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June 2014

A. P. (DIR Series) Circular No. 129 dated 9th May, 2014

By Gaurang Gandhi Chartered Accountant
Reading Time 1 mins
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External Commercial Borrowings (ECB) Policy – Refinance/Repayment of Rupee loans raised from domestic banking system

Presently, subject to certain terms & conditions, Indian companies are permitted to refinance/repay the Rupee loans, raised by them from the domestic banking system, by raising ECB from recognised lenders, subject to conditions.

This circular prohibits with immediate effect eligible Indian companies to raise ECB from overseas branches/ subsidiaries of Indian banks for the purpose of refinance/ repayment of the Rupee loans raised from the domestic banking system in respect of the following:

a. Scheme of take-out financing.
b. Repayment of existing Rupee loans for companies in infrastructure sector.
c. Spectrum allocation.
d. Repayment of Rupee loans.

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