ANNOUNCED AS TEMPORARYNo
Controls on credit operations
On 3 September 2014, the Reserve Bank of India allowed domestic borrowers to raise External Commercial Borrowing (ECB) in Indian Rupees from recognized non-resident lenders provided that the lender has mobilised the Rupees through swaps undertaken with authorized Indian banks. Furthermore, the RBI requires that the cost of such loans are in line with market conditions and that all other provisions for ECB borrowings have been complied with.
Prior to the change, ECB borrowing was allowed in foreign currency from non-resident lenders and in Indian Rupees from non-residents who were equity holders only.
Through ECBs, Indian companies and Public Sector Undertakings can access funds from abroad. According to the Reserve Bank of India, ECBs refer to commercial loans in the form of bank loans, securitised instruments, buyers' credit and suppliers' credit availed of from non-resident lenders with a minimum average maturity of 3 years.
This measure contains liberalizing elements with discriminatory strings attached (such as requiring the use of authorized Indian banks.) As such it is deemed amber in this database.
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