RBI liberalizes External Commercial Borrowing Policy

Sep 20, 2018 | by Avantis RegTech Legal Research Team

The Reserve Bank of India (RBI) vide notification dated September 19, 2018 has liberalized External Commercial Borrowing (ECB) Policy as following:

(i)                  ECBs by companies in manufacturing sector:

As per the extant norms, ECB up to USD 50 million or its equivalent can be raised by eligible borrowers with minimum average maturity period of 3 years. It has been decided to allow eligible ECB borrowers who are into manufacturing sector to raise ECB up to USD 50 million or its equivalent with minimum average maturity period of 1 year.

(ii)                Underwriting and market making by Indian banks for Rupee denominated bonds (RDB) issued overseas:

Presently, Indian banks, subject to applicable prudential norms, can act as arranger and underwriter for RDBs issued overseas and in case of underwriting an issue, their holding cannot be more than 5 per cent of the issue size after 6 months of issue. It has now been decided to permit Indian banks to participate as arrangers/underwriters/market makers/traders in RDBs issued overseas subject to applicable prudential norms.

(iii)               All other provisions of the ECB policy shall remain unchanged. AD Category - I banks should bring the contents of this circular to the notice of their constituents and customers.

[RBI/2018-19/48 A.P. (DIR Series) Circular No.9]

URL: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NT480A7F93682BC84156B82F4AD508937A0C.PDF



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