:

At times, it may entail lesser interest cost vis-à-vis Rupee borrowings. The borrower is not required to go to the International market for raising the funds as

foreign currency funds are made available in India reducing the cost of raising such funds.

Broad purpose of loans

Corporate s are allowed to obtain foreign currency denominated loans in India under the above scheme for the following purposes:

1. For meeting working capital requirements in Indian Rupees. 2. By way of pre-shipment advances/ post shipment advances to the exporters. 3. Import of raw materials. 4. Import of capital goods. 5. Purchase of indigenous machinery. 6. Repayment of the existing Rupee Term Loan. 7. Repayment of any existing ECB's with the permission from RBI, Govt. of India.

The present guidelines for the different purposes of the loans are as under:

For meeting working capital requirements in Indian Rupees.

The loan can be granted after proper assessment and sanction of working capital requirements/ Maximum Permissible Bank Finance (MPBF). The borrowers should have natural hedge to cover themselves from exchange risk, which they will have to bear. The borrowers who do not have natural hedge are required to take forward cover to avoid the exchange risk. The borrowers with a sound financial strength, higher ratings say A+/A and do not have natural hedge may also be considered.

The loan can be disbursed up to 90% of the MPBF limit.

Wherever borrowers are covered under the Loan system for delivery of Bank credit, bifurcation of MPBF limit into foreign currency loan, loan component in rupees, cash credit component and bill limit should conform to RBI guidelines.

The foreign currency loan amount is to be taken as a part of loan component provided minimum period of the loan is -6- months.

Foreign currency loan can be disbursed in -4- currencies viz US$, Sterling, Euro and Japanese Yen.

Minimum amount of the loanUS$, GBP, Euro: 100,000Japanese Yen: 10 million.

Loan to exporters by way of Pre Shipment Credit in Foreign Currency (PCFC)/ Post Shipment Credit in Foreign Currency (PSFC)

The exporters can avail this facility by way of pre-shipment credit as well as post shipment credit in foreign currency. All other terms applicable to such type of Rupee advances shall also be applicable to foreign currency advances.

Import of raw materials.

The importers can take benefit of foreign currency loans for import of raw materials in lieu of rupee MPBF sanctioned to them. The rupee equivalent of the foreign currency loan amount is to be earmarked in the overall sanctioned MPBF limit. This loan can also be repaid in foreign currency.

Import of capital goods.

The importers of capital goods can avail the foreign currency loan for a period not exceeding -3- years including moratorium period. Normally, the import of capital goods should be arranged on 180 days Usance basis.

Purchase of indigenous machinery.

The corporates can raise the foreign currency loans for their capital expenditure/ project expansion plans etc for the purchase of indigenous machinery.

Repayment of existing Rupee Term Loan

The Foreign Currency Loans can be utilised for the repayment of the existing Rupee Term Loan provided the duration of the foreign currency loan does not exceed the portion of the existing rupee loan which has not yet expired or 3 years whichever is less.

Repayment of ECB's

The repayment of the ECB's requires permission from the Government of India / RBI as per the applicable guidelines. Corporates can raise the FCNR (B) Loans after obtaining requisite permission from RBI/ Govt. of India and completing other formalities.

FCNR (B) Loans

Terms & Conditions

Service/processing charges vary according to the purpose of the loan.

1% p.a. if the loans are not availed of within -30- days from the date of sanction.

1% of the Loan amount for the remaining period of the Loan will be deducted on prepayment

The rate of interest normally applicable to FCNR Loans is governed by the circulars issued by International Division at Corporate Centre from time to time. At present the indicative rates depends on the credit rating of the party ie. For "AAA" rated customers it is 500 bps over 3 months USD LIBOR, FOR "AA' rated customers it is 550 bps over three months LIBOR & for "A" rated customers it is 600 bps over USD LIBOR.

For the foreign currency denominated Term Loans, the maximum rate of interest is 4% over -6- months LIBOR

Documentation & Procedure

To avail of FCNR (B) Loan by earmarking the working capital facilities, the borrowers can approach the concerned branch where they are enjoying credit facilities.

The branch will arrange for the sanction of the loan from the competent authority of the Bank.

For all other purposes, the foreign currency loans can be granted after proper assessment of the requirement of the borrower and the sanction of the same by the Bank. For sanction of these loans, the borrowers required to provide all the information required by the Bank for sanction of credit facilities.

After sanction of the facilities, execution of documents as per the procedure of the Bank and compliance of all the terms and conditions by the Bank, the loans are disbursed at one of the Position Maintaining Offices (Link) of the Bank.

