The RBI has decided to relax norms for end-use of funds raised via the external commercial borrowing (ECB) route by companies and non-banking finance companies, following feedback from various stakeholders. The central bank said the relaxation was for working capital requirements, general corporate purposes and repayment of rupee loans. Eligible borrowers will now be allowed to raise ECBs with a minimum average maturity period of 10 years for working capital purposes and general corporate purposes. “Borrowing for on-lending by NBFCs for the above maturity and end-uses is also permitted,” RBI said. RBI has also decided to allow corporate borrowers to raise ECBs for repayment of rupee loans availed domestically for capex in manufacturing and infrastructure, if classified as SMA-2 (special mention account) or NPA, under any one-time settlement (OTS) with lenders.

(The Hindu)