In a bid to improve ease of doing business, the Reserve Bank of India (RBI) announced a new framework for external commercial borrowings (ECBs) and rupee-denominated bonds.
All eligible borrowers can now raise external commercial borrowings up to $750 million or equivalent per financial year under the automatic route, replacing the existing sector-wise limits, as per the new framework.
List of eligible borrowers also expanded allowing all entities eligible to receive foreign direct investment to borrow under the ECB framework.
“Tracks I and II under the existing framework are merged as ‘Foreign Currency-denominated ECB’ and Track III and Rupee-denominated Bonds framework are combined as ‘Rupee Denominated ECB’ to replace the current four-tiered structure,” the RBI said in a statement.
For all external commercial borrowings irrespective of the amount, RBI also set the minimum average maturity period at three years.