RBI revises ECB rules for long term funding

ECB framework was revised by RBI

ECB framework was revised by RBI
ECB framework was revised by RBI

ECB framework was revised by RBI

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]T[/dropcap]To allow infrastructure firm to borrow up to five years the Reserve Bank of India (RBI) has revised the overseas borrowings or external commercial borrowings (ECBs) framework as the critical need for long-term funding of infrastructure sector in the country.

The RBI said in a statement on Wednesday, “with a minimum average maturity period of five years, subject to 100 percent hedging the Companies in the infrastructure sector, non-banking financial companies -infrastructure finance companies, NBFCs-asset finance companies, holding companies and core investment companies (CICs) are eligible to raise ECBs under Track I of the framework”.

“For ECB purposes, the exploration, mining and refinery activities would also be treated as infrastructure in the revised framework.

For on-lending to infrastructure special purpose vehicles the holding companies and CIC’s are allowed to use External Commercial Borrowings proceeds only.

Irrespective of the amount of borrowing the minimum average maturity of foreign currency convertible bonds/foreign currency exchangeable bonds is five years
In India by registered foreign portfolio investors the ECB framework is not applicable in respect of the investments in non-convertible debentures, said RBI.

ECB framework RBI

Here is the draft of ECB framework.

Notes:
1. IANS

1 COMMENT

  1. Sir’; The world is every moments; thus the business systrem also chabge. let the person business; then it cab give some benifit, The unutilize capital should be utilize in social development. Today unit gives important to interest; but when person can give interest? If He will do some work ; and works should affected to public development; in construction; infrastructure abd technology.
    More then 80% people are living in village; and no infrastructure up to village ; so village people are needy of all kind of technology. The Government is unable to reach up to last man of country. and N.G.O. work is start from last mab of country. The profit should divert in production cost; not on loan amount. Give them low rate intertest loan; so it can work speedy. The construction; infrastructure and technology work. this N.G.O. has to carryout. Need huge amount loan in low rate interest loan. The Project amount is 22;24′;000/- Crore Indian Rupees. The Multipurpose hall; Technical training center; Agriculture center; Gym/Swimming pool. Health center etc; to be provide among the 10 village. sand each Taluka level one office building contain roud about 90 offices; is planed. the cost of Power project; Tram etc. not included in project cost. The Government is unable up to last man of country. and N.G.O. work is start from last man of country. It is long term project; more then 70 years; and 10% profit can be given to finance company with work progress. The N.G.O. need huge amount loan; The loan amount will be convert in Bank as fixed deposit; and original receipt of fixed deposit will be laying with financier. It is safe ; best and 100% secured business. In commercial language it is know as business and in N.G.O. language it is known as to provide technology to poor and needy people. The interest rate should not be affected to loan amount but to construction etc. amount. This system led the India speedy devevelopment; by all kind of technology. and 100% profit cab get, 6/23/2020

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