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March 2012

A.P. (DIR Series) Circular No. 70, dated 25- 1-2012 — External Commercial Borrowings (ECB) Policy — Infrastructure Finance Companies (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) by RBI are permitted to avail of ECB, including the outstanding ECB, up to 50% of their owned funds under the Automatic Route. ECB by IFC above 50% of their owned funds are considered by RBI under the Approval Route.

This Circular requires banks to certify the leverage ratio (i.e., outside liabilities/owned funds) of IFC desirous of availing ECB under the Approval Route at the time of forwarding the proposal to RBI.

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