External Commercial Borrowings Policy -RBI relaxes the end-use conditions of the ECB policy-January 2010

January 25, 2010: As per the extant policy, eligible borrowers in the telecommunication sector are permitted to avail of ECB for the purpose of payment for spectrum allocation, under the automatic route. Keeping in view the large outlay of funds required to be paid directly to the Government within a limited period of time, it has been decided to make a one-time relaxation in the end-use conditions of the ECB policy.

3. Accordingly, the payment for spectrum allocation may initially be met out of Rupee resources by the successful bidders, to be refinanced with a long-term ECB, under the approval route, subject to the following conditions:

The ECB should be raised within 12 months from the date of payment of the final installment to the Government;

The designated AD - Category I bank should monitor the end-use of funds;

Banks in India will not be permitted to provide any form of guarantees; and

All other conditions of ECB, such as eligible borrower, recognized lender, all- in-cost, average maturity, etc, should be complied with.

4. Eligible borrowers in the telecommunications sector proposing to fund the payment for Spectrum allocation directly out of the proceeds of the ECBs may continue to avail of the ECBs under the automatic route as per the extant policy.

5. All other aspects of ECB policy, such as USD 500 million limit per company per financial year under the automatic route, eligible borrower, recognised lender, end-use, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements remain unchanged.

ECB policy eased for Infrastructure Finance Cos-May 2010 ...Click here
RBI gives more power to banksfor ECB-February 2010 ...Click here
RBI relaxes the end-use of ECB policy-January 2010 ...Click here
RBI tightens some ECB norms for companies-Dec 2009 ...Click here
ECB policy relaxed for SEZ and NBFCs (June 2009) ...Click here
ECB Guidelines revision in January 2009 ...Click here
ECB Guidelines revision in October 2008 ...Click here
ECB Guidelines revision in September 2008 ...Click here

Special section on External Commercial Borrowings ...Click here





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