Kolkata, March 30 (IANS) Considering the critical need for long-term funding of infrastructure sector in the country, the Reserve Bank of India (RBI) has revised the overseas borrowings or external commercial borrowings (ECBs) framework to allow infrastructure firms to borrow for up to five years.
“Companies in the infrastructure sector, non-banking financial companies -infrastructure finance companies, NBFCs-asset finance companies, holding companies and core investment companies (CICs) will also be eligible to raise ECBs under Track I of the framework with a minimum average maturity period of five years, subject to 100 percent hedging,” the RBI said in a statement on Wednesday.
Under the revised framework, exploration, mining and refinery activities would also be treated as infrastructure for ECB purposes.
Holding companies and CICs are allowed to use ECB proceeds only for on-lending to infrastructure special purpose vehicles.
The minimum average maturity of foreign currency convertible bonds/foreign currency exchangeable bonds is five years, irrespective of the amount of borrowing.
The RBI said the ECB framework is not applicable in respect of the investments in non-convertible debentures in India by registered foreign portfolio investors.