ANNOUNCEMENT 26 Jun 2013In June 2013, the government of India announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
On 26 June 2013, the Reserve Bank of India allowed the use of External Commercial Borrowings (ECB) to cover import of services, technical know-how and license fees when they form a part of the import of capital goods by companies. Earlier, only the cost of the capital goods was an eligible end use of ECBs.
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.