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Our Bureau

Mumbai , April 2

THE Reserve Bank of India has clarified that external commercial borrowings (ECB) cannot be raised for working capital, general corporate purpose and repayment of existing rupee loan purposes.

The central bank has also clarified that the maximum amount of ECB that can be raised by an eligible borrower under the automatic route is $500 million or its equivalent during a financial year, up from the previous limit of $50 million.

"At present, borrowers who had availed themselves of ECB under the erstwhile $5-million scheme with specific approval of the Reserve Bank of India, approach the RBI for elongation of repayment period," said the notification.

RBI has decided to delegate general permission to the designated bank to approve such elongation, provided there is a consent letter from the overseas lender for such reschedulement without any additional cost.

More Stories on : Overseas Borrowings | RBI & Other Central Banks

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