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June 2012

A.P. (DIR Series) Circular No. 111, dated 20-4-2012 — External Commercial Borrowings (ECB) Policy — Liberalisation and Rationalisation.

By Gaurang Gandhi, Chartered Accountant
Reading Time 1 mins
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This Circular has modified the ECB guidelines with immediate effect as under:

(i) Enhancement of refinancing limit for power sector

 Indian companies in the power sector can now, under the Approval Route, utilise up to 40% of the fresh ECB raised by them towards refinancing of the Rupee loans availed by them from domestic banks/institutions. The balance amount raised b way of fresh ECB must be utilised for fresh capital expenditure for infrastructure projects.

 (ii) ECB for maintenance and operation of toll systems for roads and highways

ECB can be raised, under the automatic route, for capital expenditure in respect of the maintenance and operations of toll systems for roads and highways provided they form part of the original project.

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