External Commercial Borrowings (ECB) Policy – Structured Obligations for infrastructure sector

External Commercial Borrowings policy now allows foreign equity holders to provide credit enhancement under the automatic route.

Direct foreign equity holders with at least 25% holding and indirect foreign equity holders holding at least 51% of paid-up capital may provide credit enhancement to Indian infrastructure companies and Infrastructure Finance Companies under the External Commercial Borrowings framework; such credit enhancement by eligible non-resident entities is permitted on the automatic route with no prior Reserve Bank approval, while all other terms and conditions of the earlier circular remain unchanged and the amendment is effective immediately.