RBI/2011-12/519
A. P. (DIR Series) Circular No.
111
April 20, 2012
To
All Category-I Authorised Dealer Banks
Madam / Sir,
External Commercial Borrowings (ECB) Policy
–
Liberalisation and Rationalisation
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to
the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange)
Regulations, 2000, notified vide
Notification No. FEMA 3/2000-RB dated May 3, 2000 and A.P. (DIR Series) Circular No. 5 dated August 1, 2005, as
amended from time to time, relating to External Commercial Borrowings.
2. On a review of the policy related to ECB and keeping in view the
announcements made in the Union Budget for the Year 2012-13, it has been decided
to further rationalize and liberalize the extant guidelines as under:-
(i) 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.
(ii) 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.
3. The modifications to the ECB policy will come into force with immediate
effect. All other aspects of the ECB policy, such as, maximum permissible limit
under the automatic route, eligible borrower, recognised
lender,average maturity, all-in-cost,
prepayment, refinancing of existing ECB and reporting arrangements shall remain
unchanged.
4. AD Category - I banks may bring the contents of this circular to the
notice of their constituents and customers.
5. The directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
are without prejudice to permissions / approvals, if any,
required under any
other law.
Yours faithfully,
(Rashmi Fauzdar)
Chief General
Manager |
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