Voluntary Pledge of Gold and Silver for Collateral-Free Agriculture and MSME Loans: RBI Clarification
The Reserve Bank of India (RBI) has issued a clarification regarding the treatment of loans extended to borrowers in the Agriculture and Micro, Small, and Medium Enterprises (MSME) sectors, where gold or silver is voluntarily pledged as collateral. Background As per existing norms, banks are required to provide collateral-free loans up to a prescribed limit…
Read article
External Commercial Borrowings (ECB) – Clarifications on hedging
Further to its earlier circulars, Reserve Bank of India has clarified on the provisions of hedging in the ECB framework vide its circular (A.P. (DIR Series) Circular No. 15) dated 07.11.2016. The circular provides clarity on hedging ‘External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency to bring uniformity in hedging practice in…
Read article External Commercial Borrowings (ECB) in Indian Rupees
The recognized overseas ECB lenders who are able to mobilise Indian Rupees may extend Rupee denominated loans to Indian companies. The lenders may enter into back-to-back swap transaction with AD-Category-1 banks to facilitate Rupee denominated lending. The recognized non-resident lender (financier from abroad) approaches his overseas bank with a request for a swap rate for…
Read article Understanding meaning of External Commercial Borrowing (ECB)
In simple terms, External Commercial Borrowings (ECB) means commercial borrowings availed (in the form of bank loans, trade credits, and securitized instruments) from external sources (from abroad) with a minimum average maturity of three years. The borrowings under ECB take place in two channels namely automatic route and approved routes. Eligible borrowers like Corporate Importers,…
Read article
Case Studies on Export Finance: Enabling Growth and Global Competitiveness for Indian Businesses
Export finance plays a pivotal role in enabling businesses—particularly small and medium enterprises (SMEs)—to participate effectively in global trade. It encompasses various financial instruments designed to support exporters in managing working capital, mitigating risks, and maintaining liquidity throughout the export cycle. The following case studies illustrate how Indian companies from different sectors leveraged export finance…
Import Data Processing and Monitoring System (IDPMS): Enhancing Oversight in India’s Import Transactions
The Import Data Processing and Monitoring System (IDPMS) is a centralized online platform developed by the Reserve Bank of India (RBI) to facilitate effective tracking, monitoring, and regulation of import transactions. Introduced to strengthen transparency and foreign exchange compliance, IDPMS plays a pivotal role in aligning import payments with the actual receipt of goods in…
Read article