External Commercial Borrowings (ECB) Policy - Infrastructure Finance Companies
NON Banking Finance Companies (NBFCs) categorized as Infrastructure Finance Companies (IFCs) by the Reserve Bank and complying with the prescribed norms are permitted to avail of ECBs, including the outstanding ECBs, up to 50 per cent of their owned funds under the automatic route. ECBs by IFCs above 50 per cent of their owned funds are being considered under the approval route. The permitted end-use should be for on-lending to the infrastructure sector, as defined under the extant ECB policy. IFCs should also hedge their currency risk in full.
RBI has now decided that the designated AD Category – I banks should certify the leverage ratio (i.e. outside liabilities/owned funds) of IFCs desirous of availing ECBs under the approval route while forwarding such proposals to the Reserve Bank of India.
RBI A.P. (DIR Series) Circular No. 70 Dated: January 25, 2012