Indian companies will find it difficult to raise funds from the overseas market due to the impact of US sovereign debt rating downgrade by Standard and Poor's on global financial market, the Reserve Bank of India has said.

Several lenders and financial institutions including Rural Electrification Corporation (REC), IDBI Bank, Bank of India and Indian Bank have already postponed their overseas offerings, said a central bank note on impact of rating downgrade on India.

“The relaxation in ECB (external commercial borrowings) guidelines offered by the Reserve Bank for repayment of liabilities (by companies) may not be as useful as foreign sources might dry up,” the note to the Subcommittee of Financial Stability and Development Council (FSDC) said.

(This article was published on August 31, 2011)
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