The Reserve Bank of India has relaxed rules for rescheduling/restructuring of ECBs by permitting an increase in the total cost of borrowing offshore. In suppression of earlier provisions, this year the banking regulator has delegated powers to the designated AD category-I banks to allow changes/modification in the draw-down and repayment schedules notwithstanding the average maturity period or changes (decrease/increase) in the all in cost of such overseas borrowings.
The AD category-I banks have the discretionary powers to deal with cases related to changes/modification, reduction in the amount of ECB, the increase in all-in-cost of ECB without restriction on the number of occasions. However they have to ensure that the following stipulations are complied with.
The above measures will be applicable for ECBs raised both under the automatic and approval routes. FCCBs (Foreign Currency Convertible Bonds) will, however, not be covered within these provisions.
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