New external commercial borrowings (ECB) norms being finalised by the Finance Ministry are likely to introduce new lenders, such as pension and sovereign funds, that companies can tap into and lower costs.
“Discussions are being initiated over the draft framework proposed by the Reserve Bank of India as well as the comments on it. The final norms are likely to be unveiled by the month end or early December,” said a person familiar with the development, adding that the focus will be on improving the ease of doing business in the country.
The Finance Ministry, sources said, is largely in line with the RBI on the proposal to allow firms to raise long-term funds of 10-year maturity via the ECB route as against the current limitation of five years.
Additionally, companies may also be permitted to borrow more using the route — up to $50 million for loans of three-year maturity, and over $50 million for those of five-year maturity.
Further, more avenues for long-term lending will be recognised, including overseas regulated financial entities, pension funds, sovereign wealth funds and insurance funds, in the expectation that it may help channel more money into infrastructure projects.
The Finance Ministry is also understood to be agreeable to the proposal to introduce a negative list of end-uses for long term borrowings of over 10 years.
The cost of all-in borrowings is yet to be decided, sources said, adding that it is likely to be finalised soon.
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“Discussions are being initiated over the draft framework proposed by the Reserve Bank of India as well as the comments on it. The final norms are likely to be unveiled by the month end or early December,” said a person familiar with the development, adding that the focus will be on improving the ease of doing business in the country.
The Finance Ministry, sources said, is largely in line with the RBI on the proposal to allow firms to raise long-term funds of 10-year maturity via the ECB route as against the current limitation of five years.
Additionally, companies may also be permitted to borrow more using the route — up to $50 million for loans of three-year maturity, and over $50 million for those of five-year maturity.
Further, more avenues for long-term lending will be recognised, including overseas regulated financial entities, pension funds, sovereign wealth funds and insurance funds, in the expectation that it may help channel more money into infrastructure projects.
The Finance Ministry is also understood to be agreeable to the proposal to introduce a negative list of end-uses for long term borrowings of over 10 years.
The cost of all-in borrowings is yet to be decided, sources said, adding that it is likely to be finalised soon.
To get more info on how to invest in India through external commercial borrowings (ECB) routes contact us click here
Company Secretary GAURAV SHARMA+919990694230 Email us [email protected]
https://gauravsharmaassociates.wordpress.com https://femaindiaservices.wordpress.com
Connect with our Facebook Page:- Click and Like our Page https://www.facebook.com/gauravdelhiravpage
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