ECB rules for infra finance cos relaxed

January 07, 2013 11:44 pm | Updated July 05, 2016 01:42 pm IST - MUMBAI:

Relaxing the external commercial borrowing (ECB) norms, the Reserve Bank of India on Monday said non-banking finance companies (NBFCs) operating as infrastructure finance companies (IFCs) can now avail themselves of overseas borrowings up to 75 per cent of their owned funds without its approval.

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

However, NBFC-IFCs desirous of availing themselves of ECBs beyond 75 per cent of their owned funds would require the approval of the RBI and would, therefore, be considered under the approval route. The RBI move is expected to help such infrastructure finance companies 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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