RBI limits outstanding ECBs to 6.5% of GDP

Mumbai: The Reserve Bank of India (RBI) Thursday announced a cap on the outstanding stock of external commercial borrowings (ECB) at 6.5 per cent of GDP at current market prices.

Based on the gross domestic product (GDP) figures at March-end 2018, the soft limit works out to $160 billion for the current financial year, the RBI said in a statement.

"The outstanding stock of ECB as on September 30, 2018, stood at $126.29 billion," it said.

The decision to have a "rule-based dynamic limit" for outstanding stock of ECB at 6.5 per cent of GDP at current market prices has been taken in consultation with the government, the RBI added.

ECBs refer to commercial loans in the form of bank loans, securitised instruments (floating rate notes and fixed rate bonds, non-convertible, optionally convertible or partially convertible preference shares), buyers' credit, suppliers' credit availed of from non-resident lenders with a minimum average maturity of 3 years.

Meanwhile, RBI Governor Shaktikanta Das Thursday said he will meet representatives of private sector banks and cooperative banks next week to discuss issues and concerns.

Das took over as 25th Governor of RBI last week following the abrupt exit of Urjit Patel ahead of schedule due to differences with the government.