The Hindu Business Line : Cos can now grant loans in foreign currency for employees abroad

Such transactions would, however, be permissible only if the loan is granted for personal purposes in accordance with the lender's staff welfare scheme/loan rules and other terms and conditions that are applicable to the staff resident in India and abroad.

The Reserve Bank of India (RBI) has introduced a provision to this effect in the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations.

This move of the Central bank comes at a time when there are strong forex inflows into the country and the RBI has been mopping up dollar liquidity from the market.

India's forex reserves have now touched $82.774 billion, compared with $81.905 billion for the week ended June 27.

Indian companies that are looking at expanding presence in markets abroad are likely to be able to benefit their employees through the latest decision of the Central bank.

The current regulations under the Foreign Exchange Management Act (FEMA) already permit an Indian entity to lend in foreign exchange to its wholly-owned subsidiary or joint ventures abroad.

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