Overseas Corporate Bodies (OCBs) are not recognised lenders - RBI
Way back in 2003, the RBI had clarified that "no person resident in Indiacan borrow from or lend to an OCB in foreign currency or in rupees.” The RBI noticed that in spite of this clarification, borrowers have availed External Commercial Borrowing from OCBs post derecognition of the OCBs as investor class, on grounds that the OCBs are their foreign equity holders. So now RBI reiterates that OCBs not being recognized as investors cannot be recognized lenders. AD (Authorised Dealer) banks have been asked to bring the contents of this circular to the notice of their constituents and customers.
RBI CIRCULAR NO. 34/RBI/, Dated: May 12, 2006