RBI simplifies norms related to ECB

Simplifying external commercial borrowing norms, RBI today delegated powers to banks to approve requests from borrowers for extension of matured but unpaid ECB.
Under the extant ECB guidelines, banks can approve requests from borrowers for changes in repayment schedule during the tenure of the ECB.
"To simplify the procedure relating to ECB, it has been decided to delegate the powers to...Banks to approve requests from borrowers for extension of matured but unpaid ECB (subject to certain conditions," the central bank said in a notification.
Further, powers have also been delegated to banks to approve cases of conversion of matured but unpaid ECB into equity.

"It should also be noted that if the ECB borrower concerned has availed credit facilities from the Indian banking system including overseas branches/subsidiaries, any extension of tenure/conversion of unpaid ECBs into equity shall be subject to applicable prudential guidelines...," it added.
In another notification, the RBI said that on a review and in consultation with Government, it has been decided that the permitted trade transaction, under the Rupee Drawing Arrangements should not exceed Rs 15 lakh per transaction.

Meanwhile, in a separate statement, RBI said that its Central Board chaired by Governor Urjit Patel today reviewed the prevaling domestic and global situation.

"The Board reviewed the current economic situation, global and domestic challenges and other specific areas of operations of the Reserve Bank of India," the central bank said in a statement.
Besides Deputy Governors R Gandhi, S S Mundra and N S Vishwanathan, the other Directors of the Central Board present at the meeting were Nachiket M Mor, Bharat N Doshi and Sudhir Mankad.
The meeting was attended by Government nominee director on the Central Board Anjuly Chib Duggal, Secretary in the Department of Financial Services.
In another statement, the central bank said that a fine of Rs 1 crore has been slapped on Credit Agricole Corporate and Investment Bank (India) for violating its norms.

The bank was involved in providing a host of services to and earning fees from its outsourcing agency Credit Agricole CIB Services Pvt. Ltd, RBI said.
"As these activities were not permissible under Section 6(1) of the Banking Regulation Act, 1949, a Show Cause Notice was served on the bank for violation of Section 6 of the Banking Regulation Act, 1949," RBI said in a release.