RBI/2008-09/210
A.P. (DIR Series) Circular No. 20
October 08, 2008
To
All Category - I Authorised Dealer Banks
Madam / Sir,
External Commercial Borrowings Policy - Liberalisation
Attention of Authorised Dealer Category - I (AD Category - I) banks is invited
to the
A. P. (DIR Series) Circular No.5 dated August 1, 2005,
A. P. (DIR Series)
Circular No. 4 dated August 7, 2007,
A. P. (DIR Series) Circular No. 43 dated
May 29, 2008 and
A.P. (DIR Series) No. 16 dated September 22, 2008 relating to
External Commercial Borrowings (ECB).
- As per the extant ECB policy, Infrastructure sector is defined as (i) power,
(ii) telecommunication, (iii) railways, (iv) road including bridges, (v) sea
port and airport (vi) industrial parks and (vii) urban infrastructure (water
supply, sanitation and sewage projects).
- On a review of the ECB policy and to promote the development of the mining,
exploration and refinery sectors in the country, it has been decided to expand
the definition of Infrastructure sector for the purpose of availing of ECB.
Accordingly, the Infrastructure sector would henceforth be defined as (i) power,
(ii) telecommunication, (iii) railways, (iv) road including bridges, (v) sea
port and airport (vi) industrial parks (vii) urban infrastructure (water supply,
sanitation and sewage projects) and (viii) mining, exploration and refining.
- The expanded definition of Infrastructure sector for the purpose of ECB shall
come into force with immediate effect. All other aspects of the ECB policy such
as USD 500 million limit per borrower, per financial year under the Automatic
Route, eligible borrower, recognised lender, end-use of foreign currency
expenditure for import of capital goods and overseas investments, average
maturity period, prepayment, refinancing of existing ECB and reporting
arrangements shall remain unchanged.
- Necessary amendments to the Foreign Exchange Management (Borrowing or Lending
in Foreign Exchange) Regulations, 2000 dated May 3, 2000 are being notified
separately.
- 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