RBI relaxes overseas borrowing norms for hotel, healthcare and software sectors
13 August 2010
The Reserve Bank of India (RBI) has revised the guidelines on external commercial borrowings, allowing corporates in the hotel, healthcare and software sectors to avail of ECB beyond $100 million under the approval route.
The facility would be available for foreign currency and/or rupee capital expenditure for permissible end-uses. The proceeds of the ECB should, however, not be used for acquisition of land, RBI said in a release today.
At present, corporates in the service sector, viz, hotels, hospitals and software firms are allowed to avail of ECB up to $100 million per financial year under the automatic route, for foreign currency and/or rupee capital expenditure for permissible end-uses.
The modifications to the ECB guidelines will come into force with immediate effect. All other norms of the ECB policy relating to eligible borrower, recognised lender, end-use, all-in-cost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements would remain unchanged, the release said.
Under the extant ECB policy, the all-in-cost ceilings for ECBs, in respect of both automatic as well as approval routes was 300 basis points over 6 months LIBOR for ECBs of 3 years and above and 500 bps over 6 months LIBOR for ECBs more than five years tenure,