Multi-state realty co-ops may seek external funds

Multi-state co-operatives engaged in manufacturing in the realty sector will now be able to access external commercial borrowings (ECBs)under the "approval route" for raising funds.

The existing approval route applies to the ECB proposals from financial institutions dealing exclusively in infrastructure or export finance such as IDFC, IL&FS, Power Finance Corporation, Power Trading Corporation, IRCON and EXIM Bank.

The proposals are considered by the Reserve Bank of India on merit. Banks and financial institutions which had participated in the textiles or steel sector restructuring packages also have to go through the approval route.

An official statement today added that only such multi-state co-operative societies, financial solvency and up-to-date audited balance sheet will have this option. An amendment to this effect will be made to the current guidelines.

The amendment in the ECB policy will come into force on the date of notification of regulations issued by the RBI under the Foreign Exchange Management Act, 1999.

The release said the amendments were being carried out following representations from various organisations. The borrower of such ECB will comply with all parameters of ECB guidelines, such as recognised lender, permitted end-use, average maturity period, and all-in-cost ceiling.