The Reserve Bank of India (RBI) has eased the norms for parking external commercial borrowings (ECBs) to allow companies to keep them as fixed deposits for six months for use at a later stage.
As present, the money raised from abroad meant for rupee expenditure in India had to be brought immediately for credit to the rupee accounts of such borrowers.
The change in norms has been made to provide greater flexibility to ECB borrowers in structuring the drawdown of ECB proceeds and deploying them for permitted end uses.
RBI said the amended ECB policy will come into force with immediate effect.
Such term deposits should be exclusively in the name of the borrower. This deposit could be liquidated as and when required and no charge in any form should be created on these deposits.
The borrowers are allowed to use such proceeds for local sourcing of capital goods, on-lending to Self Help Groups or for micro credit and payment for spectrum allocation.
