RBI/2008-09/ 190 A. P. (DIR Series) Circular No. 16 dated September 22, 2008
The all-in-cost ceilings for ECBs are modified as follows:
Average Maturity Period | All-in-Cost ceilings over | |
| Existing | Revised |
Three years and up to five years | 200 bps | 200 bps |
More than five years and up to seven years | 350 bps | 350 bps |
More than seven years [mandatory for USD in EXCESS of 100 million] Borrowers in the infrastructure sector can avail ECB UPTO 500 million per financial year under Approval Route | 350 bps | 450 bps |
* for the respective currency of borrowing or applicable benchmark |
The amendments to the ECB guidelines will come into force with immediate effect.
At present, borrowers in the infrastructure sector are allowed to avail ECB up to USD 100 million per financial year for Rupee expenditure for permissible end-uses under the Approval Route. Considering the huge funding requirements of the sector, particularly for meeting Rupee expenditure, the existing limit of USD 100 million has been raised to USD 500 million per financial year for the borrowers in the infrastructure sector for Rupee expenditure under the Approval Route. ECBs in excess of USD 100 million for Rupee expenditure should have a minimum average maturity period of 7 years.
All other aspects of the ECB policy such as USD 500 million limit per borrower per financial year under the Automatic Route, eligible borrower, recognised lender, end-use of foreign currency expenditure for import of capital goods and overseas investments, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements remain unchanged. The existing limit of USD 50 million for Rupee expenditure under the Approval Route for borrowers other than those in the infrastructure sector also remains unchanged.
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