 "RBI eases ECB norms")
To provide more flexibility in structuring external commercial borrowings (ECBs), the Reserve Bank of India (RBI) has allowed recognised non-resident ECB lenders to extend loans in rupees, subject to riders.
The central bank said lender should mobilise rupees through swaps with a bank in India. Besides, the ECB contract should comply with all other conditions applicable to the automatic and approval routes, as is the case. The overall cost of such ECBs should be commensurate with prevailing market conditions, RBI said.
It added for rupee-denominated ECB swaps, the recognised ECB lender could set up a representative office in India by following the prescribed process in this regard.
The head of treasury of a public sector bank said the central bank's move was a positive for Indian borrowers seeking ECBs. He, however, added it would make the process expensive for non-resident ECB lenders, as they would have to enter into swaps with banks in India.
The central bank said lender should mobilise rupees through swaps with a bank in India. Besides, the ECB contract should comply with all other conditions applicable to the automatic and approval routes, as is the case. The overall cost of such ECBs should be commensurate with prevailing market conditions, RBI said.
It added for rupee-denominated ECB swaps, the recognised ECB lender could set up a representative office in India by following the prescribed process in this regard.
The head of treasury of a public sector bank said the central bank's move was a positive for Indian borrowers seeking ECBs. He, however, added it would make the process expensive for non-resident ECB lenders, as they would have to enter into swaps with banks in India.