External Commercial Borrowings (ECB) Policy - Non-Banking Financial Company - Infrastructure Finance Companies (NBFC-IFCs)
NON-Banking Finance Companies (NBFCs) categorized as Infrastructure Finance Companies (IFCs) by the Reserve Bank and complying with the norms prescribed 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 ECB policy. IFCs should also hedge their currency risk in full.
On a review, it has been decided to enhance the ECB limit for NBFC-IFCs under the automatic route from 50% of their owned funds to 75% of their owned funds, including the outstanding ECBs. NBFC-IFCs desirous of availing ECBs beyond 75% of their owned funds would require the approval of the Reserve Bank and will, therefore, be considered under the approval route.
It has also been decided to reduce the hedging requirement for currency risk from 100 per cent of their exposure to 75 per cent of their exposure.
RBI A.P. (DIR Series) Circular No. 69 Dated: January 07, 2013