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.
Purpose of loans
Corporates are allowed to obtain foreign currency denominated loans in India under the above scheme for the following purposes:
• For meeting working capital requirements in Indian Rupees.
• By way of pre-shipment advances/ post shipment advances to the exporters.
• Import of raw materials.
• Import of capital goods.
• Purchase of indigenous machinery.
• Repayment of the existing Rupee Term Loan.
• Repayment of any existing ECB's with the permission from RBI, Govt. of India.