Refinancing of External Commercial
Borrowings
RBI/2017-18/116 January
4, 2018 To All Category-I Authorised Dealer
Banks Madam / Sir Refinancing
of External Commercial Borrowings Attention of Authorized Dealer
Category - I (AD Category - I) banks is invited to paragraph 2 of the Statement
on Developmental and Regulatory Policies issued along with the Fifth
Bi-monthly Monetary Policy Statement for 2017-18. In terms of the extant
provisions in paragraphs 2.15 and 2.16 (xiii) of Master
Direction No.5 dated January 1, 2016 on “External Commercial Borrowings,
Trade Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers
and Persons other than Authorised Dealers”, as amended from time to time,
Indian corporates are permitted to refinance their existing External
Commercial Borrowings (ECBs) at a lower all-in-cost. The overseas
branches/subsidiaries of Indian banks are however, not permitted to extend
such refinance. 2. In order to provide a level
playing field, it has been decided, in consultation with the Government of
India, to permit the overseas branches/subsidiaries of Indian banks to
refinance ECBs of highly rated (AAA) corporates as well as Navratna and
Maharatna PSUs, provided the outstanding maturity of the original borrowing
is not reduced and all-in-cost of fresh ECB is lower than the existing ECB.
Partial refinance of existing ECBs will also be permitted subject to same
conditions. 3. All other aspects of the ECB
policy remain unchanged. AD Category - I banks may bring the contents of this
circular to the notice of their constituents and customers. 4. The aforesaid Master
Direction No. 5 dated January 01, 2016 is being updated to reflect the
changes. 5. The directions contained in
this circular have been issued under section 10(4) and 11(2) of the Foreign
Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions / approvals, if any, required under any other law. Yours
faithfully Shekhar
Bhatnagar |
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