India allows local firms to prepay forex bonds

India said on Thursday domestic firms would be allowed to prepay existing foreign currency convertible bonds up to September 30, 2003.

A government statement said, "The scheme would be available under the automatic route up to a limit of $100 million if the prepayment is made out of local resources, and without any limit if prepayment is made out of exchange earners' foreign currency funds."

But the government said companies would not be allowed to prepay existing foreign currency bonds by raising fresh external debt.