ECB POLICY AMENDED
On a review of the prevailing macroeconomic conditions and developments in international financial
markets, the Reserve Bank of India (RBI) has decided to modify some aspects of the External Commercial Borrowings (ECB) policy as indicated below:
Amendments with immediate effect
markets, the Reserve Bank of India (RBI) has decided to modify some aspects of the External Commercial Borrowings (ECB) policy as indicated below:
Amendments with immediate effect
- ECB for the NBFC Sector
As per the current ECB norms, Non-Banking Finance Companies (NBFCs), which are exclusively involved in the financing of the infrastructure sector, are permitted to avail of ECBs from multilateral / regional financial institutions and Government owned development financial institutions for on-lending to the borrowers in the infrastructure sector under the approval route. It has been decided with immediate effect to allow NBFCs exclusively involved in financing the infrastructure projects to avail of ECB from the recognized lender category including international banks under the approval route, subject to complying with the prudential standards prescribed by the RBI.
- ECB for Spectrum in the Telecommunication Sector
Payment for obtaining license/permit for 3G Spectrum is considered an eligible end - use for
the purpose of ECB under the automatic route. It has now been decided to permit eligible borrowers in the telecommunication sector to avail of ECB for the purpose of payment for Spectrum allocation.
Amendments with effect from 1st January 2010
- All-in-cost ceilings
It has been decided to withdraw the existing relaxation in the all-in-cost ceilings under the
approval route with effect from1st JANUARY 2010. Accordingly, the all-in-cost ceilings under
the approval route for the ECBs, where loan agreements have been signed on or after 1st January, 2010 will be as under:
Average Maturity Period 3 - 5 years
Over 5 years
All -in-cost Ceilings
over six month Libor*
300 basis points
500 basis points
- Integrated township
It has been decided to extend the current policy until December 31, 2010, under the approval
route. All other terms and conditions remain unchanged.
Buyback of the Foreign Currency Convertible Bonds (FCCBs)
It has been decided to discontinue the facility with effect from January 1, 2010.
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