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February 2013

External Commercial Borrowings (ECB) Policy – Non-Banking Financial Company – Infrastructure Finance Companies (NBFC-IFCs)

By Gaurang Gandhi, Chartered Accountant
Reading Time 1 mins
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Presently, Non-Banking Finance Companies (NBFC) categorised as Infrastructure Finance Companies (IFC) can avail of ECB, including the outstanding ECB, up to 50% of their owned funds under the Automatic Route. ECB above 50% of their net owned funds can be availed of under the Approval Route. This circular has: – a. Raised this limit of 50% under to 75% and hence, permits IFC to avail of ECB, including the outstanding ECB, up to 75% of their owned funds under the Automatic Route. ECB above 75% of their net owned funds can be availed of under the Approval Route. b. Reduced the hedging requirement for IFC for currency risk from 100% of their exposure to 75% of their exposure.

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