Background:-As per the extant External Commercial Borrowing (ECB) policy, Infrastructure Finance Companies (IFCs) i.e. Non-Banking Finance Companies (NBFCs) categorized as IFCs by the Reserve Bank were permitted to avail of ECBs for on-lending to infrastructure sector under approval route subject to satisfaction of prescribed conditions.
Amendments
The following amendments have been made in the ECB guidelines:
- As a measure of liberalization of the existing procedures, IFCs will now be able to avail of ECBs (including outstanding ECBs) up to 50% of their owned funds under automatic route subject to compliance with the prudential guidelines.
- ECBs above 50% of their owned funds will continue to be considered under the approval route.
- All other conditions under the ECB policy, such as USD 500 million limit per company per financial year under the Automatic route, eligible borrower, recognised lender, end-use, all-in-cost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements remain unchanged.
Source: A.P. (DIR Series) Circular Nos. 51 dated 11 May 2010
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