WorksheetsECB FDI ODI
Total questions: 42
Worksheet time: 42mins
Name
Class
Date
1.
1. Who does not have a direct role in FDI
a)
Department of Industrial Policy and Promotion(DIPP)
b)
Ministry of Commerce and Industry
c)
RBI
d)
Ministry of External Affairs
2.
Which is not correct about Depository Receipt
a)
It is a negotiable security issued outside India
b)
It is issued by a Depository Bank on behalf of an Indian Company
c)
It represents Local rupee denominated equity shares of the company
d)
None of these.
3.
Which is correct about Foreign Currency Convertible Bonds:
a)
It is a bond issued by an Indian Company expressed in foreign currency
b)
) the principal and interest of which is payable in foreign currency
c)
It can be subscribed by a non resident entity.
d)
All the above
4.
Who can not invest under automatic route in India
a)
an NRI
b)
a citizen of Bangladesh
c)
OCBs
d)
Citizens of Nepal and Bhutan
5.
Foreign Direct Investment is not prohibited in which sectors
a)
Gambling
b)
Nidhi Company
c)
Textile
d)
Atomic Energy
6.
An Indian Company receiving investment from outside India should report the details to RBI not later than
a)
60 days from the date of receipt
b)
30 days from the date of receipt
c)
15 days from the date of receipt
d)
None
7.
FDI is a …………….transaction
a)
Capital account
b)
Current Account
c)
Revenue account
d)
None of these
8.
For remittance proceeds on winding up/liquidation of companies which is required:
a)
Tax clearance certificate from Income Tax department
b)
Auditors confirmation that all liabilities in India have been fully paid or adequately provided for
c)
Auditors certificate to the effect that the winding up is in accordance with the provisions of the Companies act as applicable
d)
All the above
9.
Which can not be an Investment Vehicle?
a)
Real Estate Investment Trusts (REIT)
b)
Infrastructure Investment Trusts (InvIts)
c)
Alternative Investment Funds (AIF)
d)
None of these
10.
Which is correct about Foreign Institutional Investor:
a)
an entity established or Incorporated outsisde India
b)
It proposes to make investment in India
c)
It has to register itself as a FII in accordance with SEBI (Foreign Institutional Investor) Regulations 1995.
d)
All the above
11.
Which is correct:
a)
Annual Return on Foreign Liabilities and Assets (section-3) should be filed on annual basis.
b)
The above return is to be submitted by 15th of July every year.
c)
The above return is to be filed with RBI
d)
All the above
12.
What is the all-in-cost ceiling for ECBs over the benchmark rate ?
a)
300 basis points
b)
350 basis points
c)
400 basis points
d)
450 basis points
13.
What is the maximum prescribed ratio of ECB liability to Equity for ECB raised from direct foreign equity holder?
a)
0.20902777777777778
b)
0.08402777777777777
c)
0.2923611111111111
d)
0.25069444444444444
14.
The prescribed All-in-cost does not include :
a)
Rate of interest
b)
Commitment fees
c)
Other fees and expenses
d)
Guarantee fee
15.
LRN stands for:
a)
Loan Repayment Number
b)
Loan Registration Number
c)
Loan Regulation Number
d)
Loan Retention Number
16.
Who issues LRN?
a)
Authorised dealer
b)
DGFT
c)
RBI
d)
FIPB
17.
What is the minimum average maturity period for INR denominated ECB?
a)
3 Years
b)
5 Years
c)
7Years
d)
10 Years
18.
In Which form , ECB can not be raised under automatic route?
a)
Bank Loan
b)
FCCB
c)
FCEB
d)
Financial Lease
19.
Which entities are not permitted to raise ECB under Track I?
a)
Manufacturing companies
b)
SIDBI
c)
Real Estate Investment Trusts
d)
d) Shipping and airlines companies
20.
ECB can be raised in
a)
Dollar only
b)
Euro only
c)
Rupee only
d)
any freely convertible foreign currency as well as INR.
21.
What are the hedging requirement for raising ECB?
a)
ECB exposure (principal plus coupon) should be 75% hedged.
b)
ECB exposure (principal plus coupon) should be 100% hedged
c)
ECB exposure (only coupon) should be 100% hedged
d)
ECB exposure (only principal ) should be 100% hedged
22.
Who is authorized to permit raising of ECB under approval route?
a)
AD category One banks
b)
RBI
c)
DGFT.
d)
FIPB
23.
Can an entity under JLF or Corporate Debt Restructuring (CDR) be permitted to raise ECB.
a)
Can not be permitted
b)
Can be permitted with the consent of RBI only
c)
Can be permitted only with explicit permission of JLF/CDR Empowered committee.
d)
d. Can be permitted only by Finance Ministry
24.
Who is primarily responsible for compliance of guidelines applicable to ECB:
a)
AD category One
b)
RBI
c)
Borrower
d)
DGFT
25.
What is the all-in-cost ceiling for raising Trade credits over 6 month LIBOR
a)
300 bps
b)
350 bps
c)
250 bps
d)
No cap prescribed
26.
Who can raise ECB for working capital finance ?
a)
Manufacturing company
b)
Airline company
c)
Real estate company
d)
None
27.
