Infrastructure, not finance

IBC process hampered more by delays than lack of funds

The Reserve Bank of India (RBI) has allowed bidders for stressed assets under the Insolvency and Bankruptcy Code (IBC) to raise funds abroad. The RBI relaxed the end-use restrictions for external commercial borrowings (ECBs). Till last week, funds borrowed abroad could not be used to pay back domestic rupee-denominated loans. However, an exception is being made to this for the IBC process. The argument against using ECB for repayments of domestic loans is that it might, through ever-greening and currency risk, introduce additional risk into the economy. However, if the borrowing is for the IBC process, then that is unlikely