Friday, January 16, 2015

RBI relaxes ECB norms

The Reserve Bank introduced changes in external commercial borrowings (ECB) norms under
which authorized money changing banks have been allowed to create a charge on securities. "It has been decided that banks may permit creation of charge by pledge on the shares of the JV/WOS (irrespective of the level) of an Indian party in favour of a domestic or overseas lender for securing the funded or non-funded facility under the automatic route," RBI notification said while modifying the Overseas Direct Investments norms. In addition to joint ventures (JVs) and Wholly Owned Subsidiaries (WOSs), the RBI has announced similar concession for pledging of shares in case of step down subsidiary.

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