Business Daily from THE HINDU group of publications
Sunday, Jun 01, 2008
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Business Daily from THE HINDU group of publications Sunday, Jun 01, 2008 ePaper | Mobile/PDA Version | Audio |
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Corporate Corporate - Overseas Borrowings Government - Policy Services sector can access ECBs
Our Bureau
New Delhi, May 31 Companies in the services sector can now raise funds abroad through the external commercial borrowing (ECB) route to meet their business needs. The Government on Saturday announced that borrowers in the services sector - namely hotels, hospitals and software companies – could avail themselves of ECB up to $100 million for import of capital goods under the approval route. Hitherto, borrowers in the services sector were not eligible for ECBs under the approval route. Only the manufacturing and real estate sector could access ECBs. The announcement to allow services sector to borrow monies through ECBs came a day after the Finance Minister, Mr P Chidambaram, hinted that some of the restrictions under the ECB policy could be lifted in the coming days. He had noted that the restrictions placed under the ECB policy in August 2007 were only temporary and for the short term. Allowing services sector to borrow through ECBs also comes close on the heels of the Reserve Bank of India’s decision, announced on May 29, to let companies borrow up to $ 50 million for spending in rupees and allow companies in the infrastructure sector to avail themselves of ECB up to $ 100 million under the approval route. The Foreign Institutional Investors (FII) investment limit in government securities and corporate bonds was also recently increased to $ 5 billion and $ 3 billion respectively. The recent moves to relax the ECB policy comes in the backdrop of sluggish foreign exchange inflows and weakening rupee. Corporates can borrow up to $50 m overseas RBI asks corporates to source funds locally Borrowing abroad made easier More Stories on : Corporate | Overseas Borrowings | Policy
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