Overseas borrowing: RBI relaxes ECB norms

In a step to move toward fuller capital account convertibility, the Reserve Bank of India (RBI) on Monday liberalised the external commercial borrowing framework by increasing the limit for Indian companies for raising funds — with minimum average maturity of 3 years — to $50 million from $20 million. Companies can also take the ECB route for raising 10-year funds which is capped at five years now. RBI has also expanded the list of overseas lenders to include long term lenders like sovereign wealth funds, pension funds and insurance companies. “The framework for ECB as a means to attract flow of funds from abroad will continue to be a major tool to calibrate the policy towards capital account management in response to evolving macro-economic situation,” RBI said in a press release.