New Delhi: Welcoming the Reserve Bank of India's (RBI) decision to further revise the framework for external commercial borrowing (ECB) by relaxing the end-use restrictions with regard to working capital, general corporate purpose and repayment of Rupee loans, FICCI said that it will allow greater access of funds for corporates and non-banking finance companies and will help in easing the current liquidity conditions.
Sandip Somany, President, FICCI said, "The relaxation of restrictions on the end-use of ECB for corporate borrowers is a very positive move taken by RBI which will go a long way in improving the present liquidity situation in the economy."
"These measures will help in reviving the growth of several sectors which are presently facing challenges due to lack of adequate capital. Such timely measures are important to provide the much-needed push to the slowing economy," said Somany.
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Eligible borrowers have been allowed to raise ECBs from recognised lenders, with minimum average maturity period of 10 years for working capital purposes and general corporate purposes and with minimum average maturity period of 7 years for repayment of Rupee loans availed domestically for capital expenditure as also by NBFCs for on-lending for the same purpose.
For repayment of Rupee loans availed domestically for purposes other than capital expenditure and for on-lending by NBFCs for the same, the minimum average maturity period of the ECB is required to be 10 years.
Eligible corporate borrowers have also been permitted to avail ECB for repayment of Rupee loans availed domestically for capital expenditure in manufacturing and infrastructure sector and classified as SMA-2 (special mention account) or NPA, under any one-time settlement arrangement with lenders.