Rbi To Clear Applications For Ecbs Under $3m

According to an official finance ministry release, these changes to the ECB guidelines will come into effect from December 15.

Earlier these applications were processed by the department of economic affairs in the finance ministry.

This, however, required additional approval for formal clearance under the Foreign Exch-ange Regulation Act (Fera).

Applications received in the ECB division of the finance ministry before December 15 will be processed in the ministry, the finance ministry release said.

Earlier this year the finance ministry had opened this new window to raise up to $3 million of ECBs at a minimum maturity of three years.

 

The borrower was free to utilise the proceeds for rupee expenditure, with the caveat that only one such loan was outstanding at any point of time.

A number of companies have availed themselves of the facility in view of the flexibility in terms of both maturity and end-use.

As on November 30, the ministry had sanctioned 324 loans amounting to $607.8 million.

Earlier, the small borrowers used the on-lending window of financial institutions, to availing of foreign currency credit.

The latest move has simplified the procedure which small and medium-sized firms must follow to make external commercial borrowings by delegating approval authority to the Reserve Bank of India.