MUMBAI (Reuters) - The Reserve Bank of India on Wednesday relaxed the minimum maturity tenure for banks' foreign currency borrowings' to one year from three years, in order to use the central bank's swap facility which was set up to support the ailing rupee.
The RBI, however, said the relaxation is only applicable while the swap window remains open until November 30. After that, banks' overseas borrowings above 50 percent of their Tier I capital will have to be of minimum maturity of three years, it said.
The RBI set up the swap window for banks earlier this month saying they can borrow overseas up to 100 percent of their Tier 1 capital level, although any loan over 50 percent of that level must be for at least three years.
Under the plan, the central bank will offer to exchange foreign currency for rupees at a rate below market rates for banks who raise these funds through overseas borrowings.
(Reporting by Neha Dasgupta; Editing by Susan Fenton)
