External Commercial Borrowings (ECBs)

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....ited to A.P. (DIR Series) Circulars Nos.10 and 23 dated September 5, 2000 and September 17, 2002 respectively and Press Release F.No.4(35)/2003-ECB dated November 12, 2003 issued by Government of India (Ministry of Finance). 2. Accordingly, we advise the following revisions in the existing ECB Policy for a temporary period, until further review. i. Eligibility of borrowers In terms of paragrap....

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....ss to ECBs, either under Automatic Route, or RBI Route or Government Route. ii. Guarantees No financial intermediary (viz. a bank, DFI or NBFC) will be allowed to provide guarantees in favour of overseas lenders, on behalf of their constituents for ECBs being raised by them. Revisions in all-in-cost ceiling All ECBs shall be subject to the following revised maximum spreads over six months LIBO....

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....wage Projects Existing guidelines on end-use will be applicable for ECBs under the Automatic Route. v. Hedging In cases where ECBs have been raised for meeting rupee expenditure under Automatic Route the Authorised Dealer has to ensure at the time of draw down that the forex exposure of the borrower is hedged unless there is a natural hedge in the form of uncovered foreign exchange receivables.....