Sunday 28 August 2016
facebook.com/Outlookindia twitter.com/outlookindia digimag.outlookindia.com instagram.com/outlookindia youtube.com/user/OutlookMagazine

RBI Allows ECB Lenders to Extend Loans in Rupees

Mumbai

Relaxing norms for external borrowings, the RBI today allowed ECB lenders can now extend loans in Indian Rupees to domestic businesses.

"With a view to providing greater flexibility for structuring of external commercial borrowings (ECB) arrangements, it has been decided that recognised non-resident ECB lenders may extend loans in Indian rupees," the RBI said in a notification.

The RBI further said for lending in rupees, the lender would have to follow certain conditions, including currency swaps with authorised banks.

"The ECB contract should comply with all other conditions applicable to the automatic and approval routes as the case may be," it added.

Also, the all-in-cost of such ECBs should be commensurate with prevailing market conditions, it added.

The central bank further said that for executing swaps for ECBs denominated in rupees, the lender could also set up a representative office in India.

Fund raised from overseas in domestic currency will help Indian companies to deal with risks associated with currency fluctuation.

Meanwhile, in another notification on transfer of assets and liabilities of Urban Cooperative Banks to commercial banks, the RBI said "the acquiring bank should not incur any loss arising out of the said merger/ transfer of assets and liabilities".

Also, big depositors holding deposits in excess of Rs 1 lakh each will be required to sacrifice in proportion to the deposit erosion of the target bank.

The 2010 circular in this regard has been amended with a view to ensuring that the process of consolidation is undertaken in a transparent manner without affecting the financial health of the acquiring entities and the banking system as a whole.

READ MORE IN:
TAGS: BankingLoansRBI
SECTION: Business
OUTLOOK 03 September, 2014
© Copyright PTI. All rights reserved. Republication or redistribution of any PTI content, including by framing or similar means, is expressly prohibited without their prior written consent.
Download the Outlook ​Magazines App. Six magazines, wherever you go! Play Store and App Store

Post a Comment

You are not logged in, please Log in or Register
  • Daily Mail
THE LATEST ISSUE
CLICK IMAGE FOR CONTENTS
OUTLOOK ON TWITTER
POLLS

In 1999, India and France entered into a $3.5 billion deal for the supply of these submarines. The first of the 6 subs is out on sea trials for the last three months and is to be commissioned later this year. At this stage, a newspaper in Australia has revealed secret data on the submarines, plausibly stolen from India. Indian Defence authorities have ruled out any pilferage of data from India.

POLL STARTED ON: Aug 26, 2016
Quiz
Brazil’s Rio de Janeiro is hosting the 31st Olympic Games from August 5 to 21. This is the first Olympics being held in South America and is going on even as a majority Brazilians are unhappy with their rulers. Here’s a quiz on some random Olympic facts and related trivia.
QUIZ STARTED ON: Aug 11, 2016
Advertisement