The Reserve Bank today relaxed norms to help Indian corporates to raise funds in rupees from overseas lenders.
To facilitate external commercial borrowing (ECB) in rupees, RBI said off-shore lenders may enter into swap transactions with their overseas bank which in turn will enter into a back-to-back swap transaction with a bank in India.
Earlier, a non-resident ECB lender was allowed to extend loans in rupees provided the lender mobilises rupees through a swap undertaken with a bank in India.
For the purpose of executing swaps for ECBs denominated in rupees, the ECB lender, "if it desires, may set up a representative office in India," it added.
Also, the continuation of the swap will be subject to the existence of the underlying ECB at all times.
The RBI further said a KYC certification on the end client should also be taken by the bank in India as a one-time document from the overseas bank.
Meanwhile, speaking at an event in New Delhi, RBI Deputy Governor H R Khan said that the central bank is working with the government to simplify and liberalise procedures related to foreign exchange regulations to facilitate ease of doing business in the country.
"Reserve Bank of India in consultation with the Government of India, is working on simplifying, liberalising and rationalising the procedures relating to foreign exchange regulations, including the foreign direct investment, to facilitate ease of doing business," Khan said.
