RBI relaxes ECB norms for infrastructure finance companies
MDT/PTI 08 January 2013

RBI has enhanced the ECB limit for NBFC-IFCs under the automatic route to 75% of their owned funds, including the outstanding ECBs, from 50% of their owned funds

Mumbai: Relaxing the external commercial borrowings (ECBs) norms, the Reserve Bank of India (RBI) said non-banking financial companies (NBFCs) operating as infrastructure finance companies (IFCs) can now avail the overseas borrowings up to 75% of their owned funds without its approval, reports PTI.

 

"On a review, it has been decided to enhance the ECB limit for NBFC-IFCs under the automatic route from 50% of their owned funds to 75% of their owned funds, including the outstanding ECBs," the RBI said.

 

However, NBFC-IFCs desirous of availing ECBs beyond 75% of their owned funds would require the approval of the RBI and will, therefore, be considered under the approval route.

 

The RBI move is expected to help such infrastructure finance companies to raise overseas funds at attractive rates.

 

The Planning Commission envisages the need for investment of $1 trillion to build the country's infrastructure during the Five Year Plan which began this fiscal.

 

The Commission expects half of the funds to come from the private sector.

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