RBI proposes substantial changes to ECB norms


The Reserve Bank of India has proposed substantial changes to external commercial borrowing (ECB) norms for companies such as allowing rupee-denominated loans and permission for lenders to hedge in the onshore market.

It has widened the list of eligible investors including pension funds and sovereign wealth funds as well those industries that can raise funds by including real estate investment trusts and infrastructure investment trusts.

“An attempt has now been made to replace the ECB policy with a more rational and liberal framework, keeping in view the evolving domestic as well as global macro-economic and financial conditions, challenges faced in external sector management and the experience gained so far in administering the ECB policy,” RBI said in a statement.

The central bank has also proposed raising the all-in costs for borrowings of more than 10 years with some industries such as real estate prohibited from accessing this avenue.

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