RBI/2010-11/167
A.P. (DIR Series) Circular No.08
August 12, 2010
To
All Category - I Authorised Dealer Banks
Madam / Sir,
External Commercial Borrowings (ECB) Policy –
Liberalisation
Attention of Authorised Dealer Category - I (AD Category - I) banks is
invited to para 2 (iv) of the
A.P. (DIR Series) Circular No. 46 dated January
02, 2009 relating to External Commercial Borrowings (ECB) Policy.
- At present, entities in the services sectors viz., Hotels, Hospitals
and Software are allowed to avail of ECB up to USD 100 million per financial
year under the Automatic Route, for foreign currency and/or Rupee capital
expenditure for permissible end-uses. On a review, it has now been decided
to consider applications from the corporates in the Hotel, Hospital and
Software sectors to avail of ECB beyond USD 100 million under the Approval
Route, for foreign currency and / or Rupee capital expenditure for
permissible end-uses. The proceeds of the ECB should not be used for
acquisition of land.
- The modifications to the ECB guidelines will come into force with
immediate effect. All other norms of the extant ECB policy relating to
eligible borrower, recognized lender, end-use, all-in-cost ceiling, average
maturity period, prepayment, refinancing of existing ECB and reporting
arrangements would continue to apply in the case of ECBs availed of by the
aforesaid sectors under the Automatic Route as indicated above.
- AD Category - I banks may bring the contents of this circular to the
notice of their constituents and customers concerned.
- The directions contained in this circular have been issued under sections
10(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999)
and is without prejudice to permissions/approvals, if any, required under
any other law.
Yours faithfully,
(Salim Gangadharan)
Chief General Manager-in-Charge