Rescheduling norms for ECB simplified

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Simplifying ECB norms, the RBI today allowed banks to re-schedule loans raised through external commercial borrowings by companies.

"As a measure of simplification of existing procedures, it has been decided to delegate the power to the designated AD Category – I bank to allow re-schedulement of ECB due to changes in draw-down schedule and/or repayment schedule," the Reserve Bank of India (RBI) said in a notification.

Earlier, any elongation or rollover in repayment on expiry of the original maturity of the ECB required the prior approval of the RBI.

The new procedures on external commercial borrowings (ECB) have come into operations with immediate effect.

However, the re-scheduling is allowed only once, before the maturity of the ECB, the RBI added.

The facility will be available for ECBs raised both under the automatic and approval routes.

Another notification said Indian companies will not be permitted to raise ECB from overseas branches/ subsidiaries of Indian banks for refinance or repayment of the rupee loans raised from the domestic banking system in respect of spectrum allocation and scheme of take-out financing.

The restriction is also on repayment of existing rupee loans for companies in infrastructure sector.

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