BANKING AFFAIRS

Detailed explanation-1: -A Foreign Currency Convertible Bond is a kind of external commercial borrowing and as the name suggests the funds are raised in foreign currency through these bonds, specifically outside India. These funds are borrowed funds. These bonds are also convertible bonds, unlike the usual bonds which are non-convertible.

Detailed explanation-2: -From an Indian perspective, Foreign Currency Convertible Bonds (FCCBs) mean a bond issued by an Indian company expressed in foreign currency, and the principal and interest in respect of which is payable in foreign currency.

Detailed explanation-3: -A foreign currency convertible bond (FCCB) is a convertible bond that is issued in a foreign currency, which means the principal repayment and periodic coupon payments will be made in a foreign currency. For example, an American listed company that issues a bond in India in rupees has, in effect, issued an FCCB.

Detailed explanation-4: -foreign bond. Bond denominated in the local currency of the country where the bond is issued, issued by a foreign borrower, and registered for sale to investors in the country where it is issued. For example, a US dollar-denominated bond issued in the US market by an issuer that resides outside the United States.

Detailed explanation-5: -Since these bonds are convertible into equity shares over a period of time as provided in the instrument, therefore they are covered under FDI policy & counted towards FDI.