FinMin eases ECB norms for MSMEs, realty
Although the high-level committee on ECBs, which met on Wednesday, chose to keep the overall window for ECBs at the current $40 billion, it allowed cash-starved sectors of urban housing and micro, small and medium enterprises (MSME) to access such funds and also eased the refinancing norms for infrastructure and manufacturing firms.
Going ahead with the Budget announcement, the finance ministry has also finally permitted ECBs for low-cost housing projects. “It has been further decided that entities like National Housing Bank and housing finance companies (HFCs) will be included as eligible borrowers for financing such low-cost housing projects,” an official release said.
ECBs are considered attractive as cost of raising the loan is lower than that of domestic borrowings. Besides, they provide an additional avenue to access large amounts of funds from global financial markets.
Eligible non-resident entities as well as foreign institutional investors (FIIs) have also been permitted to invest in rupee bonds of Indian firms.
Though the cap for FII investment has been retained at the current $5 billion, the minimum maturity period of such bonds has been brought down to three years from seven years. FIIs will be permitted to invest in these bonds up to the equivalent of $5 billion within the overall corporate bond limit of $45 billion.
Key among the decisions was to permit the Small Industries Development Bank of India (Sidbi)
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