The Reserve Bank of India (RBI) on July 30, 2019, has decided to ease norms relating to External Commercial Borrowings (ECB) for Corporates and NBFCs. This liberalization will allow borrowers to raise ECBs from recognized lenders, except foreign branches or overseas subsidiaries of Indian banks.
With this relaxation, ECBs can be raised with a minimum average maturity period of 10 years for working capital purposes and general corporate purposes and for a minimum average maturity period of 7 years for repayment of Rupee loans availed domestically for capital expenditure. Further, NBFCs are now permitted to borrow for on-lending above the maturity, end-uses and for the repayment of rupee loans. This relaxation will permit corporate borrowers to avail ECB under any scheme of one-time settlement for repayment of Rupee loans availed domestically for capital expenditure in manufacturing and infrastructure sector and classified as SMA-2 or NPA.
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