Section 4(2) in The Foreign Exchange Management (Borrowing Or Lending In Foreign Exchange) Regulations, 2000
(2)An authorised dealer in India may borrow in foreign currency in the circumstances and subject to the conditions mentioned below, namely:--(i)An authorised dealer may borrow from his Head Office or branch or correspondent outside India [or any other entity as permitted by Reserve Bank] [ Inserted by Notification No. G.S.R. 668 (E) dated 26.9.2013 (w.e.f. 5.5.2000)]3 upto [hundred percent or such other limit as decided by the Reserve Bank, from time to time] [Substituted for the words "fifty percent" by Notification No. G.S.R. 595 (E) dated 5.9.2013 (w.e.f. 5.5.2000)] of this unimpaired Tier I capital or US $ 10 million, whichever is more, subject to such conditions as the Reserve Bank may direct.Explanation. - For the purpose of clause (i), the aggregate loans availed of by all branches in India of the authorised dealer from his Head Office, all branches and correspondents outside India, shall be reckoned.[* * *] [ Clause (ii) omitted by G.S.R. 60(E), dated 9.2.2005 (w.r.e.f. 24.3.2004).](ii)[] [ Clauses (iii) and (iv) renumbered as Clauses (ii) and (iii) by G.S.R. 60(E), dated 9.2.2005 (w.r.e.f. 24.3.2004).] A branch outside India of an authorised dealer being a bank incorporated or constituted in India, may borrow in foreign currency in the normal course of its banking business outside India, subject to the directions or guidelines issued by the Reserve Bank from time to time, and the Regulatory Authority of the country where the branch is located.(iii)[] [Clauses (iii) and (iv) renumbered as Clauses (ii) and (iii) by G.S.R. 60(E), dated 9.2.2005 (w.r.e.f. 24.3.2004). ] An authorised dealer may borrow in foreign currency from a bank or a financial institution outside India, for the purpose of granting pre-shipment or post-shipment credit in foreign currency to his exporter constituent, subject to compliance with the guidelines issued by the Reserve Bank in this regard.
