Moving forward on its avowed objectives of continued liberalisation, the RBI has further modified External Commercial Borrowings Policy (ECB). Translated simply this means that under the revised scheme of things, ECB upto USD 500 million, per borrower-per financial year, s allowed under the Automatic Route for Rupee expenditure and / or foreign currency expenditure for permissible end - uses. Accordingly, the requirement of minimum average maturity period of seven years for ECB more than USD 100 million, for Rupee capital expenditure, by the borrowers in the infrastructure sector, has been dispensed with.
Similarly, certain other policy changes have been introduced for parking the ECB until actual requirement. This is designed to arm borrowers with flexibility - to either keep these funds off-shore in a manner prescribed or keep it with the overseas branches / subsidiaries of Indian banks or to remit these funds to India for credit to their Rupee accounts with AD Category-I banks in India till they are utilised for permissible end-uses.
Obviously such elbow-room would facilitate borrowers by providing a larger basket of options as well more breathing time in business decisions.
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