INSUBCONTINENT EXCLUSIVE:
Mumbai: In an attempt to go one step ahead in ease of doing business overseas borrowing norms have been simplified
The Reserve Bank of India has rationalised overseas borrowing norms allowing a uniform borrowing limit of Rs 750 million a year across
It has also broadened scope of borrowers by allowing all entities that are eligible for foreign direct investment (FDI) to borrow through
external commercial borrowing (ECB) route.
The government has been opening up this sector to attract capital flows ever since rupee started
depreciating steeply vis-a-vis dollar since April 2018.The current system of two categories-Track I- medium term ECB of three to five years
to a release by Reserve Bank on Saturday.The Track III, where eligible borrowers are NBFCs and microfinance institutions and rupee
year under automatic route replacing existing sector wise limits.
The list of eligible borrowers has also been expanded and al entities
eligible to receive foreign direct investment can borrow under ECB framework
The minimum average maturity period (MAMP) has been kept at 3 years for all ECBs, irrespective of amount of borrowing instead of multiple
layers in existing framework.
Any entity who is a resident of a country which is FATF or IOSCO compliant will be treated as a recognised
This change increases lending options and allows various new lenders in ECB space, RBI said.
