Import of Aircraft on Operating Lease - Security Deposits
RBI has decided that Authorised Dealer banks (ADs) may permit airline companies (other than a Public Sector company or a Department/Undertaking of the Government of India/State Government/s) to remit up to USD 1,000,000 (US Dollar one million only) per aircraft towards security deposit (for payment of lease rentals) with lessor for import of aircraft / aircraft engine / helicopter on operating lease without a standby letter of credit or a guarantee from a reputed international bank abroad or a guarantee of an AD in India against the counter-guarantee of a reputed international bank abroad. This is of course subject to certain conditions:-
(i) The AD is satisfied about the bona fides of the transaction.
(ii) The airline company has obtained necessary approval from appropriate authority like Ministry of Civil Aviation/Director General of Civil Aviation, for importing the aircraft/helicopter on operating lease.
(iii) Remittance is permitted as per the Policy on Advance Remittances
(iv) The final maturity of the security deposit should not be beyond the date of the last instalment towards lease rental or date of return of the aircraft / helicopter to the lessor, whichever is later
For a PSU airline, there will be no bank guarantee.
A.P. (DIR Series) CIRCULAR NO 13/ RBI, Dated: September 27, 2005