RBI/2008-09/460
A.P. (DIR Series) Circular No. 64
April 28, 2009
To
All Category-I Authorised Dealer Banks
Madam / Sir,
External Commercial Borrowings (ECB) Policy - Liberalisation
Attention of Authorised Dealer Category - I (AD Category - I) banks is invited
to the A.P. (DIR Series) Circular No. 46 dated January 2, 2009 relating to
External Commercial Borrowings (ECB) and in terms of Para 2 of the circular, it
was decided to dispense with the requirement of all-in-cost ceilings on ECB,
under the approval route, until June 30, 2009. Accordingly, eligible borrowers,
proposing to avail of ECB beyond the prescribed all-in-cost ceilings could
approach the Reserve Bank, under the approval route.
- As announced in
Para 107 of the Annual Policy Statement 2009-10 and
considering the continuing pressure on credit spreads in the international
markets, it has been decided to extend the relaxation in all–in-cost ceilings,
under the approval route, until December 31, 2009. This relaxation will be
reviewed in December 2009.
- The modifications to the ECB guidelines shall come into force with immediate
effect. All other aspects of ECB policy, such as USD 500 million limit per
company per financial year under the Automatic Route, eligible borrower, recognised lender, end-use, average maturity period, prepayment, refinancing of
existing ECB and reporting arrangements remain unchanged.
- Necessary amendments to the Foreign Exchange Management (Borrowing or Lending
in Foreign Exchange) Regulations, 2000 dated May 3, 2000 are being issued
separately.
- AD Category - I banks may bring the contents of this circular to the notice
of their constituents and customers concerned.
- The directions contained in this circular have been issued under sections
10(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
is without prejudice to permissions/approvals, if any, required under any other
law.
Yours faithfully
(Salim Gangadharan)
Chief General Manager –in -Charge