RBI further updates Master Direction on External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers and Persons other than Authorised Dealers

Reserve Bank of India (RBI) has further updated the Master Direction on External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers and Persons other than Authorised Dealers vide dated May 09, 2018.

Vide this update-

·       Housing Finance Companies, regulated by the National Housing Bank, Port Trusts constituted under the Major Port Trusts Act, 1963 or Indian Ports Act, 1908 can now raise ECB’s under Track I

·       In case the ECB is raised from direct equity holder, the individual ECB limits will also subject to ECB liability. The ECB liability of the borrower (including all outstanding ECBs and the proposed one) towards the foreign equity holder should not be more than 7 times of the equity contributed by the latter. This ratio will not be applicable if total of all ECBs raised by an entity is up to USD 5 million or equivalent.

·       The all-in-cost ceiling for Rupee denominated bonds will be 450 basis points over the prevailing yield of the Government of India securities of corresponding maturity.

[RBI/FED/2015-16/15 FED Master Direction No.5/2015-16]

URL: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/15MDC8CEB9A7BDE64745B9BE1DCEC3293CA1.PDF