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November 2011

A.P. (DIR Series) Circular No. 26, dated 23-9-2011 — External Commercial Borrowings (ECB) — Bridge Finance for Infrastructure Sector.

By Gaurang Gandhi
Chartered Accountant
Reading Time 1 mins
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This Circular permits, under the Approval Route, Indian companies which are in the infrastructure sector, to import capital goods by availing of shortterm credit (including buyers’/suppliers’ credit) in the nature of ‘bridge finance’, subject to the following conditions:

(i) The bridge finance must be replaced with a long-term ECB;

(ii) The long-term ECB must comply with all the extant ECB norms; and

(iii) Prior approval must be obtained from RBI for replacing the bridge finance with a long-term ECB.

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