Indian corporates allowed to borrow up to $750 million overseas in rupees
26 Sep 2011
The Reserve Bank of India (RBI) has permitted Indian corporates to borrow in Indian rupees from their foreign stake holders, both under the automatic and approval routes, thereby further liberalising the external commercial borrowing policy.
The RBI also increased the external commercial borrowing limit under the automatic route to $750 million per year, from the existing $500 million a year.
The revised limit is applicable to all eligible corporates in the real, industrial and infrastructure sectors of the economy, subject to compliance with other ECB guidelines, RBI said in a release today.
For corporates in specified service sectors such as hotel, hospital and software, the new borrowing limit has been doubled to $200 million, from the existing $100 million or equivalent.
The government has already allowed Indian corporates to borrow up to the equivalent of $1 billion in Chinese yuan, thereby expanding the base for external commercial borrowings.
Corporate in the infrastructure sector can avail of ECBs for interest during construction (IDC) as a permissible end-use, both under the automatic and approval routes, as the case may be, subject to IDC being a part of the project cost and is capitalised, RBI said.
