Rationalise new norms for external borrowing: NSEFI

National Solar Energy Federation of India (NSEFI), a non-profit organisation, has written to the Prime Minister’s Office requesting to direct the Reserve Bank of India (RBI) to rationalise the new ECB framework suitably, excluding repayment of rupee loans from the negative list.NSEFI apprises you that till date, RBI allowed the external borrowing in the form of security bond/loan in U.S. dollars to replace the Indian rupee loans having tenure of 10 years or more given by domestic banks/financing institutions. As per this notification, erstwhile tracks I and II are merged as ‘foreign currency denominated ECB’ and track III and rupee denominated bonds framework are combined as ‘rupee denominated ECB’ to replace the current four-tiered structure.“However, the existing permissible end use of repayment /refinancing of rupee loan availed under track-II of ECB has not been considered in the merged foreign currency ECB framework in any form,” NSEFI chairman Pranav Mehta wrote in the letter, adding that therefore, the repayment of rupee loan to domestic lenders by solar/wind project developers from ECB proceeds would not be possible.

Source : https://www.thehindu.com/todays-paper/tp-business/rationalise-new-norms-for-external-borrowing-nsefi/article26046016.ece

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