External Commercial Borrowings

The foreign currency borrowings raised by the Indian corporates from confirmed banking sources outside India are called "External Commercial Borrowings" (ECBs). These Foreign Currency borrowings can be raised within ECB Policy guidelines of Govt. of India/ Reserve Bank of India applicable from time to time.

ECBs at Bank of Baroda

Bank of Baroda is very active and is a leading player in granting and arranging various forms of foreign currency facilities through ECB route for the Indian Corporates. BOB focuses on all type of foreign currency credit requirements of Indian corporates in arranging the Foreign Currency Loans.

Bank of Baroda, India’s International Bank ,having a strong global presence with 93 branches / offices in 24 countries including the major global Financial Centers ( Brussels, Dubai, Hong Kong, London, New York and Singapore etc.) is very evenly placed and have an edge over all others in its capability to arrange/ grant the funds from the international market.

Bank of Baroda has a few decades of experience in arranging foreign currency loans. This long experience and wide presence across the globe brings leverage to BOB to understand the ECB market better thus offer best terms to the clientele.

International Merchant Banking Cell (IMBC)

With rising activities by Indian corporates in the global as well as back home in India , the quest for cheaper and quicker global fund is growing at a substantial pace. Mid-sized companies have also joined the bandwagon. The idea behind is to scale up operations, become globally competitive and getting access to foreign markets.

They will also require the international Corporate/ Merchant/ Investment Banking Services to arrange the funds as well for other purposes.

International Merchant Banking Cell (IMBC) has been set up at BCC, Mumbai to pay focused attention to the international merchant banking needs of Indian corporates with special emphasis on External Commercial Borrowing .

IMBC has been offering Corporate/ Merchant/ Investment Banking services with a range of products/ activities as enumerated below:

Arranging/ granting Foreign Currency Loans/ External Commercial Borrowing. Providing whole range of transactional banking services to Indian corporates for their

offices, Joint Ventures, Subsidiaries abroad at places where we have branches. Offering Foreign Exchange/ Derivative products. Providing Buyers’ Credit/ Suppliers’ Credit. Arranging / underwriting/ participating in Syndicated Loan Raising funds for corporates through bilateral loans/ club deals Arranging funds from International Markets by way of Bonds, FRNs, FCCBs etc. Arranging loans from Export Credit Agencies of other countries Advisory services on overseas investments Innovative tailor-made solutions to the specific requirements of corporates. Structured financing for procuring specific assets such as rigs, ships, aircrafts etc. Financing and structuring cross border acquisition debt

Global Syndication Centre (GSC) at London (UK)

Regional Syndication Centre (RSC) at Dubai (UAE)

Bank has set up Global Syndication Centre (GSC) at London (UK) and Regional Syndication Centre (RSC) at Dubai (UAE) to exclusively arrange tailor made solutions for foreign currency / services at a competitive price for Indian / non Indian corporates .

It has a dedicated, professionally expert and specialist team both in India and abroad with international exposure in the area of arranging Loan Syndication / other services.

Intending corporate / Institutional clients can contact any of the following offices 

Corporate Financial Service Branches (CFS) (click branch locator) Corporate Banking Branches (CBBs) (click branch locator )

International Business Branches (IBBs) (click branch locator ) Nearest selected branches (click branch locator ) Main branch of the city (click branch locator )

OR you may approach directly to the

Assistant General ManagerInternational Division, BCCMumbaiTel No: 91-22-6698 5409Fax No: 91-22- 26523509 intl-mktg.bcc@bankofbaroda.com

The concerned branch will assess/ appraise the financial and other information to be given by the company like any other rupee credit facilities. The corporates need to ascertain that their requirement is as per the ECB guidelines of the RBI/ Govt. of India. Details of ECB policies / guidelines are available on RBI website (www.rbi.org.in)

Pricing

The pricing of the foreign currency loans/ services implies the total cost to the company comprising –

rate of interest / margin ( it is linked with the risk profile of the intending borrower) arrangement / upfront fee and other fees.

The arrangement fee / upfront fee is a onetime cost. The pricing depends on various factors such as the credit rating of the borrower, tenor of the loan, demand/supply position of the foreign currency available, market conditions etc. The prices keep on changing as per the market scenario and are normally valid for a period of -30- days. In addition to the pricing, there are legal/ documentation / out of pocket expenses etc. These are normally in the range of US$ 15,000 or US$ 20,000, but can be higher in some cases. 

Pricing offered is flexible, can be discussed and negotiated.

