RBI permits IBC bidders to raise funds via ECBs to repay existing lenders

The resolution applicants under Corporate Insolvency Resolution Process (CIRP), under the Insolvency and Bankruptcy Code (IBC), may find it attractive to borrow abroad to repay lenders

The Reserve Bank of India on Thursday permitted bidders for insolvent companies to raise funds through external commercial borrowings (ECBs) to repay existing lenders. The access to relatively cheap foreign capital would aid early resolutions and also make the process cost efficient, bankers and legal experts said. According to existing norms, the proceeds of ECBs, in either foreign currency or Indian rupee denominations, are not permitted to be utilised for repayment or for on-lending for repayment of domestic rupee loans.

The resolution applicants under Corporate Insolvency Resolution Process (CIRP), under the Insolvency and Bankruptcy Code (IBC), may find it attractive