INSUBCONTINENT EXCLUSIVE:
RBI liberalised some aspects of the external commercial borrowings policy.MUMBAI: The Reserve Bank of India (RBI) on Thursday liberalised
some aspects of the external commercial borrowings (ECBs) policy including those related to rupee-denominated bonds to help check rupee
"It has been decided to allow eligible ECB borrowers who are into manufacturing sector to raise ECB up to $50 million or its equivalent with
minimum average maturity period of 1 year," the RBI said in a notification
Till date, ECB up to $50 million or its equivalent could be raised by eligible borrowers with minimum average maturity period of three
years.The decision to revise the minimum average maturity period of three years to one year was part of the five measures announced by the
government last week after Prime Minister Narendra Modi held an economic review meeting.Presently, domestic banks can act as arranger and
underwriter for rupee denominated bonds (RDBs), also called masala bonds, issued overseas, and their holding cannot be more than five per
cent of the issue size after six months of issue as an underwriter."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," the central bank said.Last
Monday, the government exempted tax on interest payable by Indian companies to non-residents, including foreign companies, on borrowings
through off-shore rupee denominated bonds issued till March 31, 2019.Till now, interest payable on such bonds issued before July 1, 2020 was
liable for concessional rate of tax of five per cent.These steps, which are aimed at raising the foreign exchange inflow, are part of the
multi-pronged strategy to curb current account deficit (CAD) and rupee depreciation.Last Friday, after the Prime Minister held the economic
review meet, Finance Minister Arun Jaitley announced the government's five measures and also a broad policy decision to curb non-essential
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