RBI – Bank can not Loan for subscription of Indian Depository Receipts (IDRs) or against security/collateral of IDRs

RBI/2010-11/ 543
DBOD. Dir.BC. 96 /13.03.00/2010-11

May 25, 2011

All Scheduled Commercial banks
(Excluding RRBs)

Dear Sir / Madam

Finance for and Loans/Advances against IDRs

In terms of Foreign Exchange Department circular A.P (DIR Series) Circular No.5 dated July 22, 2009, eligible companies resident outside India have been permitted to issue Indian Depository Receipts (IDRs) through a domestic depository, subject to terms and conditions indicated therein.

2. The matter regarding extending of finance for subscription to the IDRs and loans thereagainst has been examined. It has been decided that no bank should grant any loan/advance for subscription to IDRs. Further, no bank should grant any loan/advance against security/collateral of IDRs issued in India.

Yours faithfully

(B. Mahapatra)
Chief General Manager-in-Charge

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2. First Indian Depository Receipts (IDRs) Issue – Red Herring Prospectus filed with SEBI by Standard Chartered Plc- a discussion
3. Taxability of Standard Chartered PLCs Indian Depository Receipts (IDRs)
4. Indian Depository Receipt Rules notified by GOI operationalises with immediate effect
5. Companies (Issue of Indian Depository Receipts) (Second Amendment) Rules, 2009 – Amendments in Schedule – Notification No. G.S.R. 251(E), dated 15-4-2009