RBI's Diwali gift to infra firms: Min ECB holding period pruned to 3 years

This follows a meeting chaired by Prime Minister Narendra Modi in September to review the prevailing economic issues

In a major relief to Indian companies and banks, the Reserve Bank of India (RBI) on Tuesday reduced the minimum average maturity requirement for ECBs raised by eligible borrowers in the infrastructure space, from five years currently to three years.

The RBI explained, ECBs with minimum average maturity period of three to five years in the infrastructure space will have to meet 100 per cent mandatory hedging requirement.

The central bank further clarified that ECBs falling under the aforesaid revised provision but raised prior to the date of this circular will not be required to mandatorily roll-over their existing hedges.