SME Times News Bureau | 17 Jan, 2019
The Reserve Bank of India (RBI) on Wednesday announced a new framework
for external commercial borrowings (ECBs) and rupee-denominated bonds in
a bid to improve ease of doing business.
As per the new
framework, all eligible borrowers can now raise external commercial
borrowings up to $750 million or equivalent per financial year under the
automatic route, replacing the existing sector-wise limits.
It
also set the minimum average maturity period at three years for all
external commercial borrowings irrespective of the amount.
Previously,
the RBI had only allowed companies to borrow up to $50 million for
three years. For funds beyond $50 million, companies had to borrow for
at least five years.
"Tracks I and II under the existing
framework are merged as 'Foreign Currency-denominated ECB' and Track III
and Rupee-denominated Bonds framework are combined as 'Rupee
Denominated ECB' to replace the current four-tiered structure," the RBI
said in a statement.
It also expanded the list of eligible
borrowers allowing all entities eligible to receive foreign direct
investment to borrow under the ECB framework.
