| External Commercial Borrowings (ECB) – Liberalization |
| In order to boost the liquidity requirement for infrastructure sector , RBI has further liberalized the norms relating to External Commercial Borrowing in the aforesaid sector vide A. P. (DIR Series) Circular No. 111 dated 20th April, 2012 & A. P. (DIR Series) Circular No. 112 dated 20th April, 2012. Brief of which is given below:
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- As per the existing norms, Indian Companies in the infrastructure sector are allowed to utilize 25% of the ECB raised for refinancing of the Rupee loan/s availed by them from the domestic banking system under the approval route. This limit of 25% has now been enhanced from to 40%, subject to the condition that at least 60% of the fresh ECB proposed to be raised should be utilized for fresh capital expenditure for infrastructure project(s).
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- External Commercial Borrowing would now be allowed under the automatic route for the purpose of maintenance and operations of toll systems for roads and highways provided they form part of the original project.
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- Borrowers of an existing ECB are now allowed to refinance/ reschedule it by raising fresh ECB with all-in-cost higher to the all-in cost of the existing raised ECB under the approval route with the condition that the higher all-in cost should not exceed the prescribed all-in cost in the ECB guidelines.
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