ECBs - liberalisation

RBI has vide its notification dated 19th September, 2018 liberalised the External Commercial Borrowing policy to the following extent:

(i) ECBs by companies in manufacturing sector: As per the extant norms, ECB up to USD 50 million or its equivalent can be raised by eligible borrowers with minimum average maturity period of 3 years. It has been decided to allow eligible ECB borrowers who are into manufacturing sector to raise ECB up to USD 50 million or its equivalent with minimum average maturity period of 1 year.

(ii) Underwriting and market making by Indian banks for Rupee denominated bonds (RDB) issued overseas: Presently, Indian banks, subject to applicable prudential norms, can act as arranger and underwriter for RDBs issued overseas and in case of underwriting an issue, their holding cannot be more than 5 per cent of the issue size after 6 months of issue. It has now been decided to permit Indian banks to participate as arrangers/underwriters/market makers/traders in RDBs issued overseas subject to applicable prudential norms.

So this is a boost for manufacturing sector in line with the Make in India policy of the government. 

RBI notification can be found at https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11375&Mode=0