Saturday 21 April 2012

External Commercial Borrowings (ECB) Policy – Liberalisa​tion and Rationalis​ation

On a review of the policy related to  External Commercial Borrowings (ECB) and keeping in view the announcements made in the Union Budget for the Year  2012-13, the Reserve Bank of India vide circular no.RBI/2011-12/519 A. P.  (DIR Series) Circular No. 111 dated 20th April, 2012, has decided to further rationalize and liberalize the extant  guidelines as under:-

1. Enhancement of Refinancing  limit for Power Sector:-

Indian  companies in the power sector will be allowed to utilise 40 per cent of  the fresh ECB 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 per cent of the fresh ECB proposed to be raised should be utilised for  fresh capital expenditure for infrastructure project(s). All other terms and  conditions relating to refinancing of Rupee loans mentioned in A.P.  (DIR Series) Circular No. 25 dated September 23, 2011 remain unchanged.

2. ECB for Maintenance and Operation  of Toll systems for Roads and Highways:-

ECBs  would also be allowed for capital  expenditure under the automatic  route for the purpose of maintenance and operations of toll systems for  roads and highways provided they form part of the original project.

Please find attached herewith the link for the circular.....

http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=7154&Mode=0

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