| Date: |
19-09-2018
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| Notification No: |
A.P. (DIR Series) Circular No.9
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| Issuing Authority: |
RBI
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| Type: |
A.P.D.(Series) Circulars
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| File No: |
RBI/2018-19/48 |
| Subject: |
External Commercial Borrowings (ECB) Policy - Liberalisation
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RBI/2018-19/48
A.P. (DIR Series) Circular No.9
September 19, 2018
To
All Category-I Authorised Dealer Banks
Madam / Sir
External Commercial Borrowings (ECB) Policy - Liberalisation
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to paragraphs 2.4.1 and 3.3.3 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.
2. It has been decided, in consultation with the Government of India, to liberalise some aspects of the ECB policy including policy on Rupee
denominated bonds as indicated below:
(i) ECBs by companies in manufacturing sector: As per the extant norms, ECB up to USD 50 million or its equivalent can be raised by eligible
borrowers with minimum average maturity period of 3 years. It has been decided to allow eligible ECB borrowers who are into manufacturing sector
to raise ECB up to USD 50 million or its equivalent with minimum average maturity period of 1 year.
(ii) Underwriting and market making by Indian banks for Rupee denominated bonds (RDB) issued overseas: Presently, Indian banks, subject to
applicable prudential norms, can act as arranger and underwriter for RDBs issued overseas and in case of underwriting an issue, their holding
cannot be more than 5 per cent of the issue size after 6 months of issue. It has now been decided to permit Indian banks to participate as
arrangers/underwriters/market makers/traders in RDBs issued overseas subject to applicable prudential norms.
3. All other provisions of the ECB policy shall remain unchanged. AD Category - I banks should 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 above 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
Ajay Kumar Misra
Chief General Manager-in- Charge
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