NBFC company can raise rupee denominated ECB for:
a)
On lending for any activities
b)
providing hypothecated loans to domestic entities for acquisition of capital goods
c)
providing capital goods to domestic entities by way of lease and hire-purchases.
d)
All the above.
28.
Frame work for raising loans through ECB comprises;
a)
Tracks I and II
b)
Tracks I,II and III
c)
Tracks II and III
d)
None
29.
Which of the following are permitted to raise ECB:
a)
Housing finance companies regulated by NHB
b)
Port Trust Companies under the Major Port trust Act 1963
c)
None of these
d)
both a) and b)
30.
Which of the following end uses for ECB proceeds is permitted
a)
Investment in Capital Market.
b)
Equity Investment
c)
Repayment of Rupee loans
d)
None of these.
31.
Which of the forms of borrowing is not permitted under automatic route:
a)
Suppliers credit
b)
financial Lease
c)
FCCBs
d)
FCEBs
32.
What is the individual limits of ECBs that can be raised by Companies in software development sector :
a)
USD 750 mio
b)
USD 200 mio
c)
USD 500 mio
d)
None of these.
33.
Which is not correct in relation to ECBs:
a)
AD category I banks may approve changes/modification in the draw-down and repayment schedule.
b)
AD category I banks may approve changes/modification in the currency of borrowing.
c)
AD category I bank can be changed subject to no objection from the existing AD Category I bank.
d)
Changes in the name of the borrowing company can not be permitted.
34.
Which is not correct in relation to Rupee denominated bonds overseas:
a)
Eligible resident entities can issue only plain vanilla Rupee bonds.
b)
It can be issued only in FATF compliant financial Centres.
c)
The bonds can be either placed privately or listed on exchanges as per host country regulation
d)
Indian Banks can not issue Rupee denominated bonds overseas.
35.
Which is not correct in relation to borrowing in foreign currency by persons other than an authorized dealer:
a)
A person resident in India may borrow for execution of projects outside India and for exports subject to certain conditions.
b)
An importer in India may for import of goods in to India,avail of foreign currency credit from overseas supplier.
c)
An individual resident in India may borrow a sum not exceeding USD 500000 or its equivalent from his close relatives out side India.
d)
None of these.
36.
Which is not correct in relation to lending in foreign currency by persons other than an authorized dealer:
a)
An Indian entity may lend to its wholly owned subsidiary or joint venture abroad constituted in accordance with the provisions of FEM( Transfer or issue of foreign security )Regulations 2000
b)
Select Institutions like EXim Bank,IDBI,IFCI,SIDBI etc may extend loans to their constituents in India out of foreign currency borrowings raised by these institutions with the approval of the Central Government for the purpose of onward lending.
c)
Indian companies in India cannot grant loans to the employees of their branches outside India .
d)
None of these.
37.
Which is not a condition to be fulfilled for conversion of ECBs, including those which are matured but unpaid:
a)
The activity of the borrowing company is covered under the automatic route for Foreign Direct Investment (FDI) or approval from the Foreign Investment Promotion Board (FIPB), wherever applicable, for foreign equity participation has been obtained as per the extant FDI policy;
b)
The conversion, which should be with the lender’s consent and without any additional cost, will not result in breach of applicable sector cap on the foreign equity holding;
c)
Applicable pricing guidelines for shares are not applicable;
d)
Consent of other lenders, if any, to the same borrower is available or atleast information regarding conversions is exchanged with other lenders of the borrower.
38.
Which is not correct relating to refinancing of existing ECB with fresh ECB ?
a)
The fresh ECB is raised at a lower all-in-cost.
b)
Residual maturity is not reduced.
c)
Overseas branches/subsidiaries of Indian banks are permitted only to refinance ECBs of highly rated (AAA) corporates as well as Navratna and Maharatna PSUs, provided the outstanding maturity of the original borrowing is not reduced and all-in-cost of fresh ECB is lower than the existing ECB.
d)
d. Partial refinance of existing ECBs is not permitted
39.
Which statement is not correct about ECBs?
a)
The designated AD Category I banks may directly approach DSIM for cancellation of LRN for ECBs contracted, subject to ensuring that no draw down against the said LRN has taken place and the monthly ECB-2 returns till date in respect of the allotted LRN have been submitted to DSIM.
b)
The designated AD Category I banks may approve requests from ECB borrowers for change in end-use in respect of ECBs availed of under the automatic route, provided the proposed end-use is permissible under the automatic route as per the extant ECB guidelines.
c)
The designated AD Category I banks can not approve reduction in the amount of ECB
d)
The designated AD Category I banks may approve requests from ECB borrowers for changes (decrease/increase) in all-in-cost of the ECBs irrespective of the number of occasions subject to the applicable ECB norms for automatic route.
40.
Permitted changes in ECB parameters should be reported to RBI within which period?
a)
7 days
b)
prior permission of RBI should be obtained.
c)
10 days
d)
None of these
41.
A borrower can approach for Loan Regisration Number :
a)
through his AD category I Bank
b)
directly to RBI
c)
Directly to Ministry of Finance
d)
None of these
42.
Regarding end use of funds raised through ECB, there is
a)
a negative list for all tracks
b)
There is a Positive list of all tracks
c)
There is both Positive and negative list
d)
None of these
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