External Commercial Borrowings (ECB) Policy – Liberalisation

External Commercial Borrowing Option 2

RBI in consultation with the Government of India liberalized some aspects of the ECB policy including policy on Rupee denominated bonds as indicated below:

(i) ECBs by companies in manufacturing sector: 

As per the extant norms, ECB up to USD 50 million or its equivalent can be raised by eligible borrowers with minimum average maturity period of 3 years. It has been decided to allow eligible ECB borrowers who are into manufacturing sector to raise ECB up to USD 50 million or its equivalent with minimum average maturity period of 1 year.

(ii) Underwriting and market making by Indian banks for Rupee denominated bonds (RDB) issued overseas: 

  1. Presently, Indian banks, subject to applicable prudential norms, can act as arranger and underwriter for RDBs issued overseas and in case of underwriting an issue, their holding cannot be more than 5 per cent of the issue size after 6 months of issue. It has now been decided topermit Indian banks to participate as arrangers/underwriters/market makers/traders in RDBs issued overseas subject to applicable prudential norms.
  1. All other provisions of the ECB policy shall remain unchanged. AD Category – I banks should bring the contents of this circular to the notice of their constituents and customers.

Click here for ECB Circular on ECB Policy Liberalisation dtd 19.09.2018

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