To facilitate long-term fund raising by infrastructure companies, industry body Assocham has demanded easing of end-use restrictions for issuance of commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs).
"Assocham has recommended permitting infrastructure companies to use the proceeds of the ECBs/FCCBs for repayment of rupee loans and for infusion of capital into project special purpose vehicles (SPVs)/sector holding companies in form of equity/debt/subordinate debt," the chamber said in a note submitted to Finance Minister Arun Jaitley.
The industry body pointed out that many global sovereign wealth funds (SWFs) are approaching infrastructure companies for ECBs/FCCBs funding which can be a good source of foreign exchange inflows to India.
"Considering that SWFs are government-owned financial institutions, we have urged the Finance Minister to permit them as recognized lenders since they are not explicitly mentioned as the same in RBI circular," Assocham stated.
