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Can a loan given to an overseas venture be converted into equity? If yes what are the reporting requirements?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 ROHIT SINGH asked over 2 years ago

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3 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered about 2 years ago

Yes, a loan may be converted into equity / CCPS under the automatic route and reported to RBI through the designated AD bank by way of a letter. Conversion of loan into preference shares (other than CCPS) need not be reported to RBI.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 jitendra etikala answered over 2 years ago

Dear Rohit, **Yes**, a loan may be converted into equity / CCPS under the automatic route and reported to RBI through the designated AD bank by way of a letter. Conversion of loan into preference shares (other than CCPS) need not be reported to RBI.

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Open uri20170510 32134 s5bvk0?1494421637 ARJUN PRATAP SINGH answered over 2 years ago

Dear Friend, as far as your query is concerned that Can a loan given to an overseas venture be converted into equity? If yes what are the reporting requirements? Let me informed that Yes, a loan may be converted into equity / CCPS under the automatic route and reported to RBI through the designated AD bank by way of a letter. Conversion of loan into preference shares (other than CCPS) need not be reported to RBI. Hope answer was helpful to you Regards, Arjun Pratap Singh

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