Date:30/09/2005 URL: http://www.thehindubusinessline.com/2005/09/30/stories/2005093000620700.htm

Back Payment norms for aircraft lease rentals relaxed

Our Bureau

Mumbai , Sept. 29

PRIVATE airlines can now remit up to $1 million per aircraft towards security deposit for payment of lease rentals for an aircraft or helicopter without a standby letter of credit or a guarantee. In the case of public sector airline companies the limit is $1,00,000.

The Reserve Bank of India on Tuesday, in a notification, announced the relaxing of the rules in response to demands from airline companies.

Earlier, airlines were required to furnish a standby letter of credit or guarantee from an international bank or an authorised dealer in foreign exchange in India against the counter guarantee of an international bank for remittances towards security deposit for payment of lease rentals.

The notification said the airline company must obtain approval from the Ministry of Civil Aviation and the final maturity of the security deposit should not be beyond the date of the last instalment towards lease rental or date of return of the aircraft/helicopter to the lessor.