RBI/2011-12/478
A. P. (DIR Series) Circular No. 99
March 30, 2012
To
All Category-I Authorised Dealer Banks
Madam / Sir,
External Commercial Borrowings (ECB) Policy – Review
of all-in-cost ceiling
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to
A.P. (DIR Series) Circular No. 51 dated November 23, 2011
relating to External Commercial Borrowings.
2. Considering the developments in the global financial markets and the fact
that borrowers were experiencing difficulties in raising ECBs within the
existing all-in-cost ceiling, the all-in-cost ceiling for ECBs with average
maturity of three and up to five years was enhanced to 6 months Libor + 350 bps
with effect from November 23, 2011 and was subject to review on March 31, 2012.
On a review, it has been decided to continue with the enhanced all-in-cost
ceiling for a further period of six months in respect of ECBs as under:
|
Average Maturity Period
|
All-in-cost over 6 month LIBOR*
|
|
Three years and up to five years
|
350 bps
|
|
More than five years
|
500 bps
|
|
* for the respective currency of borrowing or applicable benchmark
|
3. The all-in-cost ceiling is applicable up to September 30, 2012 and subject
to review thereafter. All other aspects of ECB policy remain unchanged.
4. AD Category - I banks may bring the contents of this circular to the
notice of their constituents and customers.
5. 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
are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully,
(Dr. Sujatha Elizabeth Prasad)
Chief General Manager