PHD Chamber lauds RBI’s Decision for ECB Norms

PHD Chamber welcomes the RBI’s decision to allow NBFCS involved in financing core sector projects to avail of ECB under the approval route, subject to complying with the prudential standards prescribed by RBI.

“Though RBI has  moved towards restricting ECB for businesses beyond specified projects,  this should be extended to some more sectors including projects coming up in Infrastructure sector as investment in this sector is urgently  needed”, added Mr. Satish Bagrodia, President, PHD Chamber.

As of now the RBI has, made a concession in the foreign borrowings policy for telecom companies seeking to fund their acquisition of 3G spectrum and finance companies lending to core sector projects, yet this concession should be allowed for infrastructure companies also.  Further, if the borrower is complying with the prudential guidelines than this facility should be allowed under the automatic route.

“PHD Chamber also welcomes RBI’s decision to extend the facility to developers setting up integrated townships to avail of foreign borrowings or ECBs until December 31, 2010, under the approval route. This borrowing window was earlier scheduled to expire by the end of December `09. The government should also set a time limit of 30 days for giving its decision to companies applying under the approval route. As of now companies applying under the approval route have to wait for a long time to get the required permission which invariably delays the project and adds to the cost”, Mr. Bagrodia further added.

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