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RBI policy: Bankrupt companies can repay debt using foreign borrowings

The RBI press release said guidelines in this regard will be issued by the end of February 2019

BS Web Team 

RBI
A Reserve Bank of India (RBI) logo is seen at the gate of its office in New Delhi. Photo: Reuters

In its bi-monthly monetary policy review on Thursday, the of India (RBI) said companies under the insolvency process can borrow abroad to repay the existing lenders. However, such companies can't use this relaxation to borrow from overseas branches/subsidiaries of Indian banks.

Under the present External Commercial Borrowing (ECB) framework, proceeds of ECB denominated in either foreign currency or Indian Rupee (INR), are not permitted to be utilised for repayment or for on-lending for repayment of domestic Rupee loans.

The press release said guidelines in this regard will be issued by the end of February 2019.

First Published: Thu, February 07 2019. 12:09 IST