The Reserve Bank of India (RBI) has relaxed rules for corporates to access ECB (external commercial borrowings) route to raise funds.
The apex bank has now permitted companies which are under investigation by assorted law-enforcing authorities to raise funds through the ECB window under the automatic route.
Till now, such companies are not allowed to access ECB under the automatic route. Any request by such corporates for ECB was usually examined by the RBI under the approval route.
Automatic route
“On a review, it has been decided to permit all entities to avail of ECBs under the automatic route as per the current norms, notwithstanding the pending investigations /adjudications / appeals by the law enforcing agencies, without prejudice to the outcome of such investigations / adjudications / appeals,’’ the RBI said.
“If the borrowing company indicates about the pending investigations / adjudications / appeals, an authorised dealer while approving the proposal shall intimate the agencies concerned by endorsing the copy of the approval letter,” the RBI said. The same procedure would be followed by the apex bank while approving such proposals.
The relaxation to the ECB guidelines comes into force with immediate effect. “All other aspects of the ECB policy, under the automatic route such as amount of ECB, eligible borrower, recognised lender, end-use, all-in-cost ceiling, average maturity period, pre-payment, refinancing of existing ECB, and reporting arrangements, however will remain unchanged.
