RBI lets dealer banks approve change of lender in external commercial borrowings
09 Sep 2011
The Reserve Bank of India (RBI) has simplified the existing procedures for external commercial borrowings (ECB) by delegating the power of approval to designated category 1 authorised dealer banks.
Authorised banks have now been allowed to approve requests from ECB borrowers with respect to change in the recognised lender without referring it to the RBI.
However, for doing this, the original lender should be an international bank or a multilateral financial institution (such as IFC, ADB, CDC, etc,) or a regional financial institution or a government owned development financial institution or an export credit agency or supplier of equipment, RBI said in a notification today.
New lenders belonging to any one of the above categories may also approve ECB, subject to the authorised dealer ensuring the following conditions:
The new lender is a recognised lender as per the extant ECB norms;
There is no change in the other terms and conditions of the ECB; and