Date: |
04-01-2018
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Notification No: |
A.P. (DIR Series) Circular No. 15
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Issuing Authority: |
RBI
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Type: |
A.P.D.(Series) Circulars
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File No: |
RBI/2017-18/116 A.P. (DIR Series) Circular No. 15 |
Subject: |
Refinancing of External Commercial Borrowings
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RBI/2017-18/116 A.P. (DIR Series) Circular No. 15.
January 4th, 2018
To
All Category-I Authorised Dealer Banks
Madam / Sir,
Refinancing of External Commercial Borrowings
Attention of Authorized Dealer Category - I (AD Category - I) banks is
invited to paragraph 2 of the Statement on Developmental and Regulatory Policies
issued along with the Fifth Bi-monthly Monetary Policy Statement for 2017-18. In
terms of the extant provisions in paragraphs 2.15 and 2.16 (xiii) of Master
Direction No.5 dated January 1, 2016 on “External Commercial Borrowings, Trade
Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers and
Persons other than Authorised Dealers”, as amended from time to time, Indian
corporates are permitted to refinance their existing External Commercial
Borrowings (ECBs) at a lower all-in-cost. The overseas branches/subsidiaries of
Indian banks are however, not permitted to extend such refinance.
2. In
order to provide a level playing field, it has been decided, in consultation
with the Government of India, to permit the overseas branches/subsidiaries of
Indian banks to refinance ECBs of highly rated (AAA) corporates as well as
Navratna and Maharatna PSUs, provided the outstanding maturity of the original
borrowing is not reduced and all-in-cost of fresh ECB is lower than the existing
ECB. Partial refinance of existing ECBs will also be permitted subject to same
conditions.
3. All other aspects of the ECB policy remain unchanged. AD
Category - I banks may bring the contents of this circular to the notice of
their constituents and customers.
4. The aforesaid Master Direction No. 5
dated January 01, 2016 is being updated to reflect the changes.
5. The
directions contained in this circular have been issued under section 10(4) and
11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully Shekhar Bhatnagar Chief General Manager-in-Charge
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