In more liquidity easing measures, the Reserve Bank Tuesday liberalised the end-use stipulations for the external commercial borrowings both for corporates as well as liquidity starved non-banking lenders.
The liberalisation relates to ECBs taken for working capital, general corporate purpose loans or repayment of rupee loans, the central bank said in a statement.
Corporate borrowers will be able to avail of ECBs to repay rupee loans taken for Capex if they are into manufacturing or infrastructure building and classified as SMA-2 or NPA, under any one-time settlement arrangement with lenders, the RBI said.
"Banks are also permitted to sell such loans to eligible ECB lenders, except foreign branches/overseas subsidiaries of domestic banks, if the resultant ECB fund complies with all-in-cost, minimum average maturity period and other relevant ECB norms," the RBI said.
Eligible borrowers will now be allowed to raise foreign debt with a minimum average maturity of 10 years for working capital and general corporate loans, it said, adding borrowing for on-lending by NBFCs for the above maturity and end-uses is also permitted.
Borrowers will also be allowed to raise ECBs with a minimum maturity of seven years for repayment of rupee loans taken to fund Capex, it said, adding borrowings for on-lending by NBFCs for repaying rupee loans will also be permitted.
For repayment of rupee loans availed domestically for purposes other than capex and for on-lending by NBFCs for the same, the minimum average maturity will have to be 10 years.
The RBI also issued a revised circular for bankers capturing the changes.
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