RBI simplifies procedure for external commercial borrowings
Updated: Jan 24, 2015 11:40:21am
Mumbai, Jan 24 (KNN) Reserve Bank of India (RBI) has simplified the procedure for rescheduling or restructuring of External Commercial Borrowing (ECBs).
It has given more power to banks to deal with cases related to change in draw-down and repayment schedules of ECBs subject to conditions, according to a notification issued on Friday.
“On a review, as a measure of simplification of the existing procedure for rescheduling / restructuring of ECBs and in supersession of aforesaid provisions, it has been decided to delegate powers to the designated AD Category-I banks to allow - changes / modifications (irrespective of the number of occasions) in the draw-down and repayment schedules of the ECB whether associated with change in the average maturity period or not and / or with changes (increase/decrease) in the all-in-cost,” the apex bank said.
Further, it has allowed reduction in the amount of ECB (irrespective of the number of occasions) along with any changes in draw-down and repayment schedules, average maturity period and all-in-cost.
In addition, increase in all-in-cost of ECB, irrespective of the number of occasions has been permitted. This measure however is subject to the designated AD Category-I bank ensuring - revised average maturity period and / or all-in-cost is / are in conformity with the applicable ceilings / guidelines; and the changes are effected during the tenure of the ECB.
The central bank has also specified that if the lender is an overseas branch / subsidiary of an Indian bank, the changes shall be subject to the applicable prudential norms.
It has also been decided to delegate powers to the designated AD Category-I banks to permit changes in the name of the lender of ECB after satisfying themselves with the bonafides of the transactions and ensuring that the ECB continues to be in compliance with applicable guidelines, it said.
Further, the AD Category-I banks may also allow the cases requiring transfer of the ECB from one company to another on account of re-organisation at the borrower’s level in the form of merger / demerger / amalgamation / acquisition duly as per the applicable laws / rules after satisfying themselves that the company acquiring the ECB is an eligible borrower and ECB continues to be in compliance with applicable guidelines.
These measures of simplification will be applicable for ECBs raised both under the automatic and approval routes. FCCBs will, however, not be covered within these provisions, it said. (KNN/ES)
It has given more power to banks to deal with cases related to change in draw-down and repayment schedules of ECBs subject to conditions, according to a notification issued on Friday.
“On a review, as a measure of simplification of the existing procedure for rescheduling / restructuring of ECBs and in supersession of aforesaid provisions, it has been decided to delegate powers to the designated AD Category-I banks to allow - changes / modifications (irrespective of the number of occasions) in the draw-down and repayment schedules of the ECB whether associated with change in the average maturity period or not and / or with changes (increase/decrease) in the all-in-cost,” the apex bank said.
Further, it has allowed reduction in the amount of ECB (irrespective of the number of occasions) along with any changes in draw-down and repayment schedules, average maturity period and all-in-cost.
In addition, increase in all-in-cost of ECB, irrespective of the number of occasions has been permitted. This measure however is subject to the designated AD Category-I bank ensuring - revised average maturity period and / or all-in-cost is / are in conformity with the applicable ceilings / guidelines; and the changes are effected during the tenure of the ECB.
The central bank has also specified that if the lender is an overseas branch / subsidiary of an Indian bank, the changes shall be subject to the applicable prudential norms.
It has also been decided to delegate powers to the designated AD Category-I banks to permit changes in the name of the lender of ECB after satisfying themselves with the bonafides of the transactions and ensuring that the ECB continues to be in compliance with applicable guidelines, it said.
Further, the AD Category-I banks may also allow the cases requiring transfer of the ECB from one company to another on account of re-organisation at the borrower’s level in the form of merger / demerger / amalgamation / acquisition duly as per the applicable laws / rules after satisfying themselves that the company acquiring the ECB is an eligible borrower and ECB continues to be in compliance with applicable guidelines.
These measures of simplification will be applicable for ECBs raised both under the automatic and approval routes. FCCBs will, however, not be covered within these provisions, it said. (KNN/ES)
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