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RBI allows ECB lenders to extend loans in rupees

Relaxing norms for external borrowings, the RBI on Wednesday allowed external commercial borrowings (ECB) lenders can now extend loans in Indian rupees to domestic businesses.

‘With a view to providing greater flexibility for structuring of external commercial borrowings arrangements, it has been decided that recognised non-resident ECB lenders may extend loans in Indian rupees,’ the RBI said in a notification.

The RBI further said for lending in rupees, the lender would have to follow certain conditions, including currency swaps with authorised banks.

‘The ECB contract should comply with all other conditions applicable to the automatic and approval routes as the case may be,’ it added.
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