The Reserve Bank of India has revised its average maturity guidelines for external commercial borrowing (ECB) in the real estate, industrial and infrastructure sectors under the automatic route, after raising the ECB limit for eligible borrowers in these sectors from US$500 million to US$750 million in September.
Eligible borrowers can now obtain ECBs of up to US$20 million in a financial year with a minimum average maturity of three years, and ECBs between US$20 million and US$750 million with a minimum average maturity of five years.
As a result, the requirements contained in a 2006 notification relating to the average maturity period, prepayment and call and put options of ECBs of up to 10 years have been dispensed with.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