ECB through Syndicated Loans- Stages in brief:

To discuss the terms and conditions of the ECB and finalize the same with BOB. To give the mandate to BOB to arrange the ECB. Bank will arrange to end to end solutions as required for syndication To obtain required approvals from RBI/ Govt. of India. Execute Loan Agreement and create charge on the securities, if applicable. If applicable, obtain exemption from withholding tax under Section 10(15)(iv)

Foreign Currency Credits

The Foreign currency denominated credit facilities are granted to the Indian corporations in India as well as at the Money Centre Branches abroad.

Corporations interested in raising foreign currency funds both in India and abroad may contact in India the branches they are dealing with, the Position Maintaining Offices (PMO's/ Authorised Foreign Exchange Branches), Corporate Banking Branches, Industrial Finance branches or any of the major branch in the city. They may also contact the Bank's Regional Offices/ Zonal Offices for the required information/ guidelines. They may contact the International Division, Central Office at Mumbai on the following address (Click here Branch Locator):

Corporate OfficeBank of Baroda, Baroda Corporate Centre,International Division,Plot No C - 26, G - Block, Bandra East, Mumbai 400 051.

Foreign Currency Loans In India (FCNR 'B' Loans)

The foreign currency denominated loans in India are granted against the foreign currency funds a bank has on account of FCNR(B) Deposit. These loans are commonly known as FCNR(B) Loans.

Bank of Baroda with a wide global presence has a large base of NRI customers/ depositors. This enables, Bank of Baroda pool in from a arge resource base of FCNR(B) deposits and is in a position to offer the Foreign Currency Loans in India under FCNR(B) Plan at very competitive rates.

Foreign Currency Credit outside India

With a presence at major financial centers of the world, Bank of Baroda has strong foreign currency resources at Money Centre Branches. This enables Bank of Baroda to arrange for and grant Foreign Currency Credits to Indian as well as multinational corporations at competitive rates.

The foreign currency denominated Loans are granted at Money Centre Branches across the globe. The Foreign Currency Loans granted to Indian Corporate are granted as per External Commercial Borrowing (ECB) Policy of Govt. of India.

Export Credit (Rs)

RUPEE EXPORT CREDIT (PRE-SHIPMENT AND POST-SHIPMENT) :

BOB offers both pre and post shipment credit to the Indian exporters through Rupee Denominated Loans as well as foreign currency loans in India.

Exporters having firm export orders or confirmed L/C from a recognized Bank can avail the export credit facilities from BOB provided they satisfy the required credit norms. The details of the credit norms can be obtained from the nearest authorised branch of the Bank.

Rupee export credit is available for a maximum period of -360- days from the date of first disbursement. The corporates, if required can book forward contracts in respect of future export credit drawals.

EXPORT BILL RE DISCOUNTING :

BOB offers financing of export by way of bill discounting of export bills to provide post shipment finance to the exporters at competitive international rate of interest.

The export bills (both Sight and Usance) can be purchased/ discounted provided they comply with the norms of the Bank/ RBI.

All exporters are eligible to cover the bills drawn under L/C, non-credit bills under sanctioned limits under the Bill discounting Scheme.

Import Finance

Bank of Baroda provides various types of funding/ services to the importers for facilitating the imports in the country. The vast network of Bank's overseas branches/ subsidiaries and Correspondent Banks worldwide facilitate prompt & efficient services to the importers. All the facilities are subject to the prevalent rules of the Bank/ RBI guidelines.

The various facilities provided are:

Collection of import bill. Opening of Import L/Cs (Sight/ DA) Financing of import by way of Foreign Currency Loans Issuing Guarantees etc. on behalf of importers.

COLLECTION OF IMPORT BILLS:

The import bills are collected through the 131 authorised branches at very competitive rates. The Bank has correspondent relationship with reputed International Banks throughout the world and can provide the services to importers who may be importing from any part of the globe.

LETTER OF CREDIT:

Bank of Baroda offers L/C facility for the purchase of goods in the international market. Being a well-known international Bank of repute, the L/Cs of the Bank of Baroda are well accepted in the International market.

With the Letter of Credit of Bank of Baroda, importers can build up better trust/ confidence in their suppliers and develop other business relationship at a much faster pace.

The L/C facility can be granted to the importers after assessing their requirement/ credit worthiness/ financial strength and other parameters being to the satisfaction of the Bank.

BANK GUARANTEES:

Bank of Baroda on behalf of importers/ other customers issues guarantees in favour of beneficiaries abroad. The guarantees can be both Performance and Financial.