The Reserve Bank of India liberalised external commercial borrowings norms by increasing the choice of security that companies can provide while taking forex loans.
Companies can provide immovable and movable assets, financial securities and personal guarantee to overseas banks while borrowing ECBs, the RBI said in a notice on Thursday. The banks will have to make sure that the overseas loan meets all the current norms that govern ECBs, the central bank added.
“The bank may permit creation of charge on immovable assets, movable assets, financial securities and issue of corporate and/or personal guarantees, during the currency of the ECB with security co-terminating with underlying ECB,” the RBI said.
“The permission should not be construed as a permission to acquire immovable asset (property) in India, by the overseas lender/security trustee,” the RBI added.