Wednesday, May 16, 2012

RBI REVIEWS GUIDELINES ON EXTERNAL COMMERCIAL BORROWINGS (ECBs)

Civil Aviation Sector

The Reserve Bank of India (RBI) has decided to allow External Commercial Borrowings
(ECBs) for working capital as a permissible end-use for the civil aviation sector, under
the approval route, subject to some conditions.

Refinancing/Rescheduling of ECB

The Reserve Bank of India (RBI) has decided that the borrowers desirous of refinancing an
existing External Commercial Borrowings (ECBs) can raise fresh External Commercial
Borrowings (ECBs) at a higher all-in-cost/ reschedule an existing External Commercial
Borrowings (ECBs) at a higher all-in-cost under the approval route subject to the condition that the enhanced all-in-cost does not exceed the all-in-cost ceiling prescribed as per the extant guidelines.

Power Sector

The Reserve Bank of India (RBI) has decided that Indian companies in the power sector will be allowed to utilise 40 % of the fresh External Commercial Borrowings (ECBs) raised towards refinancing of the rupee loan/ s availed by them from the domestic banking system, under the approval route, subject to the condition that at least 60 % of the fresh External Commercial Borrowings (ECBs) to be raised should be utilised for fresh capital Expenditure for infrastructure project(s).

Maintenance and operation for Toll systems for Road and highways

The Reserve Bank of India (RBI) has decided that External Commercial Borrowings (ECBs)
would also be allowed for Capital Expenditure under the automatic route for the maintenance
and operation of Toll systems for roads and highways they form part of the original project.

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